Challenger Energy Group PLC (AIM:CEG, OTC:BSHPF) CEO Eytan Uliel joins Proactive's Stephen Gunnion with news that the company has formalised a second offshore licence agreement in Uruguay, following a farm-out deal with Chevron for its first licence —AREA OFF-1 — signalling rapid advancements in the region.
Uliel said the latest development is a part of the junior explorer's plan and execution over the last 12-18 months, showcasing its strategic growth and commitment to its objectives in Uruguay.
The deal with Chevron for OFF-1 involves Challenger Energy retaining a 40% interest in the licence, with Chevron taking a 60% stake and assuming operatorship. This partnership is significant as it represents a new country entry for Chevron and endorses the technical and prospective value of the block as identified by Challenger Energy.
Financially, the agreement includes an upfront payment of $12.5 million to Challenger Energy and provisions for Chevron to cover the costs of an accelerated 3D seismic campaign and partially fund exploration drilling, if it proceeds.
Challenger Energy views Uruguay as a frontier exploration hotspot, paralleled by the recent significant oil and gas discoveries off the coast of Namibia. The geological similarities between Uruguay and Namibia have spurred industry interest, transforming Uruguay into a sought-after location for offshore exploration. This interest is evidenced by the licensing of all other offshore blocks in Uruguay to major industry players such as Shell, Apache, and YPF.
Looking ahead, Challenger Energy aims to replicate the successful farm-out strategy employed with Chevron for its second offshore licence, AREA OFF-3. The company plans to accelerate technical assessments and engage potential partners, leveraging existing seismic data to attract interest and investment in its projects. The ambition is to see initial exploration drilling in the coming two to three years, further advancing Uruguay's offshore potential.
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