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Challenger confirms initiation of Uruguay farmout process

09:51, 31st May 2023
John Hughman
Vox Newswire

Challenger Energy (CEG)Follow | CEG, an oil and gas explorer focused on the Caribbean and Americas, has provided an update on its activities in the 100%-owned AREA OFF-1 block offshore Uruguay. 

The company has completed a volumetric assessment of the block's three primary prospects, namely Teru Teru, Anapero, and Lenteja. The assessment has estimated a recoverable resource of approximately 2.0 billion barrels (Pmean, unrisked), with a potential upside case of over 4.9 billion barrels (P10, unrisked).

In addition to the primary prospects, ongoing technical work has identified new leads and prospects, which are expected to increase the overall resource and prospect inventory of the AREA OFF-1 block once the evaluation is complete. 

To further advance its activities, Challenger Energy has initiated a formal adviser-led farm-out process and has received strong interest from multiple major oil companies as potential partners.

Eytan Uliel, Chief Executive Officer of Challenger Energy, said: "We continue to be encouraged by the opportunity that our AREA OFF-1 licence in Uruguay represents. Our technical work highlights how AREA OFF-1 is clearly world class acreage with massive resource potential, in what has become a global exploration hotspot.”

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Overall, Challenger Energy's update on the AREA OFF-1 block highlights the significant estimated recoverable resource in the region, which in the words of broker WH Ireland makes it “one of the hottest exploration plays globally”.

As the first mover in the current phase of Uruguayan exploration, and with majors active in the area, the broker believes the company will be easily able to agree a farm-down of its interest this year. Shell, APA (formerly Apache), and YPF have successfully acquired the neighbouring blocks surrounding their acreage in offshore Uruguay, following their pioneering role in the latest wave of exploration. These companies have collectively committed over $230 million towards exploration activities in the area. 

Follow Challenger here to keep up to date with progress as it pursues a farmout agreement.Follow | CEG 

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