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Challenger Energy shares jump on Uruguay update

13:57, 26th April 2023
Victor Parker
Vox Newswire
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Challenger Energy (CEG Follow | CEG), a Caribbean and Americas-focused oil and gas producer, updated markets on its AREA OFF-1 block in offshore Uruguay.

Challenger said an initial prospect inventory of 1 to 2 billion barrels had been defined from its 2D seismic work. Three sizeable prospects have so far been identified, derived from a range of play types consistent with those discovered by recent drilling in Namibia by TotalEnergies and Shell.

Challenger said the seismically derived prospects had been further supported and derisked by Amplitude Variation with Offset (AVO) analysis.

Challenger said prior conjugate margin success, recent licensing rounds in Uruguay, and technical uplift from the company's 2023 work programme, will drive a soon-to-be-initiated farmout process.

Eytan Uliel, CEO of Challenger Energy, commented: "In 2020, when no other parties were ready to commit, Challenger Energy was first-mover into offshore Uruguay, securing the AREA OFF-1 block on an uncontested basis and on highly advantageous work terms. Since then, margin-opening discoveries offshore Namibia by TotalEnergies and Shell have made it possible to correlate what are now proven, oil producing source rocks directly across into the conjugate margin basins of Uruguay's waters."

 

View from Vox

Great news from Challenger as it announced a prospective 1 to 2 billion barrels from its wholly-owned offshore Uruguayan block AREA OFF-1. The block has already been largely derisked by recent successful conjugate margin drilling in Namibia by TotalEnergies and Shell. Furthermore, prospects and play robustness have been corroborated by Challenger's own AVO analysis, geochemical sampling, and satellite seep analysis.

CEG shares climbed as high as 28% on the news, consolidating down to 10% as of time of writing.

Stock Chart | CEG

Challenger's seismic work and mapping have so far confirmed the abovementioned considerable value uplift for AREA OFF-1, with 3 high-potential prospects identified from 2 material play types. Challenger's accelerated geotechnical assessment programme is on track to be completed by Q3 2023 and will satisfy the entire minimum work obligation for the block's initial 4-year exploration period to August 2026.

Uruguay has become a new exploration hotspot with all but one available offshore blocks licenced by major oil companies and NOCs bidding sizeable work programmes. Challenger's early entry into the market is beginning to pay off as the company targets a lucrative farm-out to an industry partner this year, with its IP and extensive technical dataset positioning it well.

Follow News & Updates from Challenger Energy: Follow | CEG

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