Challenger Energy has successfully completed the transfer of a 60% stake in the offshore AREA OFF-1 block in Uruguay to Chevron’s subsidiary, Chevron Mexico Finance LLC, Sucursal Uruguay. This transaction has been fully approved by Uruguayan regulatory authorities, marking a significant step in the development of Uruguay’s offshore energy resources.
With this transfer, Challenger Energy has received a cash payment totalling $12.5 million. Although Chevron will now assume the role of operator, Challenger will retain a 40% interest in the AREA OFF-1 block. An important aspect of the agreement is Chevron’s commitment to cover Challenger’s share of costs related to a 3D seismic survey, with this coverage extending up to a maximum of $15 million. This seismic campaign is anticipated to commence as early as the first quarter of 2025, setting the stage for further exploration activities in the block.
Beyond the initial survey, the terms of the agreement also specify that if Chevron proceeds with drilling an exploratory well, it will assume 50% of Challenger’s costs for this well up to $20 million. This arrangement further strengthens the collaborative approach between the two companies as they move forward with exploring the resource potential of the AREA OFF-1 block.
This strategic partnership allows Challenger to secure financial support for crucial exploratory operations while Chevron takes on a leading role, potentially accelerating progress in unlocking Uruguay’s offshore energy potential.
Challenger Energy Group plc (LON:CEG) is a Caribbean and Atlantic margin focused oil and gas company, with a range of petroleum assets located onshore in Trinidad and Tobago, and Suriname, and offshore in the waters of The Bahamas and Uruguay.
