Challenger Energy’s farm-out of the AREA OFF-1 licence to Chevron has received approval from Uruguay’s state-owned oil company, Ancap. This move will make Chevron the operator of the block, acquiring a 60% stake, while Challenger, through its subsidiary CEG Uruguay, will hold a 40% non-operating interest. The deal, first announced in March 2024 pending regulatory consent, includes a $12.5 million payment to Challenger Energy upon finalisation.
Challenger Energy’s CEO, Eytan Uliel, shared that securing the regulatory approval was the result of diligent work with regulatory authorities. The next steps include notifying the Uruguayan Ministry of Industry, Energy and Mining, followed by registration with the Ministry of Economy and Finance, involving a 20-day notification period. The completion of these final procedures is expected within the next four to eight weeks, according to Uliel, who expressed confidence that the process will not encounter further delays.
Once the transaction is complete, Chevron plans to proceed with the acquisition of 3D seismic data, aiming for an early 2025 start. The AREA OFF-1 block is located around 100 kilometres offshore Uruguay, covering an area of approximately 14,557 square kilometres. Challenger Energy was awarded the licence in June 2020, with exploration activities officially beginning in August 2022. Challenger fulfilled the initial work requirements by the end of 2023.
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.
