The Challenger Energy Group PLC (LON: CEG) share price surged 19.6% on an update about Uruguay’s AREA OFF-1 license area. The company revealed that it had completed the volumetric assessment of the project and was ready to sign a farm-out agreement with the leading oil companies.
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The energy group also revealed that it had assessed the estimated recoverable resource (EUR) of about 2.0 billion barrels and over 4.9 billion barrels based on an upside case. The completed assessments were for AREA OFF-1’s three primary prospects (Teru Teru, Anapero, Lenteja).
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The company is currently conducting technical work and has identified additional new leads and prospects that could have more recoverable resources once the evaluation is complete and will add to the overall AREA OFF-1 resource and prospect inventory.
Challenger Energy has also started the formal adviser-led farm-out process and is keen to find a partner to help exploit the license area. The company noted that it had received strong interest from potential partners.
The company also noted that it is continuing with various technical workstreams to complete the prospect mapping, finalise the prospect and lead inventory, and expand the amplitude of variation vs offset (AVO) analysis from the initial six reprocessed 2D seismic lines to 15.
While the work is yet to be completed, the AVO analysis shows solid Class II/ Class III AVO anomalies were identified for the Anapero and Teru Teru prospects and are present on multiple seismic lines, which confirms the actual extent of both prospects.
Eytan Uliel, Challenger Energy’s CEO, 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. To capitalise on this, I can confirm that a farm-out process has now commenced, with very strong initial indications of interest received from multiple major oil companies. Our target is to complete a farm-out transaction by year-end so that we can continue to rapidly progress work on the block and thereby generate value for shareholders.”
*This is not investment advice.
Challenger Energy (CEG) share price.
The Challenger Energy (CEG) share price surged 19.57% to trade at 0.110p, from Tuesday’s closing price of 0.092p.
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