Challenger Energy (CEG), a Caribbean and Americas-focused oil and gas producer, released its results for FY22, highlighting significant progress made across the company’s assets in Uraguay, where its farmout process continues to be progressed, and in Trinidad, where Challenger’s asset base is set to be augmented by a new licence.
Cash at the year-end stood at $2.5 million. Challenger's current cash position is now $1.3 million, but is set to grow further after the Cory Moruga asset sale. In addition, Challenger has several high-probability sources of cash inflows expected to come on stream over the next 12 months, including contracted proceeds from the sale of Cory Moruga licence in Trinidad, potential inflows from successful farm-out of the AREA OFF-1 licence in Uruguay and the potential sale of other non-core assets in Challenger’s portfolio.
Last yearm revenues hit US$4.3m from production of 353mbbl/d, and EBITDA came in at a loss of US$6.6m.
In 2022, Challenger rapidly advanced its AREA OFF-1 technical work program in Uruguay, to enhance value when it farms out the asset, and the award of the OFF-3 licence to Challenger grows business in Uraguay even further.
In Trinidad, Challenger is also expecting the award of the Guayaguayare licence. This surrounds the company’s existing producing Goudron licence, and is nearby its producing Inniss-Trinity licence too. While Guayaguayare has new exploration potential, existing wells could provide opportunities too.
Challenger’s Goudron and Inniss-Trinity assets continue to produce, broadly allowing the company to break-even at the Trinidad country level.
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A strong set of results from Challenger, with cash set to grow following the closure of the Cory Moruga asset sale. Focus remains on the Uruguay farm-out process, with a high chance of delivering upside along with the potential for new work programmes from the Guayaguayare licence.
Challenger recognises the continued importance of oil in the energy mix, especially considering the recent events that impacted energy prices and the global industry. As the the world seeks secure energy sources, Challenger is well-positioned to benefit.
In Uruguay, Challenger has benefitted from renewed global focus on energy security and exploration, following the Ukrainian invasion and loss of access to Russian production and reserves in Western energy markets. For the remainder of the year, Challenger is set to perform well, as oil prices are predicted to rise, with some estimates saying demand will eclipse supply by around 2 mb/d.
As further news is expected from the Uruguay farm-out process, make sure to for news and updates.