Challenger Energy, (CEG) a Caribbean and Americas-focused oil and gas producer, announces that ANCAP, the regulatory authority in Uruguay, has officially approved the award of the offshore Uruguay AREA OFF-3 licence to the company.
The development comes after Challenger Energy's announcement on 5th June 2023, where it informed investors about the submission of its bid and anticipated a formal approval timeline of 3-4 weeks.
Before commencing the initial 4-year exploration period of the licence, the company needs to secure all remaining approvals, finalise documentation, and complete the licence agreement's formal signing, estimated to take approximately 3-4 months.
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The news today marks the second licence awarded to Challenger in the region, following its Uruguay licence signing for AREA OFF-1 in May 2022. The AREA OFF-3 licence is 13,252 km2, and will increase Challenger's total Uruguay acreage holdings to 28,000 km2, making CEG the second largest offshore acreage holder in Uruguay behind Shell.
AREA OFF-3 is located in relatively shallow water, with existing 2D and 3D seismic coverage. The block has a current estimated resource potential of up to 500 million barrels of oil equivalent and up to 9 trillion cubic feet gas, from multiple exploration plays.
In addition, the award of the AREA OFF-3 licence to Challenger represents a successful expansion of the company's high quality, frontier play opportunity in Uruguay - a fast emerging global exploration 'hotspot' - and is consistent with a strategy of targeting high-impact Atlantic margin opportunities.
During the 4-year exploration period, Challenger will focus on re-evaluating the existing 2D and 3D seismic data on the block, inspired by the success of recent discoveries in the conjugate margin offshore Southwest Africa. The data from Namibia's activities suggests a similar petroleum system could be present offshore Uruguay, making previously overlooked traps with effective sealing mechanisms potential exploration targets.
Overall, AREA OFF-3 is an attractive exploration opportunity for Challenger Energy, and investors can look forward to future updates on the company's progress as it advances toward unlocking the full potential of its newly acquired exploration assets offshore Uruguay.
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