Challenger Energy (CEG) , a Caribbean and Americas-focused oil and gas producer, announced that the transaction for the sale of its Cory Moruga licence, onshore Trinidad, to Predator Oil & Gas was completed on November 6 2023.
Following negotiations with the Trinidadian Ministry of Energy and Energy Industries (MEEI), Challenger and Predator agreed to alter certain terms of the previously announced deal:
1) Upon completion of the deal, Predator paid Challenger US$1m in cash. A further US$1m that was due to be paid 6 months from completion will now be paid immediately direct to MEEI, in part agreed settlement of past dues on the Cory Moruga licence.
2) A contingent US$1m payable by Predator to Challenger in the event of the Cory Moruga field achieving certain production benchmarks and Predator granting Challenger a future back-in right to a 25% interest in the Cory Moruga field, will no longer apply.
Furthermore, in addition to the cash consideration received, completion of the transaction will extinguish various liability in the Challenger accounts related to the Cory Moruga licence, amounting to approximately US$4.5m.
Additionally, Challenger said that all historical differences and disputes it had with Predator in relation to the Inniss-Trinity pilot CO2 EOR project have been "fully and amicably resolved".
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Challenger has confirmed the sale of its 83%-owned Cory Moruga license, onshore Trinidad, to Predator as initially announced on December 20 2022. While negotiations with Trinidadian authorities resulted in some alterations, the effect of the deal on Challenger's accounts and portfolio remain broadly unchanged and in line with its strategy to shed non-core and non-producing assets.
Cory Moruga is a direct license from MEEI, in which Challenger's wholly-owned T-Rex Resources holds an 83.8% operating interest, alongside its partner Touchstone Exploration, which has a non-operating 16.2% interest. The Cory Moruga license includes the Snowcap oil discovery where oil was previously produced on test from the Snowcap-1 and Snowcap-2ST wells. On the basis of these production tests, a development plan was submitted in 2018, prior to Challenger taking control of the asset. However, the block has not been further developed since that time.
The agreement stipulated for up to a US$9m aggregate value proposition for Challenger, including US$2m in staged cash consideration, removal of all liabilities and potential exposures associated with Cory Moruga, and a full settlement with Predator of all matters relating to the Inniss-Trinity CO2 EOR pilot project. These core terms remained unchanged.
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