Challenger Energy Group PLC (AIM:CEG, OTC:BSHPF) has told investors it expects to be awarded the ‘AREA OFF-3’ licence in Uruguay to expand its footprint in the exploration frontier.
The company, in a statement, said it has bid for the OFF-3 block, spanning some 13,252 square kilometres in shallow waters offshore Uruguay.
"We are delighted to advise that on 2 June 2023, ANCAP [a national regulator] publicly announced the details of Challenger Energy's offer for the AREA OFF-3 licence, which is the precursor step for the formal award of the licence to CEG, and which we understand should occur in the next 3-4 weeks,” Challenger chief executive Eytan Uliel said.
OFF-3 is the last outstanding piece of unassigned exploration acreage offshore Uruguay. It has already been captured in 2D and 3D seismic data and Challenger highlighted that it is host to significant prospective resources across multiple potential hydrocarbon plays.
Estimates to date see some 500 million barrels of oil equivalent in untested oil resources and up to 9 trillion cubic feet of gas targets.
If the award is confirmed, Challenger expects the OFF-3 licence will run for an initial four-year exploration period, with an obligation to complete the reprocessing and reinterpretation of around 1,000 kilometres worth of 2D seismic data, before further extensions to the licence.
“AREA OFF-3 possesses identified prospects of material scale, and our immediate work focus will be a comprehensive technical reassessment of the block, applying modern 2D seismic re-imaging and our subsurface knowledge of the Uruguayan offshore margin, similar to the successful geotechnical de-risking approach we have applied on AREA OFF-1,” Uliel said.
“Strategically, the award of this licence will cement CEG's position as a significant participant in Uruguay, a country that has fast become one of the world's frontier exploration hotspots.”
The Challenger chief added: “We are especially appreciative of the confidence shown in Challenger by the Uruguayan regulatory authority, ANCAP.
“Over the next four years we intend to further grow that confidence by applying our basin expertise and fully evaluating the licence's potential.
“We anticipate that we can create an opportunity of comparable value and industry interest to what we have thus far identified with AREA OFF-1, to the benefit of both Challenger and ANCAP."