Challenger Energy Group PLC (AIM:CEG, OTC:BSHPF) has this week seen multiple significant points of progress in Uruguay which altogether boost its farm-out prospects.
Chief executive Eytan Uliel described “important commercial, technical and operational inputs” that support the partnering process which he expects can successfully conclude in the first quarter of 2024.
Challenger, in a statement, said that on 11 December it submitted geotechnical reports for its project area, AREA OFF-1, to the Uruguayan regulator – satisfying the explorer’s minimum work programme obligation for its first exploration period, which began in August 2022 and runs until 2026.
On 12 December, oil and gas majors including Shell and YPF (NYSE:YPF) officially signed documents in Montevideo, sealing offshore licence awards as previously announced. The final remaining offshore licences are due to be signed officially soon.
Challenger noted key observations regarding the signings and the licence awards.
One, it paves the way for seismic acquisition companies to commence permitting and approval processes for potential 3D seismic acquisition programmes in Uruguay. This work potentially could get underway in 2024, the company noted.
It also highlighted, in favour of its farm-out process, that the new licence awards come with "significantly greater" initial minimum work obligations compared to the company’s OFF-1 and OFF-3 blocks.
"This week has been extremely significant for the emerging Uruguayan offshore exploration sector, and highlights how exciting we think the next few years will be.”
“Challenger has now completed AREA OFF-1's minimum work programme, well ahead of schedule.”
He added: “The finalisation of contracts with global industry heavyweights for multiple offshore blocks has defined Uruguay's operator landscape, provided certainty as to their upcoming, substantial exploration programmes, and has also laid out the pathway to a potential 3D seismic shoot in late 2024/early 2025.
“These are all important commercial, technical and operational inputs relevant to our ongoing AREA OFF-1 farm-in process which, given developments this week, we now expect to be able to successfully conclude in the first quarter of 2024."