Challenger Energy Group PLC (AIM:CEG, OTC:BSHPF), the exploration group focused on the Atlantic margin, said a £1.5 million strategic investment from Charlestown Energy Partners allows the company to kick off technical work on licence AREA OFF-3 offshore Uruguay at the 'earliest opportunity'.
This investment, initially structured as a loan, includes terms to convert into shares at a fixed price of 0.168 pence per share on the successful closure of the AREA OFF-1 farm-out agreement with Chevron.
This conversion rate represents a roughly 20% premium over the current share price, potentially resulting in Charlestown holding approximately 8.7% of Challenger's shares, making it one of the largest shareholders.
Charlestown, a New York-based specialist in energy investments, has a history of cornerstone investments in listed exploration firms, including a recent lead investment in a Namibian-focused energy company.
As part of the agreement, Charlestown managing member Robert Bose will join the Challenger board.
The company anticipates the completion of the farm-out to Chevron will bring in $12.5 million in cash proceeds, positioning it to be fully funded for future operations without the need for additional capital.