Challenger Energy Group PLC (AIM:CEG, OTC:BSHPF) told investors it will now receive a £1.5 million loan from Charlestown Energy Partners as part of a previously announced investment agreement.
It comes as the company enters into the long-form legal documentation, executing the previously announced investment deal - and once Challenger’s farm-out deal with Chevron closes, the Charlestown loan will convert into equity, giving the investor an 8.7% holding in the company.
The company is expected to receive the loan funds on or around 22 May.
Charlestown’s investment ensures that Challenger is able to start technical work on AREA OFF-3, in Uruguay at the earliest opportunity ahead of the farm-out closing.
Closing the Chevron deal will see Challenger receive $12.5 million of cash and will result in Challenger being fully funded for the foreseeable future.
Today, Challenger noted that the regulatory approval process for the farm-out of a 60% interest in the AREA OFF-1 licence, offshore Uruguay to Chevron, is progressing in accordance with expectations.