Challenger Energy Group PLC (AIM:CEG, OTC:BSHPF)'s deal with Chevron and its new separate farm-out process in Uruguay should “herald a period of significant news flow”, according to Zeus Capital.
Analyst Daniel Slater says the broker has a positive outlook for the share, with a ‘total risked NAV’ of 27.8p per share.
“Challenger has producing assets onshore Trinidad, with a wider exploration portfolio across Uruguay and The Bahamas,” the analyst said in a note.
“The company’s Uruguay position is the key focus, and this is gaining greater industry prominence on the back of drilling in Namibia and South Africa, and from numerous larger companies taking acreage in the country.”
Slater added: “Challenger will now move ahead with its initial work programme on OFF-3. As on OFF-1, this consists of desktop studies aimed at further working up prospectivity and then running a farm-out process.”
Challenger in late October announced the completion of its farm-out of the OFF-1 block, offshore Uruguay, and as a result, banked $12.5 million.
This week, the company announced it had begun a seismic reprocessing work programme for its OFF-3 block.