Challenger Energy Group PLC (AIM:CEG, OTC:BSHPF) has agreed to sell its Trinidad and Tobago operations in a deal worth up to $8 million.
Initially, the asset sale is priced at $6 million, but it can rise to $8 million subject to the performance of the production assets (if output exceeds 750 barrels of oil per day by the end of 2027).
It comprises a $1.75 million cash payment and the transfer of some $4.25 million of liabilities.
The buyer is Caribbean Rex Limited, a joint venture between a subsidiary of Predator Oil & Gas PLC and West Indian Energy Group Limited.
"For some time we have been considering the future for our business in Trinidad and Tobago, ultimately concluding that our capital and efforts can be better deployed,” chief executive Eytan Uliel said in a statement.
“Through this transaction we receive both upfront and deferred consideration, we retain an ability to benefit from future upside performance of the assets sold, we remove various liabilities, provisions and exposures from our balance sheet, and we streamline our activities.
“Most importantly, exiting from Trinidad and Tobago allows full focus on our core assets in Uruguay, where we believe the opportunity to create near-term value for our shareholders is considerably greater, as we execute on our busy work programme in both AREA OFF-1 and AREA OFF-3 in 2025.”
The Trinidad deal is subject to shareholder and regulatory approvals, by 30 April.