Challenger Energy Group PLC (AIM:CEG, OTC:BSHPF) told investors its subsidiary FRAM Exploration Trinidad Ltd will “vigorously defend” any possible legal proceedings by Predator Oil and Gas.
The Trinidad-focussed company issued a stock market statement responding to an announcement made yesterday by Predator, which alleged intention to initiate a litigation process regarding the Inniss-Trinity Well Participation Agreement (WPA) between the companies.
Challenger today said: “FRAM denies that any amount is owing to Predator pursuant to the WPA, and considers the various assertions made by Predator in yesterday's announcement to be devoid of any technical justification or legal basis.
“Accordingly, FRAM will vigorously defend any legal proceedings should they be issued by Predator, and will seek recovery of any costs incurred by FRAM in doing so.”
Predator, in its statement, claimed it sought recompense following what it said was a premature and unilateral termination of an enhanced oil recovery project in August 2021.
Challenger yesterday released a project update telling investors its second half work programme will focus on maximising production from existing well stock, whilst preparing plans for new well drilling in 2023.
It plans to recomplete between ten and fifteen existing wells in order to achieve near-term production growth targets, with the lower-cost and lower-risk programme expected to be sufficient to bring average output up to 550 to 600 barrels of oil per day by the end of the year.
Well recompletion programmes will take place across each of the company’s Goudron, Inniss-Trinity and Bonasse fields, with the schedule anticipating completion by October.
Looking to 2023, the company said it is evaluating up to nine potential new well opportunities across its portfolio and the new well drilling campaign would be expected to significantly uplift production, consistent with Challenger’s longer-term production target of 1,000 bopd.
Challenger said it will evaluate an appropriate funding strategy for new wells, with a view to reducing the capital burden and risk to the company – options will include ‘risk sharing opportunities’ with contractors and partners, it added.