Caribbean and Americas-focused oil and gas company Challenger Energy has announced the formal signing of its AREA OFF-3 licence, located around 100km off the coast of Uruguay.
Challenger was awarded the licence in June last year, under the Open Uruguay Round process, after receiving final regulatory approvals.
Under the terms of the licence agreement, Challenger will operate the AREA OFF-3 licence for an initial exploration period of four years, starting from 7 June 2024 until 6 June 2028.
The AREA OFF-3 licence is spread over an area of 13,252km2 and is located in relatively shallow water depths, ranging between 20m and 1,000m.
The licence area is backed by substantial existing 2D and 3D seismic coverage, with two previously identified material prospects.
Currently, the prospects are anticipated to host an estimated gross resource potential of up to around two billion barrels of oil and gas of up to approximately nine trillion cubic feet.
Challenger CEO Eytan Uliel said: “Following on from our recently announced farm-out of the AREA OFF-1 licence to Chevron, we are very pleased to announce that the AREA OFF-3 licence has now been formally signed, cementing Challenger Energy`s position as a significant industry participant in Uruguay`s offshore.
“AREA OFF-3 represents a successful expansion of the Company`s business in Uruguay, a country that has fast become one of the world`s frontier exploration hotspots. We believe that AREA OFF-3 has strong technical merit and offers an exciting value-creation opportunity.
“Therefore, like with AREA OFF-1, our immediate strategy for AREA OFF-3 is to commence accelerated technical work, in support of seeking an early farm-out. We look forward to keeping shareholders informed of our progress.”
Under the licence agreement, Challenger will have relatively modest minimum work obligations on the licence area, during the initial exploration period.
The obligations include licencing and reprocessing of 1,000km of legacy 2D seismic data and undertaking two geotechnical studies.
The company intends to apply the same strategy it has adopted for the AREA OFF-1 licence, where the licence area was farmed out to Chevron, earlier this month.
Challenger aims to advance its technical work programme including additional work related to existing prospects, identifying new prospects, and introducing a strategic partner at an early stage.
