Company Announcements

Uruguay Update

Source: RNS
RNS Number : 4042L
Challenger Energy Group PLC
03 January 2023


3 January 2023

Challenger Energy Group PLC

("Challenger Energy" or the "Company")


Uruguay Update

Challenger Energy (AIM: CEG), the Caribbean and Americas focused oil and gas company, with oil production, appraisal, development and exploration assets across the region, notes recent media reports and confirms as follows:


·      On 27 December 2022 ANCAP, Uruguay's national energy company, announced that a further two offshore blocks in Uruguay have been awarded following competitive bids received in the Second 2022 ANCAP Open Bidding Round.

·      The AREA OFF-4 deep-water offshore block, which is immediately adjacent to Challenger's AREA OFF-1 shallow water exploration block, has been awarded to a consortium of Shell and APA Corporation (formerly known as Apache). AREA OFF-4 was the subject of competitive bids received from the winning consortium and from YPF (the Argentinian National Oil Company). ANCAP has reported that the consortium has committed to undertake extensive work on the AREA OFF-4 block in the initial 4-year exploration period, including 3D seismic acquisition.

·      Additionally, the AREA OFF-5 deep-water offshore block has been awarded to YPF. ANCAP has reported that YPF has committed to undertake an extensive technical work program on the AREA OFF-5 block in the initial 4-year exploration period.

·      The award of these two blocks is in addition to the award to Challenger of the AREA OFF-1 block in May 2020, and the awards in May 2022 of the AREA OFF-2 and AREA OFF-7 blocks to Shell, and the AREA OFF-6 block to APA.

·      As a result of the recent awards, all but one of the available offshore exploration blocks in Uruguay have now been licenced, and, with the exception of Challenger Energy, all have been licenced to global oil and gas majors.

·      The aggregate value of work now committed across blocks AREA OFF-2, AREA OFF-4, AREA OFF-5, AREA OFF-6 and AREA OFF-7 by Shell, APA Corporation and YPF during the next 4 years, in respect of both technical and exploration activities including well drilling, is estimated by ANCAP to be in excess of approximately US$230 million.

·      The full text of the announcement by ANCAP is available on ANCAP's website -

·      It is noted that in addition to work that will now be undertaken by Shell, APA Corporation and YPF on their Uruguayan blocks, various public statements and news releases indicate that relevant additional work and drilling activities are currently underway or being planned by multiple parties for 2023, including additional exploration and appraisal wells being drilled in Namibia, and 3D seismic acquisition in the adjacent Northern Argentina Basin. These activities are expected to further the regional technical understanding and thereby enhance the technical understanding of AREA OFF-1.

·      In particular, the Company notes recent reports to the effect that YPF has received environmental approval to acquire 3D seismic on its CAN 102 block in offshore Argentina, commencing in 2023. This block is immediately proximate to AREA OFF-1 in Uruguay.

·      Challenger Energy considers that the rapid entry through the course of 2022 into Uruguay of well-regarded international companies, and their commitments to undertake sizeable and meaningful work programs in the near-term (including 3D seismic acquisition and new well drilling), validates both the Company's decision to enter Uruguay in 2020, and underscores the solid technical foundation and excellent value proposition represented by the AREA OFF-1 block.

·      Further, the Company's technical view is that its AREA OFF-1 licence area, and the broader offshore Uruguay play system, is analogous to offshore Namibia, where there have been recent prolific, conjugate margin discoveries made by TotalEnergies (the Venus well) and Shell (the Graff well), and where reported multi-billion-barrel Cretaceous turbidite reservoirs have been encountered. Specifically, the AREA OFF-1 licence exhibits the same Aptian age play source rock and petroleum systems being present on existing 2D seismic.

·      As noted in previous Company releases, the AREA OFF-1 shallow-water block is in Year 1 of an initial four-year exploration period, which commenced on 25 August 2022, and during which time The Company's low-cost work commitment is to undertake G&G studies, 2D seismic data licencing and 2D reprocessing and interpretation. This work is currently underway, and Challenger Energy expects to substantially complete all required work in the first half of 2023, well ahead of schedule.

·      The AREA OFF-1 block contains a management estimated resource potential exceeding 1.5 billion barrels of oil equivalent recoverable (BBOE), based on current mapping from multiple exploration plays and leads in relatively shallow waters, and with significant upside running room. This estimate is corroborated by formal resource estimates provided by ANCAP of 1.35 BBOE as a P50 expected ultimate recoverable resource.

·      The Company's strategy in relation to the AREA OFF-1 block remains unchanged, which is to seek an appropriate farm-in partner in the near-term, that will realise value for the Company, as well as enable an accelerated work program on the block. Further updates will be provided as appropriate.

·      An updated presentation in relation to the AREA OFF-1 block will today be placed on the Company's website -


Eytan Uliel, Chief Executive Officer of Challenger Energy, said:

"In 2020, Challenger Energy successfully bid for the AREA OFF-1 block in Uruguay, and in so doing strategically gained first mover status offshore Uruguay. We were able to secure the block with a modest initial work commitment, which we are already well advanced to completing, considerably ahead of schedule.

Subsequently, in May 2022, three more blocks were awarded in a contested open round, to Shell (two blocks) and Apache (one block). Now, a further two blocks have been awarded in Uruguay in another contested open round, to each of a Shell-APA consortium and YPF, and YPF with partner Equinor is also poised to commence 3D seismic acquisition in a neighbouring block in Argentina. The estimated collective spend by those companies over the coming years on these activities is significant, in excess of $US230 million.

Overall, this means that almost all available offshore acreage in Uruguay has now been taken up, and apart from Challenger Energy, all by majors and NOCs who have committed to very sizeable work programs. This dramatic increase in interest in Uruguay and the neighbouring region is directly related to the very sizeable discoveries made in the conjugate margin Orange Basin in early 2022, and through the course of 2023 we hope to move forward with a farm-in, so as to capitalise on that increased interest and allow for accelerated work on our block. Further updates will be provided in due course."



In accordance with the AIM Note for Mining and Oil & Gas Companies, CEG discloses that Mr. Randolph Hiscock the Company's New Business Director and Uruguay Managing Director, is the qualified person who has reviewed the technical information contained in this document. He has a Masters in Science (Geology) and is a member of the AAPG & PESGB.  He has over 35 years' experience in the oil and gas industry.  Randolph Hiscock consents to the inclusion of the information in the form and context in which it appears.


For further information, please contact:


Challenger Energy Group PLC

Eytan Uliel, Chief Executive Officer

Tel: +44 (0) 1624 647 882

Strand Hanson Limited - Nomad

Rory Murphy / James Spinney / Rob Patrick

Tel: +44 (0) 20 7409 3494

Arden Partners plc - Broker

Simon Johnson

Tel: +44 (0) 20 7614 5900



Billy Clegg / Hugo Liddy / Sam Morris

  Tel: +44 (0) 20 3757 4980

Notes to Editors


Challenger Energy is a Caribbean and Americas focused oil and gas company, with a range of exploration, appraisal, development and production assets and licences, located onshore in Trinidad and Tobago, and Suriname, and offshore in the waters of Uruguay and The Bahamas. In Trinidad and Tobago, Challenger Energy has five (5) producing fields, two (2) appraisal / development projects and a prospective exploration portfolio in the South West Peninsula. In Suriname, Challenger Energy has on onshore appraisal / development project. Challenger Energy's exploration licences in Uruguay, the South West Peninsula of Trinidad, and The Bahamas offer high-impact value exposure within the overall portfolio value.


Challenger Energy is quoted on the AIM market of the London Stock Exchange. 




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