Page 14 - LatAmOil Week 01 2023

LatAmOil NEWS IN BRIEF LatAmOil

This Transaction, along with the potential DBO of the AREA OFF-2 and AREA OFF-7 blocks to proposition represented by the AREA OFF-1
business combination and the recent direct new Shell, and the AREA OFF-6 block to APA. block.
share issue, will grant the necessary liquidity to As a result of the recent awards, all but one Further, the Company’s technical view is that
pursue the Company’s current investment plan of the available offshore exploration blocks in its AREA OFF-1 licence area, and the broader
and new strategic positioning with an enhanced Uruguay have now been licenced, and with the offshore Uruguay play system, is analogous to
capital structure. exception of Challenger Energy, all have been offshore Namibia, where there have been recent
Maha Energy, 28 December 2022 licenced to global oil and gas majors. prolific, conjugate margin discoveries made
The aggregate value of work now commit- by TotalEnergies (the Venus well) and Shell
Challenger Energy provides ted across blocks AREA OFF-2, AREA OFF- (the Graff well), and where reported multi-bil-
4, AREA OFF-5, AREA OFF-6 and AREA lion-barrel Cretaceous turbidite reservoirs have
update on AREA OFF-1 block OFF-7 by Shell, APA and YPF during the next been encountered. Specifically, the AREA OFF-1
four years, in respect of both technical and licence exhibits the same Aptian age play source
offshore Uruguay exploration activities including well drilling, is rock and petroleum systems being present on
existing 2D seismic.
estimated by ANCAP to be in excess of approx-
AIM-listed Challenger Energy, the Caribbean- imately $230mn. As noted in previous Company releases, the
and Americas focused oil and gas company, The full text of the announcement by ANCAP AREA OFF-1 shallow-water block is in Year 1
with oil production, appraisal, development is available on ANCAP’s website. of an initial four-year exploration period, which
and exploration assets across the region, notes It is noted that in addition to work that will commenced on August 25, 2022, and during
recent media reports and confirms as follows: now be undertaken by Shell, APA and YPF on which time The Company’s low-cost work
On December 27, 2022, ANCAP, Uruguay’s their Uruguayan blocks, various public state- commitment is to undertake G&G studies, 2D
national energy company, announced that a fur- ments and news releases indicate that relevant seismic data licencing and 2D reprocessing and
ther two offshore blocks in Uruguay have been additional work and drilling activities are cur- interpretation. This work is currently underway,
awarded following competitive bids received in rently underway or being planned by multiple and Challenger Energy expects to substantially
the Second 2022 ANCAP Open Bidding Round. parties for 2023, including additional explora- complete all required work in the first half of
The AREA OFF-4 deep-water offshore block, tion and appraisal wells being drilled in Namibia, 2023, well ahead of schedule.
which is immediately adjacent to Challenger’s and 3D seismic acquisition in the adjacent The AREA OFF-1 block contains a manage-
AREA OFF-1 shallow water exploration block, Northern Argentina Basin. These activities are ment estimated resource potential exceeding
has been awarded to a consortium of Shell and expected to further the regional technical under- 1.5bn barrels of oil equivalent (boe) recover-
APA Corp. (formerly known as Apache). AREA standing and thereby enhance the technical able, based on current mapping from multiple
OFF-4 was the subject of competitive bids understanding of AREA OFF-1. exploration plays and leads in relatively shallow
received from the winning consortium and from In particular, the Company notes recent waters, and with significant upside running
YPF (the Argentinian National Oil Company). reports to the effect that YPF has received envi- room. This estimate is corroborated by formal
ANCAP has reported that the consortium has ronmental approval to acquire 3D seismic on resource estimates provided by ANCAP of
committed to undertake extensive work on the its CAN 102 block in offshore Argentina, com- 1.35bn boe as a P50 expected ultimate recover-
AREA OFF-4 block in the initial four-year explo- mencing in 2023. This block is immediately able resource.
ration period, including 3D seismic acquisition. proximate to AREA OFF-1 in Uruguay. The Company’s strategy in relation to the
Additionally, the AREA OFF-5 deep-wa- Challenger Energy considers that the rapid AREA OFF-1 block remains unchanged, which
ter offshore block has been awarded to YPF. entry through the course of 2022 into Uruguay is to seek an appropriate farm-in partner in the
ANCAP has reported that YPF has committed to of well-regarded international companies, and near-term, that will realise value for the Com-
undertake an extensive technical work program their commitments to undertake sizeable and pany, as well as enable an accelerated work
on the AREA OFF-5 block in the initial four-year meaningful work programs in the near-term program on the block. Further updates will be
exploration period. (including 3D seismic acquisition and new well provided as appropriate.
The award of these two blocks is in addition drilling), validates both the Company’s decision Eytan Uliel, CEO of Challenger Energy, said:
to the award to Challenger of the AREA OFF-1 to enter Uruguay in 2020, and underscores the “In 2020, Challenger Energy successfully bid for
block in May 2020, and the awards in May 2022 solid technical foundation and excellent value the AREA OFF-1 block in Uruguay, and in so
doing strategically gained first mover status off-
shore Uruguay. We were able to secure the block
with a modest initial work commitment, which
we are already well advanced to completing, con-
siderably 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 com-
mence 3D seismic acquisition in a neighbour-
ing block in Argentina. The estimated collective
spend by those companies over the coming
years on these activities is significant, in excess
of $230mn.

P14 www. NEWSBASE .com Week 01 04•January•2023