Page 14 - LatAmOil Week 07 2023

LatAmOil NEWS IN BRIEF LatAmOil

a Trinidadian drilling and oil services company. (or approximately $7.1mn) is intra-group and
INVESTMENT The transaction was entered into and com- will be written-off as at the Completion Date.
pleted simultaneously, and is not subject to any Cash received from the transaction will be used
Challenger Energy condition precedent. The agreed consideration is for general working capital in the Company’s
$1.5mn, consisting of $1.2mn payable in cash (of operations.
announces sale of which $1mn has been received by the Company Eytan Uliel, CEO of Challenger Energy, said:
and $200,000 is payable by 15 March 2023) and “Through the transaction announced today we
Caribbean Rex approximately $300,000 in third-party liabilities get upfront cash, we give up only a small per-
centage of overall production, we are relieved of
that have been assumed by the buyer.
Challenger Energy, the Caribbean- and Amer- In addition, the buyer has committed to ful- various liabilities as well as the cost of a commit-
icas-focused oil and gas company, with oil pro- fil CSETL’s 2023 drilling commitments at the ted drilling campaign, and we retain optionality
duction, appraisal, development and exploration South Erin field, thereby relieving the Company while someone else drills those wells and funds
assets across the region, has entered into and of these commitments (3 new wells with an esti- that cost. This is consistent with the structure we
simultaneously completed a transaction for the mated cost of up to $5mn). adopted for the previously announced transac-
sale of its St. Lucia-domiciled subsidiary com- As part of the transaction, the Company has tion relating to the Cory Moruga licence and is,
pany, Caribbean Rex. retained a back-in option, granting the Com- generally speaking, the model for how we intend
Highlights: Sale of Caribbean Rex and asso- pany the right to repurchase a 49% non-operat- to take smaller, non-core assets in Trinidad for-
ciated assets and subsidiary entities for a value ing interest in the South Erin field. This back-in ward: through transactions that monetise the
of $1.5m: (immediate cash payment of $1mn, option may be exercised at the Company’s elec- assets and offset our operating and financial
received; subsequent payment of $200,000 due tion, at any time in the next 18 months. Consid- risks, yet retain upside exposure in a success
in mid-March 2023; and $300,000 of third party eration payable if the Company exercises the case.”
liabilities have been assumed by the buyer). In back-in option is a fixed cash amount of $1mn, Challenger Energy, 14 February 2023
addition, a three well drilling obligation at the plus 49% of all amounts spent by the buyer on
South Erin field (at a potential cost of up to South Erin field activities and new well drilling. Petrobras reports on
$5mn) will now pass from the Company to the The South Erin field currently produces
buyer, with the Company retaining an 18-month approximately 35 bpd of oil (representing less sale of LUBNOR refinery
option to repurchase a 49% interest in the South than 10% of CEG’s total Trinidadian produc-
Erin field in the event of the buyer’s drilling tion), but new well drilling by the buyer could Petrobras, in reference to the release of May 25,
success. significantly increase production through the 2022, informs that following up on the approval
Key terms of the Transaction: The Company course of 2023. CEG will be able to commercially process of the sale transaction of Refinaria Lubri-
has sold Caribbean Rex, an indirectly whol- assess the value of exercising the back-in option ficantes e Derivados do Nordeste (LUBNOR),
ly-owned St. Lucia incorporated subsidiary. against the outcomes of the drilling campaign on today’s date, the Court of the Administra-
Caribbean Rex in turn holds various assets and and the level of increased production. tive Council for Economic Defense (CADE)
subsidiary entities in St. Lucia and Trinidad. For the year to December 31, 2021, CSETL approved an order from Councilors Vitor Fer-
This includes (via interposed subsidiaries) CEG made a loss of TTD3.5mn (or approximately nandes and Lenisa Prado requesting the con-
South Erin Trinidad Ltd (CSETL), a Trinidadian $500,000). As at December 31, 2021, CSETL had tinuity of the analysis of the case by the Court.
company that is party to a farm-out agreement negative net book value (net liability position) of The measure approved today by CADE follows
for, and is the operator of, the South Erin field, approximately TTD51.6mn (or approximately the usual procedures of the proceedings in the
onshore Trinidad. The buyer of Caribbean Rex is $7.6mn), of which approximately TTD48.1mn Autarchy.

P14 www. NEWSBASE .com Week 07 15•February•2023