Challenger selling Trinidad assets to focus on blocks off Uruguay

Isle of Man-headquartered oil and gas company Challenger Energy Group (CEG) has provided updates on the reprocessing work being carried out offshore Uruguay and the sale of its assets onshore Trinidad and Tobago.

Expressing satisfaction with how Challenger Energy is currently positioned, the oil and gas company’s CEO, Eytan Uliel, said in a recent update that his firm’s balance sheet is strong and work programs fully funded, noting there is no need for additional capital anytime in the foreseeable future.

“One-third of the way into the year, I can report that 2025 is progressing to plan. We’re on track to see 3D seismic acquired over AREA OFF-1 later this year, on track to complete our technical work on AREA OFF-3 and launch a farm-out process for that block in the second half of the year, and we’re progressing the sale of the Trinidad business,” pointed out Uliel.

Challenger holds a 100% interest in the country’s AREA OFF-3 block and a 40% stake in the AREA OFF-1 block, whose operator and the remaining 60% owner is Chevron since farming into the block in March 2024.

According to the Isle of Man firm, the Uruguayan Ministry of Environment is holding public consultations for the issuance of environmental permits for the proposed 3D seismic acquisition campaign over AREA OFF-1 and other areas in Uruguay. The company expects the necessary permits to be issued to allow for seismic acquisition on AREA OFF-1 to start in early Q4, 2025.

Ahead of this, various operators, including Chevron and Challenger, entered talks with seismic companies for planned surveys across the Uruguay offshore region. As explained, the goal is to optimize the 3D seismic program timing based on weather, acquisition parameters, and integrated operations.

Additionally, the reprocessing of 1,250 kilometers of 3D seismic data for AREA OFF-3 from the previously acquired BP survey is said to be largely complete. A satellite seep and slick study, a seabed geochemistry study, and a multibeam echo sound survey have also been completed. The results are described as encouraging and complementary to ongoing seismic work.

The company has also kicked off the next stage of the work program for AREA OFF-3, targeting finalization in early Q3 2025. This entails technical analysis and interpretation ahead of updated mapping, prospect definition, and volumetrics. Once this is completed, it is expected to underpin a formal farm-out process for AREA OFF-3 through the second half of 2025.

In February 2025, Challenger entered into an agreement to sell its operations onshore Trinidad and Tobago, encompassing the Goudron, Innis-Trinity, and Icacos fields, for a total transaction value of $6 million, and potentially up to $8 million if certain targets linked to production are achieved. The sale represents a complete exit from Trinidad and Tobago for the firm.

The company agreed to sell 100% of its St Lucia-domiciled subsidiary company, Columbus Energy, whose affiliates hold Challenger’s assets in Trinidad and Tobago, to Caribbean Rex Limited, an entity jointly owned by T-Rex Resources and the West Indian Energy Group.

At the time, Challenger Energy’s CEO pointed out that exiting Trinidad and Tobago allows his company to fully focus on its core assets in Uruguay. He believes the opportunity to create near-term value for the company’s shareholders is considerably greater in Uruguay.

While the agreement for disposal provided for the regulatory approval necessary for closing of the sale transaction to be finalized by April 30, 2025,  the company and the buyer have now agreed to a 60-day extension for completion of the sale, to June 30, 2025. 

As explained, the reason was administrative closing uncertainty due to the snap election called in Trinidad and Tobago, which resulted in a subsequent change of government.