Challenger Energy Group shares soar on monster Uruguay potential

Challenger Energy Group shares jumped on Wednesday as the oil explorer said a recent study of its Uruguay assets estimates there could be up to 4.9 billion barrels of recoverable oil in place. This makes the asset a world-class project.

Listen to the recent UK Investor Magazine Podcast with Challenger Energy Group here.

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On a recent Podcast with UK Investor Magazine, CEO Eytan Uliel alluded to the potential of the AREA OFF-1 prospects. Today’s announcement confirms it.

Challenger’s AREA OFF-1 asset consists of three prospects; Teru Teru, Anapero and Lenteja.

These three prospects are estimated to hold a total Estimated Ultimate Recoverable resource of circa 2.0 billion BBOE (Pmean, unrisked, and over 4.9 BBOE in an upside case.

The world-class nature of the asset has attracted the interest of oil majors, and Challenger said their target is to complete a farm-out by the end of the year.

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“We continue to be encouraged by the opportunity that our AREA OFF-1 licence in Uruguay represents. Our technical work highlights how AREA OFF-1 is clearly world class acreage with massive resource potential, in what has become a global exploration hotspot,” said Eytan Uliel, Chief Executive Officer of Challenger Energy.

“To capitalise on this, I can confirm that a farm-out process has now commenced, with very strong initial indications of interest received from multiple major oil companies. Our target is to complete a farm-out transaction by year end, so that we can continue to rapidly progress work on the block, and thereby generate value for shareholders.”

Challenger Energy Group shares were 10% higher at the time of writing and had been considerably higher before traders booked profits.

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