Challenger Energy, the Caribbean and Atlantic-margin focused oil and gas company, with oil production, appraisal, development and exploration assets across the region, has provided an update in relation to the AREA OFF-1 petroleum licence offshore Uruguay.

• The AREA OFF-1 licence was awarded to the Company in May of 2020. Since that time there has been an extended period on non-activity, largely as a result of the Covid-19 pandemic, during which formal signature of the licence was pending.
• Following final approvals being granted by decree of the President of Uruguay, the AREA OFF-1 licence was formally signed on 25 May 2022. Consequently, the first 4-year exploration period under the licence has commenced.
• The Company's minimum work obligation during this initial period is to undertake relatively modest, low-cost reprocessing and reinterpretation of selected historical 2D seismic data. There is no drilling obligation in the initial phase. The Company's work program and budget for the balance of 2022 and into 2023 includes sufficient allocation of funds to progress the agree minimum work obligation on AREA OFF-1.
• AREA OFF-1 contains a management estimated resource potential exceeding 1 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 (the Uruguayan national oil company) of 1.36 BBOE as a P50 expected ultimate recoverable resource.
• The AREA OFF-1 play system is directly analogous to the recent prolific, conjugate margin discoveries made offshore Namibia by Total (the Venus well) and Shell (the Graff well), where reported multi-billion-barrel Cretaceous turbidite reservoirs have been encountered. The AREA OFF-1 licence exhibits the same Aptian play source rock and petroleum systems being present.
• The Company has received multiple indications of interest in relation to potential partnerships for the AREA OFF-1 licence. The Company intends to explore such possibilities, with a view to potentially expediting a 3D seismic acquisition into the first licence exploration period. 

Eytan Uliel, Chief Executive Officer of Challenger Energy, said:
"Two years ago, at the peak of a period of industry inactivity due to the pandemic, we identified a compelling opportunity to apply for the OFF-1 licence in Uruguay.  For very low cost we were able to secure an exploration licence of an extremely high quality, with a greater than 1-billion-barrel recoverable resource potential.

Since then, while waiting for formal approval of the licence, the world has changed in a way that makes this licence even more attractive. Globally significant developments are now underway along the South American Atlantic margin in Guyana and Suriname - basins with analogous technical characteristics. Even more significantly, very recent mega-discoveries from the South Atlantic conjugate margin to Uruguay, offshore Namibia, from two wells drilled by majors in the past few months, have calibrated and confirmed the play source rock and petroleum systems evident on seismic in OFF-1.

With the licence formally signed, we are now able to begin pushing ahead with our initial low-cost work program. At the same time, over the remainder of 2022 and into 2023 we will explore partnering options that could lead to an accelerated work program - the object being to quickly and fully evaluate the licence's potential, and to thereby create what we hope will be an opportunity of great value to shareholders."

Summary Information

• Asset: OFF-1
• Location: Offshore, Uruguay
• Ownership: 100%
• Operator: Challenger Energy
• Stage: Exploration
• Licence size: 15,000 km²
• Asset Type: Production Sharing Contract
• Anticipated Resource: 1 billion bbl (estimate)
• Fiscal Regime: Cost recovery and R-factor based production sharing
• Tenure: Pending formal signing

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