Challenger Energy, the Caribbean and Americas focused oil and gas company, with oil production, appraisal, development and exploration assets across the region, is pleased to update that, further to entry into a binding term sheet with Predator Oil & Gas and relevant subsidiary entities as announced on 20 December 2022, Predator has now completed all confirmatory due diligence and the Company and Predator have entered into fully-termed long-form legal documentation.

The terms remain unchanged from those previously announced on 20 December 2022, being:

• Predator will acquire 100% of the issued share capital of T-Rex Trinidad Limited ("T-Rex"), an indirectly wholly-owned subsidiary of the Company that holds the Company's 83.8% interest in, and is the operator of, the Cory Moruga licence;
• the Company will retain the option in the future to repurchase 25% of Predator's share in T-Rex on an agreed basis;
• CEG and Predator have established a collaboration in relation to CO2 enhanced oil recovery ("EOR") activities and projects in other areas in Trinidad; and
• the Company and Predator have agreed to a mutual settlement and discharge of all disputes and claims in relation to the Inniss-Trinity CO2 EOR pilot project.

Completion of the transaction is conditional on consent of the Trinidadian Ministry of Energy and Energy Industries ("MEEI") to a revised work programme for the Cory Moruga licence proposed by Predator, as well as agreement of MEEI to a revision of future fees for the Cory Moruga licence and a settlement / cancellation of past claimed dues pertaining to the Cory Moruga licence. Completion of the Transaction will occur 7 days after satisfaction of this condition. The parties have agreed to work together to secure the required consents and agreements with MEEI and thus achieve completion as soon as reasonably practicable on or before 30 May 2023, with a long stop date of 31 August 2023.

Subject to completion, the Transaction will represent a gross potential value proposition to Challenger Energy of up to US$9 million (as estimated by the parties to the Transaction), comprising:

• US$2.0 million payable to the Company by Predator in cash, in instalments as follows: (i) US$1 million upon completion of the transaction, and (ii) a further US$1 million on the date that is six months after completion;
• a further US$1 million conditional cash payment, payable once the Cory Moruga field production first reaches 100 barrels of oil per day;
• the option-value embedded in the retained back-in right;
• the removal of all ongoing T-Rex financial obligations, and the elimination of all T-Rex associated liabilities from the Challenger Energy balance sheet, as well as the elimination of all contingent and potential liabilities associated with the Cory Moruga licence, whether crystalised or not;
• the settlement of any outstanding loan amounts in respect of the Inniss-Trinity CO2 EOR pilot project (recognising that absent a settlement between the parties, such amounts would be recoverable only from incremental production from the Inniss-Trinity CO2 EOR pilot project area); and
• a full and final mutual settlement in respect of all disputes and claims between the parties in relation to the Inniss-Trinity CO2 EOR pilot.

The Transaction, in addition to the transaction involving Caribbean-Rex Limited as announced on 14 February 2023, is in line with the Company's strategy in Trinidad and Tobago of seeking to monetise assets not in the core area of operation, so as to maximise cash and offset risk and work program commitments, but at the same time retain upside exposure.

KeyFacts Energy: Challenger Energy Trinidad and Tobago country profile   l   Predator Oil & Gas Trinidad and Tobago country profile