Challenger Energy - Operational Update & Exercise of Warrants

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

6 May 2025

Challenger Energy Group PLC

 Operational Update

Exercise of Warrants

Challenger Energy Group PLC (AIM:CEG, OTCQB:BSHPF) ("Challenger" or "the Company"), the Atlantic margin focused energy company, is pleased to provide the following operational update, and to advise of the exercise of warrants.

Eytan Uliel, CEO of Challenger Energy, said: 

"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. Our balance sheet is strong, our work programs are fully funded, and we have no need for additional capital any time in the foreseeable future. Overall, we're pleased with how Challenger Energy is currently positioned, and we look forward to sharing news as the rest of the year unfolds."

Uruguay AREA OFF-1 (60% Chevron - operator; 40% Challenger)

·    The Uruguayan Ministry of Environment is holding public consultations regarding the issuance of requisite environmental permits for the proposed 3D seismic acquisition campaign over AREA OFF-1, as well as over other offshore areas in Uruguay under contract to other industry participants. The Company expects the necessary permits will be issued to allow for seismic acquisition on AREA OFF-1 to start in early Q4, 2025.

·    In anticipation of permits being issued, various operators are already in discussions with seismic companies for planned surveys across the Uruguay offshore region. The goal is to optimise the 3D seismic programme timing based on weather, acquisition parameters and integrated operations seeking incident free and efficient acquisition campaigns. The parties associated with AREA OFF-1 (operator Chevron, Challenger) are working collaboratively in this process.

Uruguay AREA OFF-3 (100% Challenger - operator)

·    Reprocessing of 1,250 km of 3D seismic data from the previously acquired BP survey is now largely complete. A satellite seep and slick study, a seabed geochemistry study and a multibeam echo sound survey have also been completed, with encouraging complementary results to ongoing seismic work (refer to the Company's RNS of 5 March 2025).

·    The next stage of the Company's work program for AREA OFF-3, being technical analysis and interpretation ahead of updated mapping, prospect definition and volumetrics, has commenced, with anticipated completion in early Q3 2025. Once finalised, this work programme (similar in scope to that successfully undertaken for AREA OFF-1) is expected to underpin a formal farm-out process for AREA OFF-3 through the second half of 2025.

Trinidad and Tobago

·    In February 2025 the Company entered into an agreement for the disposal of the entirety of its operations in Trinidad and Tobago for a total transaction value of $6 million, and potentially up to $8 million (refer to the Company's RNS of 18 February 2025).

·    The agreement for disposal provided for the regulatory approval necessary for closing of the sale transaction to be finalised by 30 April 2025. The Company and the buyer have agreed to a 60-day extension for completion of the sale, to 30 June 2025 following administrative closing uncertainty due to the snap-election called in Trinidad and Tobago in mid-March. The resulting election, held on 28 April 2025, led to a subsequent change of Government.

Corporate

·    The Company's admission to trade on the OTCQB Venture Market in the United States became effective in April 2025 (refer to the Company's RNS of 2 April 2025), with encouraging initial interest from U.S.-based investors. The Company has and will continue to engage in a broad range of marketing efforts to introduce the Company to new potential investors in the U.S. / North America, as well as continuing to support regular engagement activities within the UK.

·    Despite the currently turbulent market conditions and lower oil prices, the Company confirms that it has sufficient funding available to meet all currently projected expenses and work program costs through at least all of 2025 and 2026.

Exercise of Warrants

·    The Company has received notification from a warrant-holder to exercise warrants to subscribe for a total of 3,591,338 new ordinary shares of 1p each ("Warrants") in the share capital of the Company (the "New Ordinary Shares") with an exercise price of 5 pence per share. The warrant-holder is a service provider to the Company who was awarded Warrants as part of compensation for services - no other options or warrants are being exercised by any Directors / PDMRs of the Company. Accordingly, the Company will proceed to issue the New Ordinary Shares to the warrant-holder for an aggregate cash value of £179,566.90.

·    Application will be made for admission to trading on the AIM of a total of 3,591,338 New Ordinary Shares of 1p each ("Admission"). It is expected that Admission will be effective on or around 9 May 2025. On Admission the New Ordinary Shares will rank pari passu with the Company's existing ordinary shares.

·    Following Admission, the Company's issued share capital will consist of 249,312,660 ordinary shares, with each ordinary share carrying the right to one vote. The Company does not hold any ordinary shares in treasury. This figure of 249,312,660 ordinary shares may therefore be used by shareholders in the Company, as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

For further information, please contact:

Notes to Editors

Challenger Energy is an Atlantic-margin focused energy company, with a current high-impact position in Uruguay, where the Company holds two offshore exploration licences, totalling 19,000km² (gross) and is partnered with Chevron on the AREA-OFF 1 block. Challenger Energy is quoted on the AIM market of the London Stock Exchange and the OTCQB in the United States.

https://www.cegplc.com 

ENDS