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(Alliance News) - Challenger Energy Group PLC on Tuesday said it has completed the sale of its subsidiary Caribbean Rex Ltd to a Trinidadian drilling and oil services company for a total of USD1.5 million.
Challenger Energy is a Caribbean and Americas focused oil and gas company with onshore and offshore assets in Trinidad and Tobago, Suriname, Uruguay and The Bahamas.
The company said it had entered into and simultaneously completed the sale of its wholly-owned St Lucia based subsidiary, with the sale including CEG South Erin Trinidad Ltd.
Challenger said it has received an initial cash payment of USD1 million, with a subsequent payment of USD200,000 due in mid-March, and USD300,000 of third party liabilities assumed by the buyer.
The company noted that the buyer has committed to fulfil CSETL's drilling commitments at the South Erin field, with three new wells to be drilled at a cost of USD5 million.
AS part of the sale, Challenger has the right to repurchase a 49% non-operating interest in the South Erin field within the next 18 months. The South Erin field currently produces 35 barrels of oil per day, with new drilling potentially increasing production significantly.
Chief Executive Officer Eytan Uliel said: "Through the transaction announced today we get upfront cash, we give up only a small percentage of overall production, we are relieved of various liabilities as well as the cost of a committed drilling campaign, and we retain optionality while someone else drills those wells and funds that cost."
Challenger Energy shares were up 2.1% trading at 0.12 pence per share on Tuesday morning in London.
By Harvey Dorset, Alliance News reporter
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