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(Sharecast News) - Caribbean and Americas-focussed oil and gas company Challenger Energy released its technical assessment report on the AREA OFF-1 block, offshore Uruguay on Wednesday.
The AIM-traded firm's report showed an initial prospect inventory of one to two billion barrels had been defined by its 2D seismic reprocessing work.
It further revealed that three sizable prospects were identified from a range of play types, consistent with those de-risked by recent successful conjugate margin drilling in Namibia by TotalEnergies and Shell.
The prospects had been seismically-derived, and supported and further de-risked by amplitude variation with offset (AVO) analysis.
According to the report, the play's robustness was corroborated by geochemical sampling and satellite seep analysis.
It said that the success of the conjugate margin, competitive recent licensing rounds in Uruguay, and technical uplift from Challenger's 2023 work would drive a farm-out process, soon to be initiated.
"In 2020, when no other parties were ready to commit, Challenger Energy was first-mover into offshore Uruguay, securing the AREA OFF-1 block on an uncontested basis and on highly advantageous work terms," said chief executive officer Eytan Uliel.
"Since then, margin-opening discoveries offshore Namibia by TotalEnergies and Shell have made it possible to correlate what are now proven, oil producing source rocks directly across into the conjugate margin basins of Uruguay's waters.
"As a result, Uruguay has become a new global exploration hotspot, evidenced by the fact that in the last 12 months all but one of the available offshore blocks have been licenced by oil majors and NOCs, bidding sizeable work programs."
Uliel said that in direct response to the exploration success in adjacent analogue basins and the emerging industry interest it generated, Challenger committed to "remaining ahead of the game", choosing to accelerate its AREA OFF-1 work programme late last year.
"The goal was to generate a newly derived, modern dataset supporting prospect definition.
"The resulting prospect inventory is now informed by reprocessed legacy 2D seismic, supported by AVO attribute analysis - hugely significant as this technique is widely used in the industry as a key indicator of potential hydrocarbons - and corroborated by additional geochemical and seep analysis studies.
"The results from this work have been extremely promising, in that we are now able to announce a technically supported prospect inventory of between one and two billion barrels in this globally attractive exploration hotspot."
Challenger's next-step was to farm-out to an industry partner, Eytan Uliel said, so it could fast-track a 3D seismic acquisition.
"The high-quality data set we have now compiled, and the intellectual property created, positions us well, and we will shortly be initiating a formal farm-out process."
At 1219 BST, shares in Challenger Energy Group were up 3.59% at 0.1p.
Reporting by Josh White for Sharecast.com.
