(Alliance News) - Challenger Energy Group PLC on Wednesday said it secured a GBP3.3 million funding facility, initially drawing down GBP550,000.
This was alongside announcing an extension of completing the sale of an asset in Suriname and its chief executive planning to buy more shares in the company.
The Caribbean and America-focused oil and gas company said the funding would be used to support business development, including continuing with its accelerated technical work programmes in Uruguay. This relates to both the Area Off-1 block and the newly awarded Area Off-3 block.
Challenger Energy said the funding would also be used to progress business development opportunities in Trinidad.
Having initially drawn down GBP550,000, Challenger Energy said the remainder of the GBP3.3 million facility would be available for future drawdown at the company's option.
Challenger Energy also announced a three-month extension for the completion of sale of the Cory Moruga asset in Trinidad & Tobago. This is because the sale is currently awaiting regulatory approval.
This was alongside relinquishing the Weg Naar Zee PSC in Suriname, which Challenger Energy said was consistent with its strategy to focus on its core assets.
"In the last year, across the broader Challenger Energy business, we have completed value-enhancing technical work, improved production operations, high-graded our portfolio, secured new assets, and ensured a range of options are available to deliver additional funds into the business. Progress has been substantial, but the timing of when we need to spend and when we will see cash inflows is not always within management's control," Chief Executive Officer Eytan Iliel explained.
"We have therefore now taken steps to ensure that we have flexible additional funding available, if and when needed, so that we can press on with accelerating new licences and high prospect business development opportunities in both Uruguay and Trinidad."
Challenger Energy also announced that Illiel intends to purchase around 60 million shares in the company to increase his shareholding to around a 6% stake.
Illiel continued: "I am excited with how Challenger Energy is now poised - a honed portfolio, a clear focus on those assets which are world-class and have the potential to deliver a major value uplift in the near term, and the financial flexibility to take disciplined portfolio decisions when opportunity presents.
"Day by day I believe we are creating intrinsic value which I strongly believe will ultimately be rewarded and which is why I am increasing my personal holding in the company at this time. I look forward to sharing news of continued progress with fellow shareholders over the coming months."
Shares in Challenger Energy were down 18% to 0.070 pence each in London on Wednesday morning.
By Greg Rosenvinge, Alliance News reporter
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Challenger Energy (CEG)