Fossil Energy – Uruguay
Challenger Energy and its wholly-owned Uruguayan subsidiary, CEG Uruguay, have entered into a farm-out agreement with Chevron Uruguay Exploration related to a 60% interest in the AREA OFF-1 block, offshore Uruguay.
CEG Uruguay will retain a 40% non-operating interest.
Chevron will pay to CEG $12.5 million cash on completion of the transaction. Chevron will carry 100% of CEG Uruguay’s share of the costs associated with a 3D seismic campaign on AREA OFF-1, up to a maximum of $15 million net to CEG Uruguay.
Following the 3D seismic campaign, should Chevron decide to drill an initial exploration well on the AREA-OFF 1 block, Chevron will carry 50% of CEG Uruguay’s share of costs associated with that well, up to a maximum of $20 million net to CEG Uruguay.
