LatAmOil: Chevron signs farm-in deal for AREA OFF-1 block offshore Uruguay

AIM-listed Challenger Energy has concluded a farm-out agreement that will allow Chevron Uruguay Exploration, a subsidiary of the US major Chevron, to obtain a majority stake in the AREA OFF-1 block offshore Uruguay.

Challenger said in a press release on March 6 that the agreement, which is still pending regulatory approval, would allow Chevron to acquire a 60% participating interest in the AREA OFF-1 licence. The deal is designed to facilitate and fund an accelerated 3D seismic acquisition programme during the initial four-year exploration period, it said.

Under the terms of the transaction, Chevron will assume operatorship of the block, while CEG Uruguay, a wholly-owned subsidiary of Challenger Energy, will retain a 40% non-operating interest.

Upon completion of the transaction, Chevron will pay the sum of $12.5mn in cash to CEG, which will make these funds available to support the further development of its parent company’s business.