Challenger Energy has signed the AREA OFF-3 licence for oil and gas exploration offshore Uruguay.

The licence, awarded under the Open Uruguay Round, has a four-year exploration period.

Covering an area of 13,252km², the AREA OFF-3 licence is situated in relatively shallow water depths, around 100km off the Uruguayan coast.

With a commencement date set for 7 June 2024, the licence marks a significant step in the region's exploration activities.

The block's potential includes up to approximately 2bbbl of oil and 9tcf of gas, identified across two material prospects with substantial seismic data coverage.

During the initial exploration period at the licence, Challenger Energy's obligations include the reprocessing of 1,000km of legacy 2D seismic data and conducting two geotechnical studies.

The company aims to replicate the strategy used for the AREA OFF-1 licence, intending to accelerate technical work, enhance prospect quality and attract strategic partners early on.

Challenger Energy CEO Eytan Uliel said: “Following on from our recently announced farm-out of the AREA OFF-1 licence to Chevron (pending regulatory approvals), we are very pleased to announce that the AREA OFF-3 licence has now been formally signed, cementing Challenger Energy's position as a significant industry participant in Uruguay's offshore.

“AREA OFF-3 represents a successful expansion of the company's business in Uruguay, a country that has fast become one of the world's frontier exploration hotspots. We believe that AREA OFF-3 has strong technical merit and offers an exciting value-creation opportunity.

“Therefore, like with AREA OFF-1, our immediate strategy for AREA OFF-3 is to commence accelerated technical work, in support of seeking an early farm-out. We look forward to keeping shareholders informed of our progress.”

Recently, Challenger Energy and its subsidiary CEG Uruguay signed a farm-out agreement with Chevron subsidiary Chevron Uruguay Exploration for a 60% interest in the AREA OFF-1 block offshore Uruguay.