Chevron Uruguay Exploration Ltd. will acquire interest in the AREA OFF-1 block, offshore Uruguay, from Challenger Energy and its subsidiary CEG Uruguay SA and become operator.
The 14,557-sq km block lies about 100 km offshore in water depths of 80-1,000 m.
Chevron will operate the block with its acquired 60% participating interest. CEG Uruguay will retain 40% interest.
Chevron will pay $12.5 million cash on completion of the deal and will carry 100% of CEG Uruguay's share of costs associated with a 3D seismic campaign, up to $15 million net to CEG Uruguay.
Following the 3D seismic campaign, should Chevron decide to drill an initial exploration well on the block, Chevron will carry 50% of CEG Uruguay's share of costs associated with that well, up to a maximum $20 million net to CEG Uruguay.
Completion and financial close of the transaction is subject to conditions and customary approvals from the Uruguayan regulatory authorities, which are anticipated to take several months to finalize.