Challenger Energy Provides June 2021 Trading and Corporate Update

Source: www.gulfoilandgas.com 6/29/2021, Location: South America

As previously announced, due to the impact of COVID-19 in each of its countries of operation, and in particular due to the extended current lockdown in Trinidad and Tobago, Challenger Energy (AIM: CEG), will be unable to post its annual audited accounts to shareholders for the year to 31 December 2020 by the 30 June 2021 deadline pursuant to AIM Rule 19.

Further to the guidance provided by AIM Regulation in "Inside AIM" on 27 January 2021, the Company requested and was granted an additional period of up to three months to publish its Annual Report, such that the Company will publish its Annual Report by 30 September 2021. The Company however now provides a trading and corporate update to shareholders.

Trading Update

· Production and drilling operations have been maintained despite almost continuous COVID-19 related restrictions on the movement and availability of staff and contractors. Diligent compliance with all in-country mandates has been maintained, along with additional Company procedures to ensure the health and welfare of all staff

· For the 5 months (post acquisition of Columbus Energy Resources plc) to 31 December 2020 aggregate gross production from the Company's five producing assets in Trinidad was 64,088 bbls, generating gross revenues of $2.3m

· For the period Jan 2021 to May 2021, aggregate gross production from the Company's five producing assets in Trinidad was 64,319 bbls, generating gross revenues of $3.3m

· As advised by the Company on 24 June 2021, the Company expects to complete drilling and logging of the Saffron-2 well in Trinidad on or about 30 June 2021, and to thereafter commence a production test of the well in mid-July 2021 = further announcements will be made in due course

· The Company has progressed all major workstreams necessary to commence drilling an initial well at the Weg Naar Zee project in Suriname. Due to ongoing adverse COVID-19 circumstances in Suriname, the operational expectation is that commencement of drilling will be in late August / early September

· The Company has achieved STOW (Safe To Work) accreditation in its main centre of operation in Trinidad, and remains on track to produce its first comprehensive ESG strategy during 2021

Corporate Update

· Major elements of the Company's 'reset' program, which commenced in April 2021, have been completed, including name change, share consolidation, board and management transition, and capital raising

· As at 31 May 2021, the Company had unrestricted cash and cash equivalent holdings of $10.7 million

· Cost saving initiatives implemented across the Company have thus far given rise to an overall saving of approx. 15% against recurring Group overhead on an annualised basis; additional cost savings initiatives will continue to be implemented over the coming months with a view to achieving the stated savings target of 20% - 30%

· A number of drilling and services contractor creditor discussions remain to be finalised and for payments to be agreed and scheduled - further updates will be made in due course

· The Company is actively working on securing various additional sources of funding, in particular debt and hybrid-debt facilities, for both development of the Company's assets and working capital purposes. At the same time, the Company is evaluating various growth and transactional opportunities - further announcements will be made as appropriate

Eytan Uliel, Chief Executive Officer, commented:

"In April we laid out a plan to 'reset' this Company, focussed around the core strategic objective of growing production and cashflow. I can report that we are making solid progress against this goal. Operationally, we will shortly complete and production test the Saffron-2 well in Trinidad, we are looking toward commencing drilling in Suriname as soon as circumstances allow, and we are maintaining production from existing fields. Corporately, we are tightly managing our finances, implementing cost reduction initiatives, and looking to define the future shape of the Company - including taking tangible steps towards introducing less dilutive debt funding sources into our overall funding mix. Much remains to be done, and the next six months will be a busy time for Challenger Energy. We will keep shareholders regularly informed as to our progress."


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