Challenger Energy Limited is a public company listed on the Australian Stock Exchange (ASX:CEL) with a growing portfolio of exciting Oil and Gas exploration opportunities in South Africa and the USA. The company changed its name from Sunset Energy Limited (ASX:SEY) on 13 December 2010 to reflect the changing nature of its business.
Challenger’s strategy is to utilise its network of global contacts to identify and acquire material upstream oil and gas exploration opportunities at a low entry cost which enables it to focus its exploration expenditure on drilling wells and other direct expenditure.
Challenger is targeting opportunities where it can act as operator, and which have significant scale and materiality (more than 1 TCF of gas or 10 Million bbl of Oil). The scale of these opportunities provides potentially significant upside for the company.
In December 2009, Challenger Energy Limited acquired all of the issued shares in the capital of Bundu Gas and Oil Exploration (Pty) Limited (“Bundu”) a company registered in South Africa) which holds 100% of exploration permits and applications covering approximately 5400 square kilometres of highly prospective acreage in South Africa.
This comprises the Thelma Project, an oil and gas exploration project located in the northeast edge of the northern Karroo Basin of South Africa (and includes the Thelma 2 project application) and the Cranmere project application located in the Eastern Cape Province, north of the port city of Port Elizabeth.
In June 2010 Challenger Texas Exploration LLC, a wholly owned subsidiary of Challenger Energy Limited entered into a Lease Purchase and Exploration Agreement with a private exploration company based in Texas to acquire an 80% Working interest (100% before payout) in Leases and an Area of Mutual Interest covering the Triple Crown Prospect located in Edwards County, Texas.
The Triple Crown prospect possesses three reservoir zones across over 45,000 acres of leasehold. It is estimated that there is 9 TCF of gas in place across this holding contained within the three reservoir zones.
Challenger Energy completed drilling its first appraisal well on the structure in January 2011. The well reached a TD of 7,431 ft and intersected a gas charged zones in excess of 2,300 ft, which could produce conventionally, unconventionally or a combination of both.
In August 2011, Challenger acquired an interest in the Mercury Stetson prospect, which consists of two proven shale formations, the Barnett and Woodford. Under the terms of the agreement Challenger can earn a 50% interest by:
- Paying up to US$2.2 million as and when required for the renewal and extension of existing leases plus the acquisition of additional leases;
- Drilling, fracture stimulating, and completing two vertical wells;
- Conducting a seismic program funded partially by revenue from the first well; and
- Connecting the two wells to the nearby sales pipeline.
Following completion of this initial program, Challenger will have a 50% interest in the permit leases which currently total ~ 26,000 net acres. The Joint Venture will target a controlling interest of at least 35,000 net acres (~ 55 sq.miles) across the prospect area over the remainder of 2011 and early 2012, therefore the initial focus of the Mercury Stetson Joint Venture is to extend and renew the existing leases across the area to provide control of the prospect with long term leases.
Once this has been substantially completed, the first operation will be to re-enter the existing well on the Mercury Stetson Prospect and redrill through the Barnett and Woodford shales. Modern electrical
