Challenger Energy (CEL)

Business description

Challenger Energy is an ASX-listed E&P with a 95% interest in an application for an exploration permit in the Karoo basin, South Africa, which is prospective for shale gas. It is awaiting award of a permit to start drilling.

South Africa backdrop still supportive for shale gas

Update | Oil & Gas | 28/04/2015

Challenger Energy (CEL) is making progress towards the award of exploration permits with the submission of the updated environmental management programme (EMPr) in late February. If the legislative framework is in place by this northern hemisphere summer, CEL could potentially be awarded a licence and commence its work programme in Q315, with corehole drilling starting 12-18 months later. Meanwhile, the power crisis in South Africa is getting worse, highlighting the need for new energy sources including gas. CEL remains in farm-out discussions. A licence award and farm-out could lead to a near-term re-rating, with longer-term upside based on drilling success.

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