With 3D reprocessing of asset off Uruguay nearly done, Isle of Man-based firm hoping for 2026 drilling decision

Isle of Man-headquartered oil and gas company Challenger Energy Group (CEG) has shared an update on the reprocessing work being carried out for an exploration block off the coast of Uruguay.

According to Challenger, the technical work program for the AREA OFF-3 block is progressing well, with the full-depth reprocessing of 1,250 square kilometers of seismic data 90% complete. The block covers 13,000 square kilometers offshore Uruguay, with CEG as its 100% owner and operator.

Considering the improved quality of image and data, the reprocessing has revealed what the operator says are new, untested, exploration play concepts. The work is being done on around 4,000 km of legacy 2D and around 7,000 km of 3D acquired in 2012 by BP and PGS.

Challenger said it evaluated the pre-existing 3D dataset for the AREA OFF-3, based on which several leads have been screened and prospects matured. Once the final reprocessed 3D seismic data for the block is received, work can start on seismic interpretation and associated amplitude variation with offset (AVO) and gather analysis, followed by mapping and portfolio volumetric assessment.

The firm has also purchased various complementary technical studies and datasets relevant to the block. These studies are said to indicate the likely presence of multiple working petroleum systems in the area, and point to several “sweet spots” to focus on once the reprocessed 3D seismic is received.

As stated in the company’s presentation, the block has an analogous geology and depositional environment to the Pelotas basin acreage in Brazil the firm acquired in 2024 and is situated next to the upcoming ANP bid round.

The company said it plans to continue looking for a partner for the AREA OFF-3 block via a formal farm-out process in the second half of 2025, with operatorship and material equity available.

Challenger won the license for the block allowing it to expand its footprint in Uruguay in July 2023, followed by a formal agreement signing in March 2024. The first exploration period started on June 7, 2024, and is set to run for four years, until June 6, 2028.

In addition to this block, Challenger has a 40% stake in the AREA OFF-1 block, whose operator is Chevron since farming into the block in March 2024.

Considering the 3D seismic work ongoing at AREA OFF-1 and 3D seismic reprocessing at AREA OFF-3, drilling decision points on both blocks are targeted for 2026, the Isle of Man-based player’s website states.

The previous updates on the reprocessing work were provided by the company in January 2025 and November 2024.