Sintana Energy Inc. Announces Acquisition of Challenger Energy Group PLC

Executive Summary

• Sintana Energy Inc. announced a definitive all‑share agreement to acquire 100 % of Challenger Energy Group plc, valuing Challenger at approximately £44.7 million (≈ C$83.6 million) on a fully diluted basis.
• The transaction offers Challenger shareholders ~0.4705 Sintana shares per Challenger share, representing a premium of roughly 44‑97 % to recent market prices.
• Post‑closing, Challenger shareholders will own about 25 % of the combined company; the deal is expected to close by Q4 2025 pending customary approvals.

Key Details

• Consideration: 0.4705 Sintana common shares for each Challenger share.
• Implied Valuation: £44.72 million (≈ C$83.63 million) fully diluted; implied price of 16.61 pence per Challenger share (C$0.3105).
• Premiums: ~44 % to the closing price, ~97 % to 3‑month VWAP, ~96 % to 6‑month VWAP.
• Ownership Impact: Challenger shareholders to hold ~25 % of Sintana’s issued share capital after completion.
• Closing Timeline: Expected by end of Q4 2025, subject to regulatory, stock‑exchange and shareholder approvals.

Strategic Highlights

• Combined portfolio will span eight licences in Namibia and Uruguay plus legacy assets in the Bahamas and Colombia.
• Diversified exposure to high‑impact hydrocarbon plays with major‑partner support (e.g., Chevron, ANCAP).
• Immediate cash resources > US$10 million; enhanced ability to access additional funding.

Asset Details – Challenger

• Uruguay Offshore Blocks:
• AREA OFF‑1 – 40 % working interest (Chevron 60 % operator), ~14,557 km².
• AREA OFF‑3 – 100 % working interest, ~13,252 km².
• Farmout Agreements (AREA OFF‑1): Chevron acquired 60 % interest; Challenger retained 40 %; received US$12.5 million cash and cost‑carry arrangements for 3D seismic (up to US$37.5 M) and potential well drilling (up to US$100 M).
• Technical Work: Completed first phase on AREA OFF‑3, identifying two prospects (Benteveo, Amalia); farmout process underway with offers expected Q4 2025–Q1 2026.

Other Assets & Transactions

• Trinidad Production Assets: Sold to Caribbean Rex Ltd.; cash received US$750k plus staged payments totalling US$1 M through 2027.
• Bahamas Licences: Historic exploration; considering legal remedies for licence renewal delays.

Financial Position (Challenger)

• Cash as of 30 Jun 2025: ≈ US$6.6 million (excluding restricted cash and receivables).
• Burn rate sufficient to fund operations through 2027 without additional capital.

Approvals & Conditions

• Scheme of arrangement under Isle of Man Companies Act; requires:
• Challenger shareholder majority approval, court sanction, TSXV conditional approvals (Acquisition & Admission), ANCAP consent, Chevron JOA exemption, and relevant Bahamas regulatory consents.
• Rule 2.7 offer announcement published on Sintana website.

Post‑Closing Management Changes

• Eytan Uliel (Challenger CEO) → President & Executive Director of Sintana.
• Iain McKendrick (Challenger Non‑Exec Chair) → Non‑Executive Director of Sintana.
• Keith Spickelmier (Sintana Exec Chair) → Non‑Executive Chair.
• Jonathan Gilmore (Challenger Finance Dir) → CFO of Sintana.
• Several existing Sintana directors to resign; other executive transitions noted.

Financing Arrangement

• Sintana entered a US$4 million working‑capital loan facility with shareholder Charlestown, effective at closing and contingent on TSXV approval.

Advisors

• Joint financial advisors: Cavendish Capital Markets Ltd., Pareto Securities AS.
• Nominated advisor for AIM admission: Zeus Capital Ltd.
• Legal counsel: Pinsent Masons LLP (UK), Fogler, Rubinoff LLP (Canada).

Notable Quotes

“The combination of Sintana and Challenger delivers on our long‑term strategy to create and execute on a portfolio of exposures to high impact exploration opportunities,” – Robert Bose, CEO, Sintana Energy Inc.