Consolidation continues across oil & gas realm as Sintana makes a play for Challenger

Canada-headquartered oil and natural gas exploration player Sintana Energy has put the wheels in motion to spread its wings to Uruguay’s oil and gas arena by bringing into its fold Challenger Energy Group (CEG), the Isle of Man-headquartered oil and gas company.

Blocks offshore Uruguay; Source: Challenger Energy

Sintana’s agreement with Challenger Energy on the terms of an all-share acquisition will enable it to obtain all the issued and to be issued ordinary share capital of the Isle of Man-based firm, which is focused on Uruguay’s hydrocarbon potential and holds interests in two blocks: AREA OFF-1, where the firm has a 40% working interest and Chevron the remaining 60% stake as the operator, and the 100% operated AREA OFF-3. The company also holds legacy assets in the Bahamas.

Challenger shareholders will receive approximately 0.4705 common shares of Sintana for each ordinary share held. Based upon the closing price of CDN 0.66 ($0.72) per Sintana share on the TSX Venture Exchange (TSXV) on October 8, 2025, and the exchange rate of 1.87, the acquisition represents an implied value of 16.61 pence per Challenger share or approximately CDN 0.3105 ($0.22).

This values the entire issued and to be issued share capital of the Isle of Man-headquartered firm at approximately £44.72 million or around CDN 83.63 million ($59.93 million) on a fully diluted basis.

The terms of the acquisition are perceived to represent a premium of about 44% to the closing price of 11.5 pence per Challenger share on October 8, 2025; 97% to the volume weighted average price of 8.41 pence per the Isle of Man-based company’s share for the three months ended on the same date; and 96% to the volume weighted average price of 8.48 pence per Challenger share for the past six months.

Following the completion of the acquisition, the Isle of Man-headquartered player’s shareholders will own approximately 25% of the issued share capital of Sintana, which intends to seek admission of its shares to trading on AIM in the fourth quarter of 2025. The independent directors of the Isle of Man-based firm’s board intend to unanimously recommend that its shareholders vote in favor of the acquisition.

The Canadian company claims to have received irrevocable undertakings from certain Challenger shareholders, including directors, to vote in favor of the acquisition, representing, in aggregate, approximately 34.2% of the Isle of Man-based company’s issued ordinary share capital as of October 8, 2025.

The completion of the acquisition, which is subject to customary regulatory, stock exchange, and Challenger shareholder approvals, is expected to close by the end of the fourth quarter of 2025. This business combination is anticipated to create an exploration platform spanning the Southern Atlantic conjugate margin.

With a combined portfolio offering high-impact exposure to two of the world’s currently most active and emerging hydrocarbon exploration geographies, the merger is poised to establish a diversified portfolio of licenses at various levels of maturity, underpinned by partnerships with majors that are said to provide significant financial and operational support to reach material milestones.

The combined company will have interests in eight licenses in Namibia and Uruguay, as well as legacy assets in the Bahamas and Colombia, providing diversified exposure to a range of geologic plays, basins, operators, regulators, and geopolitical regimes, establishing a portfolio anchored by an interest in the discoveries at Mopane together with an expanded horizon of additional high-impact exploration catalysts.

Bolstered by a combined board and management team with deep sector expertise and commercial capabilities, the acquisition will create a larger, more diversified entity with significant carry support on key licenses, immediate cash resources over $10 million, and an improved capacity to access funding when required to fully prosecute the existing portfolio and grow the business.

Robert Bose, Chief Executive Officer of Sintana, commented: “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.

“Expanding our aperture to capture the promise of the Atlantic margin from Namibia and Angola to Uruguay with a diversified portfolio of development stage and exploration assets creates a market leader positioned to deliver significant success.”

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