The Bahamas

In The Bahamas, Challenger Energy holds 100% of four (4) exploration licences covering approximately 12,600km² (subject to 50% relinquishment as part of the renewal process). These licences are located in the southern territorial waters of The Bahamas, together referred to as the “Southern Licences” (Bain, Cooper, Donaldson, Eneas) All licences were awarded for an initial exploration period of three years, with up to three further exploration periods possible. The Southern Licences are commercially co-joined, meaning that the fulfilment of work obligations on any one of the Southern Licences will satisfy the work obligation in respect of all the Southern Licences.

Drilling of the Perseverance-1 well in The Bahamas commenced on 20 December 2020 and was completed in February 2021. The well was drilled offshore at a location approximately 20 miles from the Bahamas-Cuba maritime border, in water depth of approximately 518 meters. The well was drilled safely and without incident, despite the adverse and ever-changing impacts of the global pandemic, with stringent (and costly) COVID-19 management protocols operating effectively throughout the drilling campaign, and the attempts (ultimately unsuccessful) by environmental activists to derail the Company’s Government-approved operations. The successful completion of Perseverance-1 well represented the first exploration drilling in The Bahamas since the mid-1980s, and the first test of any prospect located in deeper waters off the shallower water carbonate banks. The well reached a depth of 3,905 meters, having intersected five Albian, Upper Aptian, and Mid-Aptian geological horizons of interest. Following completion of drilling operations, the well was plugged and secured in accordance with international and BSEE (Bureau of Safety and Environmental Enforcement) standards. The well did not result in a discovery at the drilling location, with the source quality and migration interpreted as being the primary reason for this well outcome. However, post-well petrophysical analysis of the well logs confirmed high quality reservoirs down to the base of the well, with no significant deterioration in porosity with depth, indicating the potential for high deliverability reservoirs in the deeper underlying Jurassic formations. The technical findings from Perseverance-1 well thus support a forward programme focused on deeper Jurassic horizons.

As such, the Company has initiated a farm-out process to seek a suitable partner for the next phase of activity in The Bahamas. In parallel, in March 2021 the Company notified the then Government of The Bahamas of its intent to renew the four southern licences into a third 3-year exploration period. A new Government was elected in The Bahamas in September 2021, and the Company is engaging with the new administration on the renewal process.