The board of directors of each of Sintana and Challenger Energy Company Plc (LON:CEG) have announced that they have reached agreement on the terms of a recommended all share offer pursuant to which Sintana will acquire the entire issued and to be issued ordinary share capital of Challenger. The Acquisition is intended to be effected by means of a scheme of arrangement under Part IV (sections 152 to 154) of the Isle of Man Companies Act 1931.
· Under the terms of the Acquisition, Challenger Shareholders shall be entitled to receive:
for each Challenger Share: 0.4705 New Sintana Shares
· Under the terms of the Acquisition, Challenger Shareholders will, in aggregate, receive approximately 126,732,056 New Sintana Shares. Immediately following completion of the Acquisition, it is expected that Challenger Shareholders will own approximately 25 per cent. of the issued share capital of the Combined Group (based on the existing issued common share capital of Sintana and the fully diluted ordinary share capital of Challenger as at 8 October 2025 (being the latest practicable date prior to the date of this announcement).
· Based upon the Closing Price of C$0.66 for each Sintana Share and the £/C$ exchange rate of 1.87 as at the Latest Practicable Date, the Acquisition represents an implied value of 16.61 pence per Challenger Share (approximately C$0.31 per Challenger Share), valuing the entire issued and to be issued share capital of Challenger at approximately £45 million (approximately C$84 million) on a fully diluted basis.
· The terms of the Acquisition represent a premium of approximately:
o 44 per cent. to the Closing Price of 11.50 pence per each Challenger Share on the Latest Practicable Date;
o 97 per cent. to the volume weighted average price of 8.41 pence per each Challenger Share for the three-month period ended on the Latest Practicable Date; and
o 96 per cent. to the volume weighted average price of 8.48 pence per each Challenger Share for the six-month period ended on the Latest Practicable Date.
· The board of directors of each of Sintana and Challenger are also pleased to note that, in total, Challenger Shareholders (including those Independent Challenger Directors who hold Challenger Shares) representing 34.20 per cent. of Challenger’s issued ordinary share capital as at the Latest Practicable Date are supportive of the Acquisition and have each entered into irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting.
· Sintana intends to seek for the Sintana Shares (including the New Sintana Shares) to be admitted to trading on AIM as close as practicable to the Scheme becoming Effective, in addition to continuing to trade on the TSXV in Canada and the OTCQX in the United States. Consequently, it is intended that Challenger Shareholders will be able to hold New Sintana Shares which will be quoted on, and trade them via, AIM.
Strategic rationale for the Acquisition
Sintana is a TSXV-quoted oil and gas exploration company with a primary portfolio of assets in Namibia, including a 4.9% indirect interest in the Mopane discoveries (PEL 83), which were announced in 2024 by the operator, Galp, as well as indirect interests in four other Namibian offshore blocks and one Namibian onshore block. Sintana has also entered into a heads of terms which provides for the acquisition of a 5% indirect interest in KON-16 in Angola’s Kwanza Basin and Sintana has a legacy holding in an exploration licence in Colombia. Sintana is also quoted on the OTCQX exchange in the USA.
Challenger is an AIM-quoted oil and gas exploration company focused on offshore Uruguay, holding interests in two blocks: AREA OFF-1 (40% working interest, Chevron holds a 60% working interest and is the operator) and AREA OFF-3 (100% working interest and operator). Challenger is the only “junior” with a significant offshore position in Uruguay and the broader region, and also holds legacy assets in The Bahamas. Challenger is also quoted on of OTCQB exchange in the USA.
The Boards of Sintana and Challenger believe that a combination of the two companies will create an Atlantic-margin focussed oil and gas exploration “champion”, which will benefit from:
· a diversified portfolio of high-impact assets in multiple jurisdictions and basins;
· complementary technical, operational, financial and risk management strategies; and
· increased scale which will enhance opportunities to deploy combined expertise in oil and gas projects, attract increased investor interest, and generate returns to shareholders.
Recommendation
· The Independent Challenger Directors, who have been so advised by Gneiss as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Independent Challenger Directors, Gneiss has taken into account the commercial assessments of the Independent Challenger Directors. Gneiss is providing independent financial advice to the Independent Challenger Directors for the purposes of Rule 3 of the Code.
· As required by, and solely for the purposes of, Rule 16.1 of the Code, Gneiss has (in its capacity as independent adviser to Challenger for the purposes of Rule 3 of the Code) advised the Independent Challenger Directors that the terms of the Loan Agreement are on market terms and are fair and reasonable as far as the independent Challenger Shareholders are concerned.
· Accordingly, the Independent Challenger Directors intend to recommend unanimously that Challenger Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting as the Independent Challenger Directors have irrevocably undertaken to do in respect of their own beneficial holdings of 18,077,719 Challenger Shares representing, in aggregate, approximately 7.25 per cent. of the ordinary share capital of Challenger in issue on the Latest Practicable Date.
Irrevocable undertakings
· As noted above, Sintana has received irrevocable undertakings from each of the Independent Challenger Directors who hold Challenger Shares to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, in respect of a total of 18,077,719 Challenger Shares, representing approximately 7.25 per cent. of the existing issued ordinary share capital of Challenger on the Latest Practicable Date.
· In addition, Sintana has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting from Challenger Shareholders in respect of a total of 67,189,951 Challenger Shares representing, in aggregate, approximately 26.95 per cent. of Challenger’s existing issued ordinary share capital on the Latest Practicable Date.
· Sintana has therefore received irrevocable undertakings in respect of a total of 85,267,670 Challenger Shares representing, in aggregate, approximately 34.20 per cent. of Challenger’s ordinary share capital in issue on the Latest Practicable Date.
Sintana AIM admission
· As part of the Acquisition, Sintana intends to seek admission of the Sintana Shares (including the New Sintana Shares) to trading on AIM in Q4 2025. Sintana will now commence the process of obtaining such admission, including the publication of an admission document. Obtaining the Dual Listing is not a condition to the Scheme.
Timetable and Conditions
· It is intended that the Acquisition will be implemented by way of a scheme of arrangement between Challenger and Challenger Shareholders under Part IV (sections 152 to 154) of the Companies Act although Sintana reserves the right to implement the Acquisition by way of a Takeover Offer, subject to obtaining the Panel’s consent, the terms of the Cooperation Agreement and compliance with the Code.
· The Acquisition is conditional upon, amongst other things, the approval of the requisite majority of Challenger Shareholders at the Court Meeting and at the General Meeting. In order to become Effective, the Scheme must be approved by a majority in number of the Scheme Shareholders present and voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares held by those Scheme Shareholders present and voting. In addition, a special resolution implementing the Scheme must be passed by Challenger Shareholders representing at least 75 per cent. of votes cast at the General Meeting. Following the Court Meeting, the Scheme must also be sanctioned by the Court. Following this, an office copy of the Court Order must be delivered to the Companies Registry for registration, and upon the registration of the office copy of the Court Order, the Scheme will become Effective.
· The Acquisition is also subject to the Conditions and terms set out in Appendix I to this announcement, including, amongst other things:
o the receipt of conditional approval of the Acquisition by the TSXV;
o the receipt of conditional approval of Admission by the TSXV, if applicable;
o ANCAP having provided its written consent to the Acquisition under the terms of the ANCAP Licences, in a form and subject to conditions (if any) that are reasonably satisfactory to ANCAP; and
o an exempt transaction notice having been made and accepted (or otherwise not objected to) by Chevron under the terms of the Chevron JOA.
· Given the material importance of Challenger’s assets in the context of the Acquisition, and the ANCAP Consent in that regard, Challenger Shareholders should be aware that, if the ANCAP Condition is not satisfied, it would be Sintana’s intention to seek the Panel’s consent to invoke the ANCAP Condition to cause the Acquisition to lapse.
· Subject to the satisfaction or (where applicable) waiver of the Conditions, the Acquisition is expected to become Effective before the end of Q4 2025.
· The Scheme Document, containing further information about the Acquisition and the Scheme and notices of the Court Meeting and the General Meeting, will be distributed to Challenger Shareholders (along with the Forms of Proxy for use in connection with the Court Meeting and the General Meeting) as soon as reasonably practicable and within 28 days of this announcement. The Scheme Document will also be made available by Challenger on its website at https://www.cegplc.com/documents-disclaimer/.
Commenting on the Acquisition, Iain McKendrick, Chairman of Challenger Energy, said:
This recommended merger fulfils all the strategic intentions of Challenger, creating an entity with a diversified and very high-graded portfolio, and which will be a springboard to further excellent returns for both sets of shareholders.
Commenting on the Acquisition, Robert Bose, Chief Executive Officer and Director of Sintana, said:
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 and exploration assets creates a market leader positioned to deliver significant success.
This summary should be read in conjunction with the full text of this announcement. The Acquisition shall be subject to the Conditions and further terms set out in Appendix I to this announcement and to the full terms and conditions which shall be set out in the Scheme Document. Appendix II to this announcement contains the sources of information and bases of calculations of certain information contained in this announcement, Appendix III contains a summary of the irrevocable undertakings received in relation to this Acquisition and Appendix IV contains definitions of certain expressions used in this summary and in this announcement.
This announcement contains inside information as defined in the Market Abuse Regulation. Upon the publication of this announcement via a Regulatory Information Service, such inside information will be considered to be in the public domain. The person responsible for making this announcement on behalf of Challenger is Eytan Uliel, Chief Executive Officer and the person responsible for making this announcement on behalf of Sintana is Robert Bose, Chief Executive Officer.
Investor presentation
An investor presentation covering the Acquisition will be made available on each of Challenger Energy’s and Sintana’s websites later today.
