Challenger Energy Group plc Acquisition an Update Letter to Shareholders

Core Insights - Sintana Energy, Inc. has reached a milestone in its proposed all-share acquisition of Challenger Energy Group plc, with a Scheme Document published for Challenger shareholders [1] - The acquisition is driven by three key factors: diversification, exposure to emerging geographies, and the opportunity to expand partnerships [4] Diversification - The acquisition aims to diversify Sintana's portfolio, particularly important given the risks associated with being singularly exposed to one environment [5] - The company has experienced significant progress in Namibia, which serves as a model for potential success in other regions [5] Geographic Expansion - The acquisition provides exposure to Uruguay's offshore licenses, which have seen increased interest from major players like Shell and Chevron, indicating strong commercial potential [6] - The South Atlantic conjugate margin is highlighted as a region with significant geological and commercial potential, similar to Sintana's experiences in Namibia [6] Partnership Enhancement - The acquisition will deepen Sintana's existing partnership with Chevron, which has expanded its activities in Namibia and is now looking to increase its presence in Uruguay [7] - This partnership is seen as a unique opportunity to enhance collaboration with a major player in the industry [8] Transaction Process - The timing of the acquisition is influenced by the complexities of navigating UK takeover laws and the concurrent AIM listing process for Sintana, expected to be completed by the end of Q4 2025 [9] - A special committee was formed to ensure independence in the acquisition process, with external counsel involved to oversee the proceedings [10][11] Shareholder Interests - Charlestown, a significant shareholder, holds approximately 21 million shares of Sintana, representing about 5.7% of the outstanding shares, and has committed a US$4 million working capital facility for the combined company [12][13] - The total exposure of Charlestown to Sintana and Challenger is noted to be over C$20 million [13] Regulatory Compliance - The transaction adheres to Canadian securities regulations, with a detailed analysis conducted to determine the necessity of a shareholder vote [15] - The company emphasizes its commitment to regulatory compliance and shareholder protection throughout the acquisition process [16]