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Challenger Energy (AMEX:CHQ) just agreed to a financing that will see $26 million added to the treasury through the issuance of 6,521,800 Units at a price of $4.00 per unit. Each unit will be comprised of one common share and one-half of one common share purchase warrant exercisable for a period of 24 months following the closing of the offering at a price of $4.40 per common share purchase warrant.

Challenger Energy will use the net proceeds of the offering for its ongoing exploration program and activities offshore Trinidad and Tobago. Fully funded, Challenger is in great shape to meet its financial obligations for 2008.

Challenger Energy Corp., paying 33.3% of exploration costs for a 25% working interest on Intrepid Block 5(c) in partnership with Canadian Superior Energy (AMEX:SNG) and BG International Ltd. [LSE:BG.L], saw its stock take off in the right direction on January 13 on news of a large well discovery 60 miles off the coast of Trinidad.

Challenger’s stock rose 34% to close the day at CA$3.35, while Canadian Superior’s stock rose 24% to close at CA$3.80.

Challenger is a Calgary, Alberta, Canada based oil and gas exploration company focused on “high impact” oil and gas plays offshore Trinidad and Tobago and offshore Nova Scotia. Canadian Superior, on the other hand has operations in western Canada, offshore Nova Scotia, as well as its Trinidad and Tobago interests.

Speaking in Calgary, Craig McKenzie, Canadian Superior's Chief Executive Officer, said," The 'Victory' well has an estimated flowing rate of over 100 mmscf/d of natural gas and is condensate rich. We have just completed the extended flow testing of the first zone to be tested in the well which was flowed on a restricted flow basis with high pressures and flowed with measured flow rates averaging between 40 and 45 mmscf/d. The well also tested high gravity condensate of approximately 30 bbl per mmscf of gas produced. The flowing wellhead pressure on a restricted basis and bottom hole pressures are comparable or better than other producing wells and fields in the immediate area. Further analysis of the initial test results will be conducted on the information we have received and we will now focus on the next stage of the testing program by moving up hole to complete at least one more zone in the well before moving the rig to our next prospect on Block 5(c) and spudding the 'Bounty' well. This information will allow Canadian Superior and the other participants in the well to move forward with detailed reserve analysis of the discovered resource."

The discovery comes on the heels of the successful flow-testing of the Victory well in the same area, which averaged between 40 and 45 mmscf/d on a restricted flow basis with high pressures. The well also tested high gravity condensate of approximately 30 bbl per mmscf of gas produced.

Further analysis of the initial test results and well information will be conducted in order for reserve estimation of the discovered resource. The “Victory” well is located approximately 3 miles from a tie-in to a pipeline to shore. After work is completed on the “Victory” well, the rig will move to the next prospect on Block 5(c) and spud the “Bounty” well.

A Kan Tan IV semi-submersible drilling rig drilling the wells is operated by Maersk Contractors and owned by SINOPEC has been contracted by Canadian Superior to drill a multi-well program of three (3) back-to-back exploration wells, "Victory", "Bounty" and "Endeavour" on the "Intrepid Block 5(c) located approximately 60 miles off the east coast of the island of Trinidad.

To investors, this means Challenger has a 25% working interest spread among roughly 32 million common shares, while Canadian Superior retains a 45% working interest over 133 million commons shares. Challenger essentially delivers double the upside exposure compared to Canadian Superior, but Canadian Superior investor are better protected against downside risk by virtue of a more valuable producing portfolio of other projects.

The petrochemical sector in Trinidad and Tobago, including methanol, ammonia, urea, and liquefied natural gas, has continued to grow and has experienced a new burst of activity with the resumption of fullscale production of all existing facilities.

Natural gas production continues to expand and should meet the needs of the many industrial plants coming on stream in the next 3 years.

Trinidad and Tobago is the 5th largest exporter of liquefied natural gas in the world. The expansion of the Atlantic LNG over the next 4 years could create the largest-single sustained phase of economic growth in Trinidad and Tobago. It has become the leading exporter of LNG to the United States, and now supplies some 65% of U.S. LNG imports.

Trinidad and Tobago is experiencing a transition from an oil-based economy to a natural gas based economy. In 2002, production of natural gas averaged 1,826 million ft³ (52 million m³) per day representing an increase of 14.4% over output in 2001. Atlantic LNG consumes 47% of total natural gas production. As a whole the energy sector set a record growth rate of 9.5% in 2003. In 2002 the petrochemical sector accounted for 20.2% of central government revenue.

Source: Challenger Energy Raises $26M for Intrepid