Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Chariot Oil and Gas - Capital Network: Large-cap Portfolio with Small-cap Leveraged Upside

Chariot Oil & Gas (LON:CHAR) is a UK-based oil and gas exploration company listed on the AIM market of the London Stock Exchange. The company has assembled a very prospective portfolio of assets located on both sides of the Atlantic in West Africa and South America, and has carried out the necessary adjustments to weather the commodity downturn, reducing staff from 22 to 12 and cutting G&A to less than US$5M. With a US$22M cash position significantly exceeding commitments, and no debt, Chariot Oil&Gas (LON:CHAR) is now in a position to drill three company-making wells in Morocco and Namibia in the near-term. Chariot Oil & Gas (LON:CHAR) intends to remain an exploration company, returning value to shareholders from the proceeds of the divestment of future discoveries at the point of maximum monetisation potential. We believe this is an opportune time for potential investors to revisit the equity story.
Chariot Oil and Gas - Capital Network: Large-cap Portfolio with Small-cap Leveraged Upside

We understand from the company that, in the success case, the cash breakeven oil price for most of their targets would be US$20-25 /bbl which we reckon would place them in a favourable position on the global oil projects cash costs curve.

As such, Chariot would be able to easily monetise any potential discovery in the portfolio. However, for the purpose of this note we have not run our own economic analysis.

Full report is available via Capital Network website
View full CHAR profile View Profile

Chariot Oil and Gas Timeline

Related Researches

no_picture_pai.jpg
March 05 2018

G3 Exploration (LON:G3E), previously Green Dragon Gas, published an operational update for its Baotian-Qingshan (GGZ) Block, located in the Guizhou Province of Southern China.

no_picture_pai.jpg
August 01 2017

Green Dragon Gas (GDG) announced that the China National Development and Reform Commission (NDRC) has approved a Project Code for the Overall Development Plan (ODP) on the Greka Shizhuang South Zaoyuan portion of the Main Block (GSS), concluding that the ODP does not require an approval process and only needs to be registered. Management reckon this approval will shortens the time to large-scale commercial gas production from the GSS Block. We note that this announcement follows the recent approval (18.4.17) of the ODP on the GCZ Block. Both GSS and GCZ Blocks were specifically mentioned within China's 13th Five-Year Plan as being critical to domestic production requirements, and the latest approvals demonstrate the Chinese Government commitment to fulfilling this ambition. We see the next catalyst for the stock as the probable approval of an ODP for the GGZ Block in 2017.

The development program on GSS would add 42 vertical and 47 LiFaBriC wells by 2020 for a net investment of US$49.2m by GDG which has a 60% participating interest in this block with its 40% partner, China United Coalbed Methane Corp (CUCBM), a wholly owned subsidiary of China National Offshore Oil Corporation (CNOOC). This would come in addition of the already approved and more material development program on GCZ which would add 147 wells by end 2018.

Our valuation of GDG at 221p per share, based on a risked valuation of 2P reserves and adjusted for Net debt/cash and capitalised corporate costs, is unchanged. However, the approval of a second ODP this year should increase investors’ confidence in the quality of GDG’s assets and in the company’s ability to realise this valuation (Figure 1).

no_picture_pai.jpg
July 27 2017

The nanomaterials market is transitioning from a concept technology to commercial applications. Haydale (LON:HAYD) specialises in the integration of nanomaterials into commercial and industrial technologies. We argue that this is a good position to occupy within the value chain – exposed to end market growth but not exposed (negatively) to the likely future price compression in raw graphene or other nanomaterials.

Major applications for Haydale (LON:HAYD) include composite materials, specialty inks and coatings, and additive manufacturing (3D printing). The nanomaterials are graphene and silicon carbide, and potential others in future. We argue that these applications have now reached a tipping point from research to commercial reality (see pie charts p2).

In the trading update of July 19th, Haydale (LON:HAYD) announced that FY June 2017 total income (revenue and other) has doubled, meaning about £3.9m for the year. Based on the order backlog, and major projects under way, we expect further strong growth in the next few years. We consider two of the specific channels for further growth.

In November 2016 Haydale announced a Joint Development Agreement with Huntsman Corporation to develop graphene enhanced resins. Adding small amounts of graphene in the resin layers of materials like carbon fibre can dramatically improve (x10) the dissipation of electrical charge (aerospace applications) and heat (aeros and autos). The deal with Huntsman potentially dramatically accelerates Haydale’s penetration of this market.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use