Chariot Ltd (AIM:CHAR, OTC:OIGLF) has inked a partnership with Energean PLC (LSE:ENOG) for the Anchois gas development with the FTSE-250 gas producer providing funding for the development potentially through to ‘first gas’.
The deal also sees Chariot receive a series of cash payments, subject to project milestones.
Energean is acquiring a 45% interest in the Lixus licence which hosts Anchois and 37.5% of the Rissana licence – with Chariot subsequently retaining 30% and 37.5% respectively.
Chariot will receive US$10 million upfront upon completion of the transaction, followed by a further US$15 million upon final investment decision.
Energean meanwhile commits to some US$85 million of gross carry of project costs – covering all Lixus costs, including expenditure for an additional Anchois well, plus the cost of a seismic exploration programme on Rissana (capped at US$7 million).
The new partner also gets the right to acquire another 10% of the Lixus licence. To execute, it will cost Energean a US$850 million gross carry of project development to first gas plus a US$50 million loan (via a 5-year zero coupon convertible note), and royalty payments.
"In Energean, we have secured a partner with a proven track record of rapidly building and delivering this kind of offshore development,” Chariot chief executive Adonis Pouroulis said in a statement.
“Energean also shares our view that Anchois and its surrounding acreage offers significant upside potential and we are aligned with our plans moving forward.
“The new partnership is a key step in bringing the development of the Anchois field to reality and we are looking forward to continuing the extensive work undertaken so far to reach Final Investment Decision."
Pouroulis added: “We are excited about the next phase of drilling which has the potential to both unlock significant additional resources and upsize the production profile.
“It is intended that this well will be used as a producer well when development commences.
“We retain a material stake in this basin opening opportunity where both parties are keen to optimise the project's fundamentals, enable expansion and undertake further exploration.”
Mathios Rigas, Energean chief executive, meanwhile, added: “This is an exciting step in the next stage of our development, one that can only enhance our position as the pre-eminent independent natural gas producer listed in London.
“These assets are particularly attractive as we understand the core geological, commercial and political drivers of the region, we have a track record in developing material gas resources prioritised for the domestic market and they are a complementary fit with our broader portfolio, not least the potential for surplus supply to other markets.”