Chariot Ltd (AIM:CHAR, OTC:OIGLF) has been endorsed by house broker Cavendish, following the firm's first half report, with analyst James McCormack highlighting that the AIM-quoted firm is progressing with a clear strategy to demerge its upstream and renewable divisions to unlock unrecognised value.
The analyst highlighted that the move is designed to create two separate investment cases. The upstream oil and gas unit continues to focus on Moroccan licences and is pursuing under-the-radar new ventures that can be financed at the subsidiary level.
Meanwhile, in renewables, McCormack noted Chariot’s role in shaping the electricity trading market in South Africa through Etana Energy, which has secured a US$175.00 million funding package. Wind projects under Etana are approaching financial close, alongside funding discussions with a strategic investor.
Chariot this morning told investors remained debt-free in the period and had a cash balance of US$5.6 million at the 30 June half-year stage after a gross $7.1 million was raised earlier that month.
"We have steered the company through a challenging past few months and I am pleased to report that we have emerged from this period with a new business plan and a clear focus to progress our projects and build shareholder value," chief executive Adonis Pouroulis said.
He said the process of building out the two standalone business units is continuing, with management currently "setting out the future of both entities as we look to grow and deliver.
Chariot also noted that the company regained 75% operatorship of its offshore Moroccan licences in May and is working with ONHYM on a scaled-back Anchois gas development.
Farm-out processes and exploration work are ongoing across the Lixus, Rissana, and Loukos licences.
In the renewable business, Etana Energy, the electricity trading business in South Africa, is now fully financed following a $155 million guarantee financing facility and up to $20 million in equity funding.
Multiple renewable energy projects are advancing across South Africa, Zambia and Zimbabwe, and Chariot sold its 10% stake in Burkina Faso’s Essakane solar project for $167,000.
Elsewhere, Chariot noted good performance from its Djibouti desalination project and continued progress on its green hydrogen initiatives in Mauritania and Morocco.
Pouroulis added: "Our overarching objective is to create two separate groups to realise more value for shareholders going forward and we are evaluating a range of opportunities and avenues in this regard. We remain committed and ambitious in our plans and we look forward to executing these over the coming months."