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Chariot Oil & Gas backs out of Nambia exploration blocks

"The focus for Chariot is the delivery of transformational value through the discovery of material hydrocarbon accumulations,” said Larry Bottomley, Chariot chief executive.
oil and gas operations
Chariot can still take up a 10% interest in the assets, at its own discretion

Chariot Oil & Gas Limited (LON:CHAR) has decided not to proceed into the first renewal period for Namibia blocks 2714A and 2714B, otherwise known as the Southern Blocks.

It means that the explorer foregoes its 85% stake in the exploration area in the Atlantic Margin, albeit the company has made an agreement for a ‘back-in’ for a 10% interest in the blocks.

Chariot can exercise its option at its own discretion for no consideration, following the drilling of the first exploration well in each licence.

READ: Chariot Oil & Gas looking at ‘value-accretive’ opportunities

The decision comes after Chariot couldn’t reach a farm-out deal to bring a partner into the project, and it was described as being in line with its risk management strategy.

"The focus for Chariot is the delivery of transformational value through the discovery of material hydrocarbon accumulations,” said Larry Bottomley, Chariot chief executive in a statement.

“While it is clearly disappointing that we were unable to attract a partner on the Southern Blocks in the current environment, it is important that the company maintain discipline in the management of risk and the allocation of capital.

“NAMCOR has requested that Chariot remain engaged in the partnering process through a zero cost option to back-in after exploration drilling in recognition of the depth of understanding of the Chariot team of these licences and the quality of technical work performed.”

READ: Chariot on fire after identifying new prospects offshore Namibia

In late afternoon trading, Chariot shares were nearly 18%, or 2.12p lower at 9.75p.

 -- Adds share price --

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