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Chariot Oil & Gas highlights balance across portfolio as it advances Morocco development project

“Our cash position substantially exceeds our commitments and, with the significant interest received in our data rooms, we are confident about our ability to achieve on our near-term goals in Morocco.”

Chariot Oil and Gas plc - Chariot Oil & Gas highlights balance across portfolio as it advances Morocco development project
Lixus brought a near-term development opportunity with built-in upside

Chariot Oil & Gas Limited (LON:CHAR) chief executive Larry Bottomley, in the explorer’s half-yearly results statement, highlighted that it now has a balanced portfolio with “a commercially attractive production opportunity” alongside its “giant potential prospects”.

It was a strategically important first half for Chariot as it moved to acquire the Lixus project, offshore Morocco, in the wake of separate exploration drilling results that did not deliver a viable discovery.

“Using the information acquired from the 2018 drilling campaigns we have not only been able to de-risk and refine our giant prospect portfolio, but also identified and acquired a low risk appraisal asset with the capacity to generate significant cash flow for the company,” Bottomley said.

He added: “Our cash position substantially exceeds our commitments and, with the significant interest received in our data rooms, we are confident about our ability to achieve on our near-term goals in Morocco.”

The Lixus licence is host to the ‘low risk’ Anchois gas discovery which offers a near term development opportunity with built-in upside via a series of nearby ‘satellite’ gas resources and recently defined exploration targets.

READ: Chariot Oil & Gas reveals shows 2 TCF worth of gas resources offshore Morocco

A competent persons report, released earlier this month, detailed multi-TCF gas potential – with 1 trillion cubic feet of recoverable gas seen at Anchois, plus 308bn cubic feet at the Anchois North ‘priority’ satellite and some 1.2 trillion cubic feet of prospective resources in the other on-block prospects.

Chariot noted today that a development feasibility study and gas market assessment has been completed for the Anchois gas field. The former confirmed it is technically feasible as either a single phase or multi-phase project to optimise access to different parts of the gas market, while the latter defined a ‘fast-growing energy market with strong gas prices’.

The company has begun an environmental impact assessment (EIA) for a drill campaign and it has also opened a data-room so that potential farm-out partners can evaluate the opportunity further.

Similarly, farm-out efforts continue for the group’s high-impact exploration opportunities elsewhere in Morocco and Brazil.

Chariot continues desktop work to evaluate its Namibia acreage whilst integrating the findings of the Prospect S well (drilled in late 2018). It also highlighted that other operators are due to drilled offshore Namibia in 2020, including one in a block adjacent to Chariot’s.

Bottomley highlighted: “we remain vigilant to further new venture opportunities that can further de-risk the portfolio whilst also looking to secure additional partners to deliver wells in a fast follower position on our Namibian and Brazilian assets."

In terms of the financial results, the pre-revenue explorer reported a US$1.86mln loss before tax for the six month period.

At the end of June it had US$12.13mln of cash and equivalents and was debt free. Chariot noted that all its licence work commitments, totalling less than US$1mln, were fully-funded.

Quick facts: Chariot Oil and Gas plc

Price: 1.5 GBX

AIM:CHAR
Market: AIM
Market Cap: £5.51 m
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Full interview: Chariot Oil & Gas reports more than 2 TCF of gas at Morocco...

Chariot Oil & Gas Limited's (LON:CHAR) Larry Bottomley discusses with Proactive London's Andrew Scott the results of a new third-party assessment of the recently acquired Lixus project area offshore Morocco. Five additional exploration prospects present more than 1.2trn cubic feet (TCF)...

on 18/9/19

3 min read