Peel Hunt repeated its ‘buy’ recommendation and 15p price target for shares in Chariot Ltd (AIM:CHAR, OTC:OIGLF), which is kicking work offshore Morocco after the arrival of a drilling platform.
Chariot's work will focus on two wells appraisal and exploration of Anchois 2 on the Lixus concession and the re-entry of Anchois 1.
The broker’s current published risked and un-risked valuations for Anchois are 23p and 94p, “indicating the potential prize on offer in the event of full commercial exploitation” of the circa 360bn cubic feet of gas contingent gas resource.
Both the price target and the risked and unrisked valuations suggest significant upside from the current 7.24p share price.
Earlier, Chariot’s acting chief executive, Adonis Pouroulis, called the drilling programme ‘potentially transformational’.
It will update separately after the completion of each operation, investors were told.
Chariot owns 75% of the licence for the offshore area on which the two wells sit. The Morocco hydrocarbons ministry ONHYM holds a 25% interest.