Lse.co.uk
Chariot Oil & Gas Ltd on Thursday said it will enter 2017 debt free and with USD25.0 million in cash to pursue new opportunities while progressing its projects in Morocco, Namibia and Brazil, as it published its pre-close statement for 2016.
Chariot shares were trading down 11% on Thursday morning at 8.34 pence per share.
“We have made significant progress throughout the year, proactively pursuing our exploration programmes, completing another farm-out, maturing our current portfolio and securing further prospective acreage in line with our strategy of rigorous portfolio management and capital discipline,” said Chief Executive Larry Bottomley.
“As we reported at the time of our interim results, we are now focused on delivering three exploration wells in the next two years. We expect the tough market conditions to continue into the next year, but Chariot has established a strong position within this environment which will allow us to deliver on our plans,” he added.
In Morocco, Chariot struck a deal to bring Italian giant Eni into the Rabat Deep offshore exploration permits and is currently waiting for government approval before transferring the role of operator to its new partner. Once formally completed, Eni will have to pay Chariot for back costs incurred on the asset, helping to further strengthen the cash balance in the near future.
“The Rabat Deep partnership will be drilling the JP-1 prospect with the RD-1 well and drilling is now expected to occur in early 2018. This prospect has audited gross mean prospective resources of 768 million barrels, which will be transformational to the company in the success case,” said Chariot.
Chariot also was awarded the Mohammedia exploration projects also offshore Morocco this year, taking a 75% stake and operating the asset, which is adjacent to Rabat Deep.
“The plays in Mohammedia have the potential to be significantly de-risked by the drilling of the RD-1 well. The team has identified material prospectivity in the JP-2 prospect and other prospects in the shallower Lower Cretaceous play which have a combined gross mean prospective resource in the region of 1 billion barrels,” said Chariot.
Chariot will be acquiring 3D seismic in the early part of next year to investigate the extension of the Lower Cretaceous play into a region with no current seismic coverage.
Offshore Namibia, Chariot acquired 2,600 kilometres of 3D seismic data over the Central Blocks and that is now being interpreted, after which it will embark on a hunt for a partner to help progress and fund the development, should it be pursued.
Chariot is already in the process of sourcing a partner for the Southern Blocks offshore Namibia. A data room for interested parties is open and includes the newly discovered AO-1 and AO-2 prospects, hopefully helping to attract more interest. The gross mean prospective resource of the two prospects currently stands at 8.1 trillion cubic feet and 2.2 trillion cubic feet of gas, respectively.
Lastly, in Brazil, 3D data over a 775 kilometres squared area covering the four concessions held by the company is also being analysed, helping to define reservoir distribution and identifying key prospects in light of the upcoming third party exploration programmes within the Barreinhas region.
Chariot, in a recurring theme across its portfolio of assets as it attempts to share the cost burden of its multiple developments, will begin looking for a partner in Brazil during the second half of 2017, it said.
“The company continues to evaluate new venture opportunities to further enhance the portfolio through the addition of value accretive assets,” Chariot said.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
