TIDMCHAR
RNS Number : 7104P
Chariot Limited
22 June 2022
22 June 2022
Chariot Limited
("Chariot" or the "Company")
2021 Final Results
Chariot (AIM: CHAR), the Africa focused transitional energy
company, today announces its audited final results for the year
ended 31 December 2021.
Transitional Gas:
Anchois Gas Development Project
-- Successful drilling campaign of the Anchois-2 well, completed
safely, on time and on budget delivering a significant gas
discovery.
-- An accelerated field development plan underway as the Company
looks to progress the front end engineering design ("FEED"), ahead
of the final investment decision ("FID").
-- Discovery exceeded expectations: 150m net pay confirmed
across seven reservoirs, excellent quality and consistent dry gas
composition which should enable a simple development.
-- MoU on gas offtake and partnering signed with a leading international energy group
-- Societe Generale appointed as financial advisor to lead the project financing.
-- Collaboration / FEED agreement in place with Subsea
Integration Alliance to progress the front-end design, engineering,
procurement, construction, installation and operation of the
development project.
-- Management focussed on progressing towards material cashflows as quickly as possible.
Material upside potential:
-- The drilling campaign also directly de-risked a material
portfolio of prospects within the Lixus licence area.
-- The Rissana Offshore Licence, Morocco was signed in February
2022 which surrounds the Lixus acreage and captures gas play
extensions from the Anchois wells.
-- Potential for multi Trillion Cubic Feet ("TCF") volumes in deeper plays.
Transitional Power
Renewable Energy for Mining Projects
-- Acquisition of AEMP completed in Q2 2021 with the AEMP team
now fully integrated within Chariot's Transitional Power
business.
-- Projects are developed in strategic partnership with Total
Eren, a global renewable IPP focused on low-risk mining power
projects in Africa.
-- The partnership was extended in January 2022 to cover a three
year period, with an option to extend for a further two years
thereafter. Chariot has the right to invest between 15-49% into the
co-developed projects.
-- This partnership is building up a pipeline of African mining
power projects and looking to collaborate on other non-mining
energy projects and transactions across the continent.
-- First project in operation, a 15MW solar project, at the
Essakane gold mine in Burkina Faso, successfully generating
material returns.
-- Two more projects signed in the post-period and in development:
o An MoU signed for a 40MW solar PV project with Tharisa Plc, to
provide power to its chrome and PGM operations in South Africa.
o Partnership in place with First Quantum Minerals to advance
the development of a 430 MW solar and wind power project for its
copper mining operations in Zambia - one of the largest renewable
private sector energy projects in Africa.
Green Hydrogen - Project Nour
-- Exclusivity awarded over licences to develop a large scale
green hydrogen project utilising renewable power to split water
through electrolysis.
-- Recent Pre-Feasibility Study confirms that Mauritania is
exceptionally well-placed for green hydrogen production due to its
unique solar and wind resources and the project has the potential
to produce some of the cheapest hydrogen in the world.
-- Domestic benefits for Mauritania include providing baseload
power to the national grid, diversifying industrial activities
(e.g. green steel), promoting job creation and developing local
infrastructure with the potential to have a significant impact on
GDP.
-- Framework Agreement in place which defines the terms and
guiding principles to pave the way for the in-depth feasibility
study that will be undertaken over the next 24 months .
-- Optimising project fundamentals through reducing acreage
position to 5,000km(2) therefore allowing for a more focused
scope
-- MoU signed with the Port of Rotterdam International, a global
energy hub and Europe's largest seaport which represents a first
step towards establishing supply chains.
-- Partnering process underway with the objective to form a world class consortium.
Other licences
-- Whilst fully written down, Chariot has retained its interest
in its licences in Brazil with no work commitments going forward
and will host datarooms for interested parties as required.
-- The Central Blocks in Namibia have expired but Chariot
retains a 10% back in right in the Southern Blocks as a low risk
future option.
Corporate
-- Further to the successful equity fundraising of US$25.5m and
$4 million Open Offer announced in June 2022, the Company is well
financed to take the Anchois Gas Project through to FEED and FID,
in addition to progressing the Company's wider asset portfolio.
-- Oversubscribed equity fundraising completed in December 2021.
o Year end cash position as at 31 December 2021 of $19.4 million
with no debt and minimal remaining work commitments.
-- Senior leadership team fully aligned with shareholders, with
the Board owning 9.57% of the shares in issue following June 2022
fundraising.
Outlook
Chariot is focused on:
-- Delivering prompt FID on the Anchois gas development
-- Progressing towards production and material cashflows from Anchois as quickly as possible.
-- Strategic partnering in Morocco to accelerate growth from a
portfolio of high value, low risk upsides
-- Further development of the pipeline of Transitional Power projects.
-- Evaluation of further value-accretive new ventures in line
with the Company's focus on the theme of energy transition.
Adonis Pouroulis, Acting CEO of Chariot commented:
"During what has been a turbulent macro environment since the
onset of the COVID-19 pandemic, I am very proud of the progress we
have made across the business over the past year, as we continue to
establish our transitional energy platform within Africa. Our
mission is to create value and deliver positive change by investing
in projects that are driving the energy revolution and we are fully
committed to executing our plan. Through progressing and
accelerating our gas development offshore Morocco we are looking to
provide a gas hungry market with domestic supply; through our
renewable power projects we are materially reducing the carbon
emissions of mining operations in Africa and with our acreage in
Mauritania, we are progressing what has the potential to be one of
the world's largest green hydrogen projects and a key source of
green energy in the future .
As a nimble and entrepreneurial team, we will also continue to
leverage our network and utilise our expertise to seek out new
ventures where we can play a key role and that fit within our ethos
and strategy. We are excited about the potential that sits within
our current portfolio, as well as opportunities that the future
holds. We look forward to our ongoing progression and evolution as
a company and we thank our shareholders for their ongoing
support."
Enquiries:
Chariot Limited
Adonis Pouroulis, Acting CEO +44 (0)20 7318
Julian Maurice-Williams, CFO 0450
+44 (0)20 7397
8900
Cenkos Securities Plc (Nomad and Joint Broker)
Derrick Lee, Adam Rae (Corporate Finance)
Peel Hunt LLP (Joint Broker) +44 (0) 20 7894
Richard Crichton, David McKeown 7000
Celicourt Communications (Financial PR) +44 (0)20 8434
Mark Antelme, Jimmy Lea 2754
About Chariot
Chariot is an African focused transitional energy group with two
business streams, Transitional Gas and Transitional Power.
Chariot Transitional Gas is focussed on a high value, low risk
gas development project offshore Morocco with strong ESG
credentials in a fast-growing emerging economy with a clear route
to early monetisation, delivery of free cashflow and material
exploration upside. Chariot Transitional Power, looking to
transform the energy market for mining operations in Africa,
providing a giant largely untapped market with cleaner,
sustainable, and more reliable power.
Chariot is also partnering with the Government of Mauritania on
the potential development of a 10GW green hydrogen project, Project
Nour. The ordinary shares of Chariot Limited are admitted to
trading on the AIM under the symbol 'CHAR'.
CHAIRMAN'S STATEMENT
Chariot's Transition
Chariot's mission is to play a leading role in supporting the
energy transition and since 2020, our focus has been to increase
our project exposure across this sector. We have made significant
strides over the past 12-18 months and so have progressed our own
transition - moving from high risk oil exploration to a broad
portfolio of transitional energy projects that have the potential
to be both transformational for the company and deliver near-term
value for all our stakeholders.
We have substantially expanded our remit and selection of energy
projects. Within our Transitional Gas business, while maintaining
our exploration vision, we are primarily focused on the development
of a material offshore gas discovery in Morocco and are currently
engaging front end engineering design ("FEED") to achieve final
investment decision ("FID") as quickly as possible. Within our
Transitional Power business we have recently signed up two new
multi megawatt renewable energy projects in South Africa and Zambia
in partnership with Total Eren, one of which is the largest private
sector renewable development project on the continent to date. The
pipeline is targeting over 1 GW of traditional renewable projects
by year end and is augmented by the maturation of Project Nour in
Mauritania, a green hydrogen development with world class
potential.
A diversified but thematic portfolio
While our portfolio is diversified both in scale and resource
base, our assets are linked through the themes that underpin our
investment philosophy focused on the energy transition. In
addition, all of our projects are scalable, demonstrably positive
for all stakeholders, and at the same time focus on generating
material returns for our investors.
Access to energy
Access to energy is a universal need, a core pillar of the
global economy, and something which benefits the pan African
population. Our projects are aligned with helping host economies to
achieve their growth and decarbonisation targets. This is a central
tenet for Chariot, behind our remit to take large-scale and
first-mover positions in projects that support the energy
transition and can materially contribute to the energy mix. Our
assets straddle the spectrum with natural gas, renewable power and
green hydrogen interests and all have the potential to provide much
needed and valuable sources of energy supply.
Focused on projects that are highly scalable
All our assets are scalable and have significant upside
potential. The Anchois development hub has a pre-drill resource of
2 TCF, the recent appraisal drilling has derisked a number of large
resource prospects within the wider Lixus licence outlining the
potential for multiple TCF volumes. Within the acreage surrounding
Lixus in the Rissana licence, we have additional running room with
additional giant prospective resources. For our Transitional Power
business, the scale of the Sub Saharan mining sector is both vast
and untapped with the power requirement estimated by the World Bank
to be over 20GW in 2020. Last year our target was to secure a
pipeline of power supply projects of 500MW however, we have now
doubled our scope and target reaching 1GW by the end of 2022. The
hydrogen market is already becoming a key component of the energy
transition with Goldman Sachs estimating a EUR10 trillion market by
2050. While still nascent, we believe hydrogen will be a
foundational energy source of the future and are progressing our
initial project in Mauritania that has the potential to produce
10GW by 2030.
Sustainable energy - helping to meet carbon emission targets
Morocco has ambitious sustainable development targets, currently
aiming for a 45.5% reduction in their greenhouse gas emissions by
2030, as part of their contribution to the Paris Agreement. At the
same time, Morocco's growing economy and increasing demand for
energy is currently supplied by energy imports and coal. The
domestic supply of gas from Chariot's Anchois project can help
provide baseload requirements and could therefore be an important
contributor to rebalancing Morocco's energy mix and assist in
reducing Moroccan emissions going forward.
Mining companies are increasingly focused on reducing their
carbon outputs and have also set out key targets in this regard.
Implementing long term cleaner energy solutions is now high on
operational ESG agendas across the sector. Through partnering with
Chariot and Total Eren to build, finance and operate their energy
solutions, these companies are provided with a renewable,
measurable supply to help enable them to meet their goals.
Green hydrogen also has the potential to supplement and replace
traditional fossil fuels in both power generation and manufacturing
processes, leading to a significant reduction in associated
emissions of greenhouse gases. Hydrogen also has the potential to
stimulate the development of greener primary industry (such as
green steel and green ammonia production) and can lead to
significant, positive long term impacts for Mauritania as well as
the entire global energy transition.
Energy security
Energy security has become a key topic within the current
geopolitical backdrop. The Anchois gas project is expected to
provide a reliable domestic supply which would bolster Morocco's
self-sufficiency and drive further development of its energy
related infrastructure. Chariot's renewable power projects build
bespoke onsite solutions for mining companies, often sited in
locations well away from power grids. Accessing wind and solar
power for use directly on the mine sites removes the dependence on
and need for transportation of carbon heavy fuel to remote
destinations. The development of Project Nour's green hydrogen will
provide baseload power to Mauritania's national grid as well as
opening broader development possibilities. Future demand is also
growing as result, as evidenced by the European Commission recently
quadrupling its 2030 hydrogen target to 75GW by 2030, half of which
will be imported.
Outlook
Chariot's business plan is indicative of our commitment to being
a significant and successful part of the energy transition and we
are proud of our positioning within this dynamic and critical
sector. We remain ambitious with our plans to expand and build on
our achievements to date as we continue to evaluate new ventures
that fit within our strategy. As ever, we are grateful to our
investors, partners, and the local communities we are involved in,
for their support during what was a significant period of change
and growth for us as a business. We look forward to providing
further updates on our exciting pipeline of projects over the
remainder of 2022 and beyond.
George Canjar
Chairman
21 June 2022
Chief Executive Officer's Review
The Energy Transition
Transitional energy is fundamental to the global movement
towards a carbon neutral world. The adoption of cleaner,
sustainable energy is an integral part of achieving net zero goals
and this transition needs to facilitate positive change by reducing
emissions whilst enabling growth and development. This also goes
hand in hand with another important global objective, of providing
access to electricity to all.
We are an African focused transitional energy company. To
deliver on our business strategy, we need to find solutions that
are suitable for purpose within the context of Africa's development
needs both now and over the longer term, within the framework of
overarching climate goals, and importantly driving the energy
transition utilising the continent's natural resources in a fair
and inclusive way.
The opportunities within the African energy gap
Currently there are over 600 million people without access to
electricity in Africa, and the population is expected to roughly
double from around 1.25 billion to approximately 2.5 billion people
in the next 25 years. This establishes a sizeable and growing
market but highlights the stark inequality of those with and
without and, as history has shown, one of the first pillars of
alleviating poverty is to provide affordable power. Every effort
can be aligned to reducing Africa's carbon footprint but within the
continent it is simply impracticable to eradicate emissions
entirely at this point in time. It is also clear that a wide range
of energy sources are needed to enable development and ensure
accessibility for all. Looking to address this energy gap is a real
opportunity however, and we are focused on rebalancing the energy
mix for two reasons - both to meet the development needs of growing
populations, but importantly through doing this, help to accelerate
the transition of Africa's economy towards carbon neutrality and
ability to access cleaner and greener technologies.
Crucially, further adoption of transitional energy sources
should be aligned with an individual country's ambitions to ensure
that each country's resources help meet the needs of its people and
industries in a long term, sustainable way. Through identifying and
developing their resource wealth alongside them we can facilitate
affordable, sustainable energy supplies that can enrich the lives
of many, deliver wide ranging tangible positive impacts and create
value for all stakeholders.
It will take time and significant investment to bridge this
energy gap but this is exactly what Chariot is about and we are
focused on this through our Transitional Gas and Power
businesses.
Transitional Gas:
Our significant Anchois gas discovery offshore Morocco took the
headlines of our successful drilling campaign announced in Q1 2022,
but to have completed this drilling programme on time, safely and
within budget working around the constraints of Covid which
impacted travel and supply chains at the time was a notable
achievement. Our management team and contractors worked tirelessly
on the planning and execution of these activities and I would like
to once again extend my thanks to all involved.
The results of the drilling programme exceeded our expectations,
encountering all appraisal and exploration targets, confirming the
presence of consistent, excellent quality dry gas and enabled
Chariot to report a material upgrade of the net gas pay estimates.
Due to the nature of the gas, the project lends itself to a simple
development, using conventional technology and the campaign also
served to substantially de-risk other targets within the Lixus
licence. We will be announcing independent third party validation
of Anchois resources through a CPR shortly.
In February 2022, we also captured further upside through the
signing of the Rissana licence which surrounds Lixus and has giant
potential due to the gas plays that extend into this acreage. We
are also very pleased to have signed an MoU with a leading
international energy group on gas offtake and partnering.
We are now focused on bringing the Anchois gas project online as
quickly as possible and we have appointed Societe Generale to take
the lead on project financing. We successfully raised US$25.5m via
an oversubscribed Placing and $4m via an Open Offer post period and
we are fast-tracking the engineering and design of the Anchois
development together with Subsea Integration Alliance to reach FID
as quickly as possible so we can start to generate the material
cashflows that we expect from the project.
Transitional Power
Providing Renewable Power in Africa
It has been a pleasure to work with Total Eren, a leading player
in the renewable energy industry since we acquired the AEMP team in
2021. We were pleased to further strengthen our relationship, by
extending our partnership terms for a further three years with an
option for an additional two thereafter. We are also now able to
invest up to 49% in each new project and were delighted to secure
new partnerships with Tharisa and First Quantum in the first half
of this year to develop substantial hybrid power sites for their
operations in South Africa and Zambia. Our focus is to deliver
reliable, low cost power solutions that have a wide range of
positive ESG impacts for both the companies and the communities in
which they operate. Operations from the 15MW solar power plant at
the Essakane mine in Burkina Faso, in which we hold a 10% equity
stake, continue to generate a number of measurable impacts,
including saving 6 million litres of fuel and a reduction of 18,500
in CO(2) emissions per year which exemplifies the proof of concept
and underlines the benefits that can be realised from such
projects. Tapping into these natural resources and attracting this
renewable focused investment is beneficial for the countries as
well as playing a positive part of a company's ESG remit. We are
currently looking at strategic partnering within the Transitional
Power business to provide equity finance directly into these
projects and alongside Total Eren we are looking at other renewable
energy projects across the continent.
Green Hydrogen - a strategic priority
We are delighted to have secured a strategic position in
Mauritania and we now have a foothold in what we believe will be
the next frontier for the energy sector. Our acreage is in a prime
location for both wind and solar power and we believe we have
obtained a critical first mover advantage in Africa. Mauritania is
exceptionally well placed for green hydrogen production which
requires four key characteristics; wind power, solar radiation,
land and water. Mauritania has these in abundance and the scale of
this combination is relatively rare across the globe. As a result,
Project Nour has the potential to become one of largest and lowest
cost producers of green hydrogen in the world. This was recently
confirmed by our Pre-Feasibility Study and a Framework Agreement is
now in place which provides a roadmap for the next phases of
development. As part of the Framework Agreement, we have optimised
our positioning for the project and reduced our acreage position to
5,000km(2) to enable us to focus our efforts, whilst retaining the
potential for 10GW output capacity. We are currently in discussions
with interested parties with a view to forming a world class
consortium to take this project forward. The range of potential
benefits for Mauritania and the region as a whole are extensive and
we are delighted to be partnering with the Government of Mauritania
on this project. We thank the Government of Mauritania for their
continued collaboration and cooperation on Project Nour.
Positive impacts
Another element of the energy transition story is mitigating and
developing resilience to the impacts and challenges of climate
change and investment into the projects that can deliver
significant benefits in this regard. Accessing and sharing power
can help to protect against shortages of water and power supply and
Zambia is a great example with First Quantum's project representing
a natural fit with Zambia's hydropower resource seasonality. This
is also true of the complementary wind and solar resources in
Mauritania, which generate power around the clock, with solar
produced during the day and wind mainly at night. Across all our
projects there are common attributes of the energy that we look to
supply - reliable, affordable sources of power that can help reduce
carbon footprints and also enable diversification of wider
industrial activities and downstream development.
Whilst our projects will produce valuable power for domestic
use, there is also direct access to export markets to generate
further revenues. With a direct pipeline into Spain from Morocco
and access to markets from Mauritania through the Port of Rotterdam
supply chains are already being established, which is a key benefit
to the projects locations in the vicinity of Europe, as well as
having access to the wider African continent. A feature of
transitional power projects is the potential for local communities
to benefit from surplus supply from the mine sites and also
potentially inherit the assets at the end of life of mine.
Chariot's projects can help our partners and mining companies
meet their responsibility objectives. For Governments, these
projects could have a significant impact on accelerating growth and
GDP and for shareholders - with whom we are aligned having
supported recent fundraisings - all these positive impacts have the
potential to drive significant value creation.
As our business develops, we are committed to continually
improving our approach and actively managing and looking to
mitigate our ESG risks and impacts. We adopt the IFC Performance
Standards, the Equator Principles and the applicable UN Sustainable
Development Goals as guiding principles across our business and we
will continue to strive to achieve best practice throughout our
operations.
Conclusion
I would like to take this opportunity to thank both ONYHM in
Morocco, the Government of Mauritania and all our valued partners,
including the Ministries in Namibia and Brazil, for their ongoing
support and collaboration, the Chariot Board and our team for their
dedication, commitment and enthusiasm and our shareholders for
their ongoing support.
Our mission is to create value and deliver positive change
through investment in projects that are driving the energy
revolution and we are fully committed to executing this. As a
nimble and entrepreneurial company, we will continue to leverage
our network and utilise our expertise to seek out new ventures
where we can play a key role and that fit within our ethos and
strategy. We are excited about the potential that sits within our
current portfolio, as well as opportunities that the future holds.
We look forward to our ongoing progression and evolution.
Adonis Pouroulis
Chief Executive Officer
21 June 2022
Chief Financial Officer's Review
Funding and Liquidity as at 31 December 2021
The Group entered 2022 with cash of US$19.4 million as at 31
December 2021 (31 December 2020: US$3.7 million) and no debt. The
proceeds of US$5 million raised from the issue of underwriting
shares to Magna Capital LDA in the post-period, as well as the
equity fundraising completed in June 2022 of US$29.5 million means
the Group is well capitalised to execute the next phase of its
strategy to both monetise the high value Anchois gas development
project and progress its highly scalable Transitional Power stream
and early stage green hydrogen project.
An extensive cost reduction programme in 2020 provided Chariot
with a lower cost base and leaner foundation whilst still retaining
operational capability. This leaner foundation has been built upon
throughout 2021 as the Company has grown its presence in Morocco
and acquired a renewables business.
During 2021, the Group invested c.US$12 million into the
business through its successful appraisal and exploration drilling
campaign in Morocco, acquisition of the AEMP business and
administration activities (31 December 2020: c.US$6 million).
As at 31 December 2021, US$5.4 million of the Group's cash
balances were held as security against licence work commitments.
The increase from US$0.5 million at 31 December 2020 was due to an
increase in Moroccan bank guarantees.
Financial Performance - Year Ended 31 December 2021
The Group's loss after tax for the year to 31 December 2021 was
US$7.0 million, a decrease of US$63.6 million on the US$70.6
million loss incurred for the year ended 31 December 2020 which was
driven by an impairment charge of US$66.7 million recorded against
the full book value of Namibian and Brazilian exploration assets.
This equates to a loss per share of US$(0.01) compared to a loss
per share of US$(0.19) in 2020.
The share-based payments charge of US$0.8 million for the year
ended 31 December 2021 was US$0.6 million higher than the US$0.2
million in the previous year due mostly to the granting of employee
and Directors' deferred share awards in the current year.
Other administrative expenses of US$5.7 million for the year
ended 31 December 2021 are higher than the previous years' US$3.7
million driven mainly by business development projects and
acquisition costs as the Company looked to expand its Transitional
Gas and Transitional Power business units, combined with costs of
pre-feasibility studies expensed on the green hydrogen project.
Finance expenses of $0.5 million (31 December 2020: income of
US$0.5 million) relates to the holding of cash balances in Sterling
to meet administrative expenses in the current year, resulting in
higher foreign exchange losses, inclusive of US$0.1 million (31
December 2020: US$0.1 million) unwinding of the discount on the
lease liability under IFRS 16.
Exploration and Evaluation Assets as at 31 December 2021
Having impaired the non-core exploration activities in Namibia
and Brazil in 2020, the increase in carrying value of the Group's
exploration and evaluation assets in 2021 relates entirely to the
Morocco geographic area reflecting US$18.9 million invested in the
successful appraisal and exploration drilling of Anchois and other
licence costs which were capitalised.
Business acquisition - AEMP
In June 2021 the Company completed the acquisition of the
business of Africa Energy Management Platform ("AEMP") which has
been accounted for as an acquisition of a business under IFRS 3.
Accordingly, at acquisition the total identifiable assets and
liabilities assumed were US$0.5 million, the majority of which was
attributable to the 10% project equity held in the operational
Essakane power project. The balance of the consideration of US$0.4
million at the time of acquisition was allocated to goodwill. No
impairment of the investment in power projects or goodwill was
identified in the period from acquisition to 31 December 2021.
The total consideration payable was US$0.9 million, of which
US$0.1million was paid in cash, US$0.7million in new ordinary
shares issued and US$0.1 million as deferred consideration payable
in equity (shares to be issued reserve). Further contingent
payments relating to the acquisition will be recognised as share
based payments and a charge of US$0.1 million has been included in
the period to 31 December 2021.
Post the year end two Memorandum of Understandings ("MoUs") were
announced indicating the value that is already being generated from
the acquisition, with a 40MW solar project to sell solar power to
the Tharisa mine in South Africa and a 430MW project to sell low
carbon energy to First Quantum Minerals' mining operations in
Zambia. Both projects are large scale, early stage and are in
partnership with Total Eren, with no commitments in the near
term.
Other Assets and Liabilities as at 31 December 2021
In 2021, wellheads and casing valued at a total of US$1.2
million were held in inventory relating to the Anchois drilling
campaign in Morocco, as compared with Nil at the end of 2020, when
inventory disposed of for scrap value had resulted in a charge of
US$0.5 million to the income statement.
As at 31 December 2021, the Group's net balance of current trade
and other receivables and current trade and other payables shows a
net current liability position of US$14.2 million (31 December
2020: US$0.2 million) with the increase due primarily to
outstanding payables for the Moroccan drilling campaign.
Under IFRS 16 the Group has recognised a depreciating right-of
use asset of US$0.3 million (31 December 2020: US$0.7 million) and
a corresponding lease liability based on discounted cashflows of
US$0.4 million (31 December 2020: US$0.8 million), with the
reductions resulting from depreciation and rental commitments paid
that are partially offset by unwinding of the discount on the lease
liability.
Outlook
The recent announcement of Societe Generale being appointed to
lead debt financing of the Anchois gas project in Morocco
demonstrates the project's bankable economic fundamentals. We are
pleased to be part of the solution to Morocco's domestic energy
needs and a part of the wider European supply.
The fundraise completed in June 2022 of US$29.5 million means
Chariot is funded to accelerate the FEED programme to FID,and
fast-track to cashflows from production into the gas hungry
Moroccan and European markets. There is much hard work ahead as we
enter into the next phases of the project including negotiations on
gas sales and project finance but we move forward encouraged and
emboldened by a highly successful drilling result which has
potentially opened up a new gas basin and a much larger resource
base than pre-drill estimates had planned for. We are equally
enthused by the progress being made in the Transitional Power
business as two world class projects have already been announced in
early 2022 which demonstrate the bank of projects in the pipeline
being accelerated in partnership with Total Eren. We will also look
to strategically partner at the subsidiary level within the
Transitional Power business.
Julian Maurice-Williams
Chief Financial Officer
21 June 2022
Technical Director's Review of Operations
Transitional Gas
Overview:
Chariot has operated upstream projects in Morocco since 2013,
with the current portfolio now comprising the Lixus Offshore and
Rissana Offshore licences.
Lixus Offshore was awarded in 2019, secured after our team
re-assessed the commercial potential of the on-block Anchois gas
discovery (made in 2009) and identified a low-risk follow-on
portfolio in the same play system. Following the reprocessing and
reinterpretation of 3D seismic data, Anchois was estimated to
contain 361 Bcf of 2C Contingent Resources, by independent
assessment from NSAI in 2020. With 75% working interest (operator),
Chariot works alongside partners Office National des Hydrocarbures
et des Mines ("ONHYM"), who hold a 25% carried interest in the
1,794km(2) area licence block.
The Anchois-2 appraisal and exploration drilling campaign was
successfully completed in January 2022 with operations being
conducted by the Chariot team, safely, on time and on budget. The
well encountered the previously discovered A & B gas sands,
confirming the extension of the gas bearing intervals, and
identified new gas-bearing reservoirs in the lower B sands and also
in the C, M and O sands exploration objectives.
In 2022, Chariot was awarded the Rissana Offshore licence (as
operator with 75% interest, ONHYM 25%), an extensive licence area
of 8,500km(2), fully encompassing the maritime borders of Lixus,
thereby capturing the upside potential of the proven gas bearing
tertiary fairways at Anchois, as well as providing exciting new
play opportunities.
Anchois Drilling Results:
An appraisal campaign was initiated on the Anchois gas field in
December 2021, led by Chariot's Group Drilling Manager David
Brecknock and a highly experienced team including many personnel
from our previous drilling campaign in Namibia in 2018. This
campaign comprised a new appraisal and exploration well, Anchois-2,
with additional plans to assess the potential of the original
Anchois-1 discovery well to be a producer in any subsequent
development of the field.
The Anchois-2 well was drilled to a Total Depth (TD) of 2,512m
by the Stena Don semi-submersible drilling rig in 381m of water.
Following a comprehensive pre-campaign design and planning phase,
the drilling operations were completed in 31 days, which is
approximately half the time of the original discovery well. Of
particular importance was the drilling efficiency, which allowed
all the reservoir objectives to be drilled in a single hole
section, with TD reached in 17 days from the rig arriving on
location, permitting a single comprehensive wireline evaluation
programme across all reservoir zones. The operations were conducted
on time and on budget, during heavy travel restrictions due to the
Covid pandemic, including the emergence of the Omicron variant,
demonstrating the nimbleness and exemplary contingency planning
from the team.
In the appraisal objectives, the well successfully encountered
the A and B gas sands, discovered in the original Anchois-1 well.
This demonstrated the extension of these accumulations and
permitted recovery of important subsurface data missing from the
original well, such as reservoir pressures and gas samples from the
A sand interval, considering the well was not optimised for an
evaluation of that interval. Within the primary objective, the B
gas sands, a new "lower B sand" reservoir was encountered, with a
deeper gas-water contact (GWC) than seen in the original well.
Porosity and permeability confirmed good reservoir quality,
consistent with Anchois-1, with over 55 m of net gas pay identified
in the Anchois-2 B sands from subsurface data, comparing favourably
to the original well which had 33 m of net gas pay in the B
sands.
In the exploration objectives, the well successfully identified
new discoveries in the C, M and O gas sands. Of these, the C and M
sands were the primary pre-drill targets at this location and
related to thin gas pays and water-bearing sands in the Anchois-1
well, respectively. Chariot's interpretation of the reprocessed
seismic data identified locations within the Anchois structure
where the seismic attributes suggested that reservoir quality
improved in the C sands and that the M sands could be gas-bearing
in an up-dip location. These reservoirs were found to be entirely
gas-bearing and thicker than pre-drill expectations. Drilling
continued into the O sands, largely as a stratigraphic test to
confirm the presence of reservoir since this location was not
optimised to test a specific closure. However, gas-bearing
reservoir zones were encountered, above a thick section of good
porosity, water-bearing reservoir, which continued to TD.
Data acquired from subsurface electrical logging underpins our
understanding of the reservoir and fluid properties. A
comprehensive evaluation of the well was undertaken through
wireline logging, subsurface formation testing, including reservoir
pressures and gas sampling, sidewall cores, and well bore seismic
profiles. The data acquired from the well were analysed through a
post-drilling evaluation programme, resulting in a total calculated
net gas pay of approximately 150m, compared to 55m in the original
Anchois-1 discovery well. Additionally, the gas sampled within the
seven gas-bearing zones were found to be of high quality, with a
consistent composition throughout the well, with >96% methane
(dry gas) and without problematic impurities such as hydrogen
sulphide or carbon dioxide.
Anchois-2 was suspended for potential future re-entry and
completion as a production well in the development of the field.
Subsequent to the Anchois-2 operations, the Anchois-1 gas discovery
well integrity was assessed also left suspended for future
potential re-entry as a producer.
Development Plan:
As part of the initial exploration period work commitments on
Lixus, and in anticipation of the appraisal drilling campaign,
Chariot performed pre-FEED studies on a development of the Anchois
field with Xodus in 2020. This work validated the subsea-to-shore
development concept for the Anchois gas field and was used to
estimate development costs and schedule to support the economic
viability of the project. In early 2021, Chariot entered into a
Collaboration Agreement with the Subsea Integration Alliance (SIA),
a non-incorporated alliance of leading gas development contractors,
with the aim of the SIA and Schlumberger supplying front-end
engineering and design (FEED); engineering, procurement and
construction (EPC); and operations and maintenance (O&M) for
the Anchois development project. These activities laid the
foundations for the opportunity of a fast-track development
programme, prior to success at Anchois-2.
Following the drilling campaign, Chariot is now focussed on
progressing with a development plan for the Anchois gas resources,
including both the original gas sands and potentially also the
newly-discovered reservoirs, considering that the consistent high
quality gas composition would allow all reservoirs to be developed
through the same infrastructure. This plan considers an initial
development with two or more subsea producers tied to an onshore
Central Processing Facility ('CPF') with a capacity to process 70
mmscfd. An onshore pipeline would connect the CPF to the existing
Maghreb-Europe gas pipeline, giving access to both Moroccan
domestic markets and export routes into Spain.
Activity for the remainder of 2022 will include FEED engineering
on all aspects of the development, including drilling and
completion, subsea production systems, offshore flowline and
umbilical, onshore gas processing plant and the onshore export
pipeline. One of the benefits of working with the SIA is the
ability to utilise standardised equipment and to shorten cost and
timing uncertainty associated to engineering and procurement
activities.
Gas Commercialisation:
In Morocco, alongside a growing renewable power programme,
imported fossil fuels dominate and the country relies on imports
for over 90% of its primary energy needs. The Maghreb-Europe
Pipeline ("GME") was a key import route for Morocco from Algeria
for power generation, with domestic power stations at Ain Beni
Mathar and Tahaddart consuming up to 100 mmscfd since 2012,
representing approximately 10% of Morocco's national power
generation capacity. However, at the end of October 2021, the
long-standing gas sales agreement between Morocco and Algeria
ended, meaning the loss of gas supply to those power plants.
With the potential to provide a material local gas production,
Chariot's projects fit in with the Kingdom of Morocco's national
strategy of industrial development, economic decarbonisation and
diversification of the energy mix, allowing the reduction of
dependency on imported fuels for both power generation and
industrial consumption.
Chariot licences are located within an important industrial
region along Morocco's Atlantic coast. The stretch from Kenitra to
Casablanca, adjacent to Anchois, represents approximately
two-thirds of Morocco's GDP and population; it is anticipated that
industrial gas demand will grow significantly. The initial Anchois
field gas volumes were regarded sufficient to meet expected
domestic demands, however, with the confirmed discovery increasing
volumes, Chariot has identified the opportunity to supply surplus
gas into the European market, via the GME connection with Spain.
This represents a very large and increasingly attractive market
which could both take surplus gas over and above domestic demand
from the initial Anchois development and also provide a rapid
commercialisation route for any additional discoveries to be
tied-back to the Anchois infrastructure.
The industrial demand for gas is fast growing with prices
already established in the region of US$10-11/mcf. Lixus boasts
excellent contract terms in what is widely known internationally to
be a favourable fiscal environment. There is at present a 10-year
corporate tax holiday from the commencement of production and a low
3.5% royalty on gas produced offshore at the water depth of the
Anchois discovery, with ONHYM paying its 25% share of the
development. The 10-year tax holiday is an important incentive to
encourage the initiation of a domestic offshore gas supply.
The importance of Lixus to the Chariot Group as a strategic
asset has increased considerably since the discovery at Anchois-2,
but moreover to the Kingdom of Morocco, given the strong ESG
credentials and ability to alleviate the growing energy demand,
which is anticipated to double by 2040.
Gas Market:
Domestic markets in Morocco offer attractive gas prices to both
the industrial and power markets; the current pre-drill economic
model is supported by audited 2C 361Bcf estimate base case
resource, with 70mmscf per day potential at US$8-15 per mcf to
power and industry.
In October 2021, Chariot signed a gas sales agreement with a
leading international energy group for gas offtake. The MoU will
underpin the development as part of a long-term partnership, which
offers an important opportunity to sell surplus gas above domestic
requirements into the European market, utilising the connection of
the Maghreb-Europe (GME), which provides direct access to Europe
via Spain.
With gas prices in Spain typically ranging from 20 to 60
US$/mmbtu during Q4 2021 to Q1 2022 , and with the widely-held
expectation that European gas prices will remain high for the
medium term, selling surplus gas into the European market provides
an extraordinary opportunity for Chariot to play a role in the
diversification of Europe's gas supplies and for this market to
provide a catalyst to deliver accelerated growth from the upsides
in the exploration portfolio.
The Anchois Development project is targeting first gas from as
early as 2024.
Exploration Portfolio:
In Morocco, Chariot has built an extensive library of seismic
data, including >4,000 km(2) of 3D and nearly 20,000 km of 2D
regional seismic data. Access to this vast dataset has been crucial
in understanding the on-block play types and maturing a material
prospect portfolio. With the intention to acquire more data over
areas that have already revealed significant prospectivity and play
extensions, the team are currently focussed on maturing exploration
opportunities over the Lixus and Rissana blocks.
Lixus:
Following the positive drilling results of 2022, additional
exploration prospects within the Lixus licence area with similar
seismic attributes to the Anchois discovery are now considered to
be low risk. Accordingly, extensive work is ongoing to extrapolate
the lessons learnt from drilling results and the application of
seismic attribute analysis to de-risk and rank the follow-on
portfolio. This work includes conventional seismic interpretation,
revision of the depth model of the 3D dataset reprocessed in 2020,
and advanced analysis such as AVO, seismic inversion and spectral
decomposition.
The focus areas de-risked by the Anchois-2 well are the
so-called "hubs", groups of prospects that can be tied-back through
a potential development initially unlocked by one anchor prospect,
which itself would provide the flowlines to the onshore CPF:
-- The Anchois Hub consists of the "Anchois Satellites", which
are extensions of the discovered sand intervals into adjacent fault
blocks and are typically within 5-10km of the existing Anchois
wells. The satellite prospects encompass stacked targets within the
Miocene reservoirs (A, B, C, M and O sands). These targets and have
been discretely mapped and can be calibrated to the gas bearing
intervals at Anchois, with upside contributions from younger,
shallower Pliocene sands which also exhibited strong attribute
support for gas-bearing reservoir.
-- The Maquereau Hub is located on the NE boundary of the larger
Mio-Pliocene basin in the central part of the block, approximately
20 km north-east of Anchois. Prospects are formed of clastic
turbidite systems that were deposited in the same environment and
basin as the Anchois sands, however redirected to the north, due to
growing accommodation space from listric faulting. The primary
target within this hub is Maquereau Central.
-- The Shallow Hub hosts key shallow water prospects Anguille
and Tombe; these clastic channel prospects are in a basin east of
Anchois, within 10km of the coast, in water depths of <100m. The
reservoir targets can be correlated across the basin to good
quality sands intersected in the 2011 Deep Thon-1 well. The primary
target within this hub is Anguille.
Rissana:
The Rissana Offshore licence was awarded to Chariot with 75%
interest and operatorship in February 2022; the block has a total
area of 8,489km(2). Surrounding the Lixus Offshore licence, Rissana
holds significant volumes of on block 3D data, including recaptured
areas of the recently reprocessed 2020 and 2017 3D cubes from the
Lixus licence and Chariot's historical licence areas
respectively.
Rissana hosts a substantial portfolio of exploration prospects
in a variety of different plays, including an extension of the
Anchois gas play that was confirmed by the Anchois-2 gas discovery
in 2022. Other plays include Miocene - Pliocene clastic sand
systems further north, where prospects have reservoirs of similar
age to prospects on the Lixus block across a wide range of trapping
styles, with characteristic supporting seismic attributes.
One of the key prospects on Rissana is Emissole, located in the
north-eastern corner of the 3D dataset. This tilted fault block
structure holds 5 stacked reservoir intervals set in an
unconformity sub-crop setting. Emissole has several visible flat
spots and AvO anomalies, supporting significant volumes in shallow
water depths of approximately 150m and with several follow-up
opportunities.
Legacy 3D prospects from the previous Mohammedia licence have
also been reintegrated into the Chariot portfolio. The shallow
marine, clastic deltaic prospects add giant-scale volumetric
potential to the exploration portfolio.
Other Blocks:
Brazil:
The Barreirinhas basin licence blocks are currently in a period
of suspension and future extensions are possible due in part to the
impacts of the COVID-19 pandemic.
Namibia:
Chariot has made the decision not to renew operatorship of the
2312 A & B "Central Blocks" that comprise the PEL 71 licence.
Chariot retains the option to back-in to the 2714 A & B
"Southern Blocks" licence.
Duncan Wallace
Technical Director
21 June 2022
Transitional Power
Strategic partnership with Total Eren
Further to the acquisition of AEMP last year, Chariot's
Transitional Power team has continued to go from strength to
strength, building up the team, and developing its plans and
objectives as well as further strengthening its strategic
partnership with Total Eren, a leading France based renewable
energy Independent Power Producer to work together on the joint
origination and development of wind and solar projects for mining
clients in Africa. This partnership is in place for the next three
years, with the option to extend for a further two thereafter and
Chariot has the right to invest between 15-49% into the
co-developed projects.
To date, the partners have built an active pipeline of 485 MW of
African mining power projects and are targeting 1GW by the end of
the year. Chariot and Total Eren also have ambitions to collaborate
on other projects and transactions in Africa.
ESSAKANE PROJECT: BURKINA FASO
Chariot's first renewable project supplies 15MW of solar power
as part of a hybrid solar-thermal power solution to IAMGOLD's
Essakane gold mine in Burkina Faso. On commissioning, the project
was the largest hybrid Photo Voltaic-Heavy Fuel Oil power plant in
the world and one of the largest solar facilities in sub-Saharan
Africa with 130,000 solar panels.
Chariot holds 10% equity in this award-winning project, with
Total Eren holding the remaining 90%. Chariot has been involved in
the project since the origination of the mine, including: designing
the size and determining the operating philosophy of the hybrid
power plant; obtaining local authorisations and permits; selection
of the engineering, procurement and construction contractor;
financing; and, operating post-completion. The project's successful
completion and generation of returns provide proof of concept and a
valuable showcase from which replication and scale-up is
anticipated.
100% of permanent Essakane project staff are nationals,
demonstrating the benefit to local communities, while 1% of project
revenues are dedicated to community investment, such as tree
planting campaigns and the distribution of solar kits to schools.
Carbon credits are also registered with the UN to raise funds for
community developments.
THARISA: SOUTH AFRICA
In February 2022, Chariot and Total Eren jointly announced the
signing of a Memorandum of Understanding ("MoU") with Tharisa plc,
the platinum group metals and chrome producer, to develop, finance,
construct, own, operate and maintain a solar photovoltaic (PV)
project for the supply of electricity to the Tharisa mine, in the
North West Province, South Africa. The solar PV project is
initially anticipated to be 40 MW with demand expected to increase
over the life of the Tharisa Mine. This MoU is the first step
towards the implementation of the Project and signing of a
long-term Power Purchase Agreement (PPA) for the supply of
electricity on a take-or-pay basis and project development is
already well underway.
Adonis Pouroulis, Acting CEO of Chariot, beneficially owns a
substantial proportion of the total voting rights in Tharisa.
FIRST QUANTUM: ZAMBIA
As also announced post period in March 2022, Chariot and Total
Eren have established a partnership with First Quantum Minerals
("FQM"), a global mining and metals company, to advance the
development of a 430 MW solar and wind power project for its mining
operations in Zambia.
This flagship project has the potential to complement and expand
Zambia's existing renewable energy capacity and would provide FQM
with competitive and sustainable power for its Zambian mining
operations, delivering on FQM's commitment to decarbonisation as it
seeks to reduce its carbon footprint and improve energy security
through diversification of supply.
Green Hydrogen Project
Project Nour
Chariot's Green Hydrogen project, "Project Nour", spans two
onshore areas totalling approx. 5,000 km(2) , across northern
Mauritania; a location that takes advantage of the wide scale wind
and solar potential, important for large-scale renewable energy
generation and low-cost hydrogen production. Project Nour also
benefits from geographical proximity to Nouadhibou (Mauritania's
deep-sea port) and to large European markets, with the potential to
make Mauritania one of the world's main producers and exporters of
green hydrogen.
Chariot is working in partnership with the Government of
Mauritania to support their ambition to become a leading producer
and exporter of green hydrogen, the latter strengthened through the
MoU signed with the Port of Rotterdam in April 2022, which was a
first step in establishing supply chains to enable the sale of
green hydrogen and its derivative products (notably ammonia) into
Europe.
Project Nour has the ability to create a range of positive
impacts through socio-economic development in Mauritania through
increased investment, job creation, skill development and increased
government revenues, and its world class potential was verified by
the Pre-Feasibility Study ("PFS"), as announced in May 2022. A
Framework Agreement is now in place which defines the terms and
guiding principles to pave the way for the in-depth feasibility
study that will be undertaken over the next 24 months and a
partnering process is underway with the objective of forming a
world class consortium to further develop the project .
Green Hydrogen Market
Green hydrogen is predicted to play a vital role in the global
energy transition; the results of the PFS show the potential scale
of Project Nour, with up to 10 GW of installed electrolysis to
produce green hydrogen and green ammonia, Project Nour could become
one of the largest global projects of its kind by 2030.
The International Renewable Energy Agency projects that the
combined value of hydrogen and its derivatives will be larger than
the fossil fuel market by 2050.
Pre-Feasibility Study:
The PFS for Project Nour, completed in 2022, confirmed the
project's ability to produce some of the cheapest green hydrogen in
the world:
-- Unique and complementary wind and solar conditions,
underpinning attractive project economics
-- Possibility of production of competitive green ammonia for export
-- Partnering process underway with the objective to form a world-class consortium
Chariot recently signed a Framework Agreement with the
Government of Mauritania, paving the way for the in-depth
feasibility study that will seek to confirm the potential for
installing up to 10GW of electrolyzer capacity.
Chariot Limited
Consolidated Statement of Comprehensive Income for the Year
Ended 31 December 2021
Year ended Year ended
31 December 31 December
2021 2020
Notes US$000 US$000
Share based payments 21 (760) (222)
Loss on disposal of inventory 14 - (524)
Im pairment of exploration
asset 10 - (66,666)
Other administrative expenses (5,688) (3,678)
-------------------------------------- ------ -------------- --------------
Total operating expenses (6,448) (71,090)
-------------------------------------- ------ -------------- --------------
Loss from operations 4 (6,448) (71,090)
Finance income 6 - 543
Finance expense 6 (512) (72)
-------------------------------------- ------ -------------- --------------
Loss for the year before taxation (6,960) (70,619)
Tax expense 8 - (1)
-------------------------------------- ------ -------------- --------------
Loss for the year and total
comprehensive loss for the
year attributable to equity
owners of the parent (6,960) (70,620)
-------------------------------------- ------ -------------- --------------
Loss per Ordinary share attributable 9 US$(0.01) US$(0.19)
to the equity holders of the
parent - basic and diluted
-------------------------------------- ------ -------------- --------------
All amounts relate to continuing activities.
The notes form part of these financial statements.
Chariot Limited
Consolidated Statement of Changes in Equity for the Year Ended
31 December 2021
Share based Total
For the year payment Foreign attributable
ended 31 Share Share Contributed reserve exchange Retained to equity
December 2020 capital premium equity reserve deficit holders of
the parent
US$000 US$000 US$000 US$000 US$000 US$000 US$000
--------------- ------------- ------------- ------------- ------------ ------------ ------------- -------------
As at 1
January 2020 6,268 356,503 796 5,408 (1,241) (281,174) 86,560
Loss and total
comprehensive
loss for the
year - - - - - (70,620) (70,620)
Share based
payments - - - 222 - - 222
Transfer of
reserves due
to issue of
share awards 281 3,106 - (3,387) - - -
Transfer of
reserves due
to lapsed
share options - - - (796) - 796 -
Transfer of
reserves - - - 1,241 (1,241) -
As at 31
December 2020 6,549 359,609 796 1,447 - (352,239) 16,162
--------------- ------------- ------------- ------------- ------------ ------------ ------------- -------------
Share based Total
For the year payment Shares to attributable
ended 31 Share Share Contributed reserve be issued Retained to equity
December 2021 capital premium equity reserve deficit holders of
the parent
US$000 US$000 US$000 US$000 US$000 US$000 US$000
--------------- ------------- ------------- ------------- ------------ ------------ ------------- -------------
As at 1
January 2021 6,549 359,609 796 1,447 - (352,239) 16,162
Loss and total
comprehensive
loss for the
year - - - - - (6,960) (6,960)
Issue of
capital 5,147 25,585 - - - - 30,732
Issue costs - (1,876) - - - - (1,876)
Share based
payments - - - 760 - - 760
Share based
deferred
consideration - - - 142 - 142
As at 31
December 2021 11,696 383,318 796 2,207 142 (359,199) 38,960
--------------- ------------- ------------- ------------- ------------ ------------ ------------- -------------
The following describes the nature and purpose of each reserve
within owners' equity.
Share capital Amount subscribed for share capital at nominal value.
Share premium Amount subscribed for share capital in excess of
nominal value.
Contributed equity Amount representing equity contributed by the
shareholders.
Share based payments reserve Amount representing the cumulative
charge recognised under IFRS2 in respect of share option, LTIP and
RSU schemes.
Foreign exchange reserve Foreign exchange differences arising on
translating into the reporting
currency.
Retained deficit Cumulative net gains and losses recognised in
the financial statements.
Shares to be issued reserve Deferred consideration on acquisition recognized in equity
The notes form part of these financial statements.
Chariot Limited
Consolidated Statement of Financial Position as at 31 December
2021
31 December 31 December
2021 2020
Notes US$000 US$000
Non-current assets
Exploration and evaluation assets 10 31,750 12,822
Investment in power projects 11 450 -
Goodwill 11 380 -
Property, plant and equipment 12 84 43
Right of use asset 16 328 655
----------------------------------- ------ ------------ ------------
Total non-current assets 32,992 13,520
----------------------------------- ------ ------------ ------------
Current assets
Trade and other receivables 13 1,167 811
Inventory 14 1,183 -
Cash and cash equivalents 15 19,406 3,740
----------------------------------- ------ ------------ ------------
Total current assets 21,756 4,551
----------------------------------- ------ ------------ ------------
Total assets 54,748 18,071
----------------------------------- ------ ------------ ------------
Current liabilities
Trade and other payables 17 15,358 1,060
Lease liability: office lease 16 430 409
----------------------------------- ------ ------------ ------------
Total current liabilities 15,788 1,469
----------------------------------- ------ ------------ ------------
Non-current liabilities
Lease liability: office lease 16 - 440
Total non-current liabilities - 440
----------------------------------- ------ ------------ ------------
Total liabilities 15,788 1,909
----------------------------------- ------ ------------ ------------
Net assets 38,960 16,162
----------------------------------- ------ ------------ ------------
Capital and reserves attributable
to equity holders of the parent
Share capital 18 11,696 6,549
Share premium 383,318 359,609
Contributed equity 796 796
Share based payment reserve 2,207 1,447
Shares to be issued reserve 11 142 -
Retained deficit (359,199) (352,239)
----------------------------------- ------ ------------ ------------
Total equity 38,960 16,162
----------------------------------- ------ ------------ ------------
The notes form part of these financial statements.
The financial statements were approved by the Board of Directors
and authorised for issue on 21 June 2022 .
George Canjar
Chairman
Chariot Limited
Consolidated Cash Flow Statement for the Year Ended 31 December
2021
Year ended Year ended
31 December 31 December
2021 2020
US$000 US$000
Operating activities
Loss for the year before taxation (6,960) (70,619)
Adjustments for:
Loss on disposal of inventory - 524
Impairment of exploration asset - 66,666
Finance income - (543)
Finance expense 512 72
Depreciation 358 387
Share based payments 760 222
Net cash outflow from operating
activities before changes in working
capital (5,330) (3,291)
Increase in trade and other receivables (116) (34)
Increase / (decrease) in trade and
other payables 445 (728)
Increase in inventories (1,183) -
Cash outflow from operating activities (6,184) (4,053)
Tax payment - (1)
Net cash outflow from operating
activities (6,184) (4,054)
------------------------------------------ -------------- --------------
Investing activities
Finance income - 29
Payments in respect of property,
plant and equipment (72) (8)
Payments in respect of exploration
assets (5,301) (1,971)
Net cash consideration on acquisition (21) -
Net cash outflow used in investing
activities (5,394) (1,950)
------------------------------------------ -------------- --------------
Financing activities
Issue of ordinary share capital 28,175 -
net of fees
Payments of lease liabilities (419) (337)
Finance expense on lease (46) (72)
------------------------------------------ -------------- --------------
Net cash from financing activities 27,710 (409)
------------------------------------------ -------------- --------------
Net increase / (decrease) in cash
and cash equivalents in the year 16,133 (6,413)
Cash and cash equivalents at start
of the year 3,740 9,635
Effect of foreign exchange rate
changes on cash and cash equivalents (466) 518
Cash and cash equivalents at end
of the year 19,406 3,740
------------------------------------------ -------------- --------------
The notes form part of these financial statements.
Chariot Limited
Notes forming part of the financial statements for the year
ended 31 December 2021
1 General information
Chariot Limited is a company incorporated in Guernsey with
registration number 47532. The address of the registered office is
Oak House, Hirzel Street, St Peter Port, Guernsey, GY1 2NP. The
nature of the Company's operations and its principal activities are
set out in the Report of the Directors and in the Technical
Director's Review of Operations.
2 Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with
UK Adopted International Accounting Standards.
In accordance with the provisions of section 244 of the
Companies (Guernsey) Law, 2008, the Group has chosen to only report
the Group's consolidated position, hence separate Company only
financial statements are not presented.
The financial statements are prepared under the historical cost
accounting convention on a going concern basis.
Going concern
As at 31 December 2021 the Group had cash of US$19.4 million, no
debt and minimal licence commitments.
In June 2022 an equity fundraise completed which raised US$29.5
million.
The Directors have reviewed the cash-flow projection for the
Group to consider if it has sufficient finance in place to meet its
financial commitments for at least 12 months.
The Group has recently completed a successful appraisal drilling
campaign at Anchois and is now funded to advance the engineering
and design of the Anchois Gas Development, including FEED project,
project financing, gas sales and updated reserves report, to reach
FID. The Company continues to focus on partnering in both the
Transitional Gas and Transitional Power business streams, and the
Board has the reasonable expectation of generating future value and
cash from this strategy. Based on these forecasts the Board has a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future.
For these reasons, the Directors continue to adopt the going
concern basis in preparing the Annual Report and Accounts.
New Accounting Standards
The following new standards and amendments to standards are
mandatory for the first time for the Group for the financial year
beginning 1 January 2021. The implementation of these standards and
amendments to standards has had no material effect on the Group's
accounting policies.
Standard Effective year
commencing on
or after
Interest Rate Benchmark Reform - Phase 2 1 January 2021
(Amendments to IFRS 9, IAS 39, IFRS 7, IFRS
4 and IFRS 16)
---------------
Certain new standards and amendments to standards have been
published that are mandatory for the Group's accounting periods
beginning after 1 January 2022 or later years to which the Group
has decided not to adopt early when early adoption is
available.
The implementation of these standards and amendments is expected
to have no material effect on the Group's accounting policies.
These are:
Standard Effective year
commencing on
or after
Annual Improvements 2018-2020 Cycle 1 January 2022*
----------------
IAS 16 Property, Plant and Equipment (Amendment 1 January 2022*
- Proceeds before Intended Use)
----------------
IFRS 3 Business Combinations (Amendment 1 January 2022*
- Reference to the Conceptual Framework)
----------------
IAS 37 Provisions, Contingent Liabilities 1 January 2022*
and Contingent Assets (Amendment - Onerous
Contracts - Cost of Fulfilling a Contract)
----------------
*Endorsed for use in the EU but not in the UK.
IFRS 16 - Leases
Under IFRS 16 lease liabilities are initially measured at the
present value of the remaining lease payments and discounted using
an incremental borrowing rate at the date of recognition.
Associated right-of-use assets are measured at an amount equal to
the lease liability adjusted for any prepaid or accrued lease
payments.
Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to profit or loss over
the lease period to produce a constant periodic rate of interest on
the remaining balance of the liability for each period. The
right-of-use asset is depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis.
The Group has elected not to recognise right-of-use assets and
liabilities for leases where the total lease term is less than or
equal to 12 months, or for leases of low-value assets. Low-value
assets comprise IT equipment and small items of office furniture.
Payments associated with short-term leases and leases of low-value
assets are recognised on a straight-line basis as an expense in
profit or loss.
Further details on the lease liability can be found in note
16.
Exploration and evaluation assets
The Group accounts for exploration and evaluation costs in
accordance with the requirements of IFRS 6 Exploration for and
Evaluation of Mineral Resources.
Any costs incurred prior to obtaining the legal rights to
explore an area are expensed immediately to the Income Statement.
All expenditures relating to the acquisition, exploration and
appraisal of oil and gas interests, including an appropriate share
of directly attributable overheads, are recognised as exploration
and evaluation assets and initially capitalised by reference to
appropriate geographic areas. Costs recognised as exploration and
evaluation assets are transferred to property, plant and equipment
and classified as oil and gas assets when technical feasibility and
commercial viability of extracting hydrocarbons is
demonstrable.
Costs recognised as exploration and evaluation assets are tested
for impairment whenever facts and circumstances suggest that they
may be impaired. Where exploration wells have been drilled,
consideration of the drilling results is made for the purposes of
impairment of the specific well costs. If the results sufficiently
enhance the understanding of the reservoir and its characteristics
it may be carried forward when there is an intention to continue
exploration and drill further wells on that target.
Where farm-in transactions occur which include elements of cash
consideration for, amongst other things, the reimbursement of past
costs, this cash consideration is credited to the relevant accounts
within the geographic area where the farm-in assets were located.
Any amounts of farm-in cash consideration in excess of the value of
the historic costs in the geographic area are treated as a credit
to the Consolidated Statement of Comprehensive Income.
Investment in power projects
The Group, through its subsidiary AEMP Essakane Solar SAS, holds
a 10% investment in the Essakane solar project, Burkina Faso. This
investment is recognised at fair value with any movement in fair
value subsequently recognised in the Consolidated Statement of
Comprehensive Income.
Further details on the investment in power projects can be found
in note 11.
Inventories
The Group's share of any material and equipment inventories is
accounted for at the lower of cost and net realisable value. The
cost of inventories comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
Taxation
Income tax expense represents the sum of the current tax and
deferred tax charge for the year.
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial statements and
the corresponding tax bases, and is accounted for using the balance
sheet liability method. Deferred tax liabilities are recognised for
all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that have been
enacted or substantively enacted and are expected to apply in the
year when the liability is settled or the asset realised. Deferred
tax is charged or credited to the Consolidated Statement of
Comprehensive Income, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Foreign currencies
Transactions in foreign currencies are translated into US
Dollars at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies
are translated into US Dollars at the closing rates at the
reporting date and the exchange differences are included in the
Consolidated Statement of Comprehensive Income . The functional and
presentational currency of the parent and all Group companies is
the US Dollar.
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost or fair value
on acquisition less depreciation and impairment. Depreciation is
provided on a straight line basis at rates calculated to write off
the cost less the estimated residual value of each asset over its
expected useful economic life. The residual value is the estimated
amount that would currently be obtained from disposal of the asset
if the asset were already of the age and in the condition expected
at the end of its useful life.
Property, plant and equipment are depreciated using the straight
line method over their estimated useful lives over a range of 3 - 5
years.
The carrying value of property, plant and equipment is assessed
annually and any impairment charge is charged to the Consolidated
Statement of Comprehensive Income.
Goodwill
The Group tests goodwill annually for impairment, or more
frequently if there are indications that goodwill might be
impaired.
Share based payments
Where equity settled share awards are awarded to employees or
Directors, the fair value of the awards at the date of grant is
charged to the Consolidated Statement of Comprehensive Income over
the vesting period. Non-market vesting conditions are taken into
account by adjusting the number of equity instruments expected to
vest at each balance sheet date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of
awards that eventually vest. Market vesting conditions are factored
into the fair value of the awards granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of
whether the market vesting conditions are satisfied. The cumulative
expense is not adjusted for failure to achieve a market vesting
condition.
Where the terms and conditions of awards are modified before
they vest, the increase in the fair value of the awards, measured
immediately before and after the modification, is also charged to
the Consolidated Statement of Comprehensive Income over the
remaining vesting period.
Where shares already in existence have been given to employees
by shareholders, the fair value of the shares transferred is
charged to the Consolidated Statement of Comprehensive Income and
recognised in reserves as Contributed Equity.
Basis of consolidation
Where the Company has control over an investee, it is classified
as a subsidiary. The Company controls an investee if it has power
over the investee and it is exposed to variable returns from the
investee and it has the ability to use its power to affect those
variable returns. Control is reassessed whenever facts and
circumstances indicate that there may be a change in any of these
elements of control. The consolidated financial statements present
the results of the Company and its subsidiaries ("the Group") as if
they formed a single entity. Intercompany transactions and balances
between the Group companies are therefore eliminated in full.
Business Combinations
Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the
sum of the acquisition-date fair values of assets transferred by
the Group, liabilities incurred by the Group to the former owners
of the acquiree and the equity interest issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are
recognised in profit or loss as incurred.
Trade and other receivables
Trade and other receivables are stated initially at fair value
and subsequently at amortised cost.
Financial instruments
The Group's financial assets consist of a bank current account
or short-term deposits at variable interest rates and other
receivables. Any interest earned is accrued and classified as
finance income.
The Group's financial liabilities consist of trade and other
payables. The trade and other payables are stated initially at fair
value and subsequently at amortised cost.
Joint operations
Joint operations are those in which the Group has certain
contractual agreements with other participants to engage in joint
activities that do not create an entity carrying on a trade or
business on its own. The Group includes its share of assets,
liabilities and cash flows in joint arrangements, measured in
accordance with the terms of each arrangement, which is usually pro
rata to the Group's interest in the joint operations . The Group
conducts its exploration, development and production activities
jointly with other companies in this way.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on
historical experiences and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may deviate from
these estimates and assumptions. If these estimates and assumptions
are significantly over or under stated, this could cause a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year. The areas where this could impact the
Group are:
a) Areas of judgement
i. Recoverability of exploration and evaluation assets
Expenditure is capitalised as an intangible asset by reference
to appropriate geographic area and is assessed for impairment when
management assesses that circumstances suggest that the carrying
amount may exceed its recoverable value.
ii. Treatment of farm-in transactions
All farm-in transactions are reflected in these financial
statements in line with the accounting policy on Exploration and
Evaluations assets. Farm-in transactions are recognised in the
financial statements if they are legally complete during the year
under review or, if all key commercial terms are agreed and legal
completion is only subject to administrative approvals which are
obtained within the post balance sheet period or are expected to be
obtained within a reasonable timeframe thereafter.
iii. Business combinations
The assessment of the purchase price allocation in the
acquisition of AEMP included a number of judgements and estimates
exercised by management including assessment of fair value of the
investment in the Essakane power project and goodwill.
3 Segmental analysis
With the acquisition of AEMP and updated strategy, the Group has
three reportable segments being transitional gas, transitional
power and corporate costs (2020: two being exploration and
appraisal and corporate costs). The operating results of each of
these segments are regularly reviewed by the Board of Directors in
order to make decisions about the allocation of resources and
assess their performance.
31 December 2021
Transitional Transitional Corporate Total
Gas Power
US$000 US$000 US$000 US$000
------------- ------------- ---------- ---------
Share based payments - (85) (675) (760)
------------- ------------- ---------- ---------
Administrative expenses (553) (212) (4,923) (5,688)
------------- ------------- ---------- ---------
Finance expense (31) (9) (472) (512)
------------- ------------- ---------- ---------
Loss after taxation (584) (306) (6,070) (6,960)
------------- ------------- ---------- ---------
Additions to non-current
assets 18,928 - 72 19,000
------------- ------------- ---------- ---------
Total assets 34,687 973 19,088 54,748
------------- ------------- ---------- ---------
Total liabilities (14,384) (158) (1,246) (15,788)
------------- ------------- ---------- ---------
Net assets 18,792 680 19,488 38,960
------------- ------------- ---------- ---------
31 December 2020
Exploration Corporate Total
and Appraisal
US$000 US$000 US$000
--------------- ---------- ---------
Share based payments - (222) (222)
--------------- ---------- ---------
Loss on disposal of inventory (524) - (524)
--------------- ---------- ---------
Impairment of exploration asset (66,666) - (66,666)
--------------- ---------- ---------
Administrative expenses (182) (3,496) (3,678)
--------------- ---------- ---------
Finance income - 543 543
--------------- ---------- ---------
Finance expense - (72) (72)
--------------- ---------- ---------
Tax expense - (1) (1)
--------------- ---------- ---------
Loss after taxation (67,372) (3,248) (70,620)
--------------- ---------- ---------
Additions to non-current assets 1,224 8 1,232
--------------- ---------- ---------
Total assets 12,822 5,249 18,071
--------------- ---------- ---------
Total liabilities (366) (1,543) (1,909)
--------------- ---------- ---------
Net assets 12,456 3,706 16,162
--------------- ---------- ---------
4 Loss from operations
31 December 31 December
2021 2020
US$000 US$000
------------ ------------
Loss from operations is stated after
charging:
------------ ------------
Loss on disposal of inventory - 524
------------ ------------
Impairment of exploration asset - 66,666
------------ ------------
Depreciation of property, plant and equipment 31 59
------------ ------------
Depreciation of Right of Use asset 327 328
------------ ------------
Share based payments - Long Term Incentive
Scheme 533 200
------------ ------------
Share based payments - Restricted Share
Unit Scheme 142 22
------------ ------------
Share based payments - deferred consideration 85 -
------------ ------------
Auditors' remuneration:
------------ ------------
Fees payable to the Company's Auditors
for the audit of the Company's annual
accounts 84 60
------------ ------------
Audit of the Company's subsidiaries pursuant
to legislation 17 15
------------ ------------
Total payable 101 75
------------ ------------
5 Employment costs
Employees 31 December 31 December
2021 2020
US$000 US$000
------------ ------------
Wages and salaries 1,095 1,444
------------ ------------
Payments in lieu of notice / compromise
payments - 487
------------ ------------
Pension costs 62 94
------------ ------------
Share based payments 170 156
------------ ------------
Sub-total 1,327 2,181
------------ ------------
Capitalised to exploration costs (656) (773)
------------ ------------
Total 671 1,408
------------ ------------
Key management personnel 31 December 31 December
2021 2020
US$000 US$000
------------ ------------
Wages, salaries and fees 1,574 916
------------ ------------
Payment in lieu of notice - 468
------------ ------------
Social security costs 199 179
------------ ------------
Pension costs 46 18
------------ ------------
Benefits 6 -
------------ ------------
Share based payments 505 66
------------ ------------
Sub-total 2,330 1,647
------------ ------------
Capitalised to exploration costs (365) (119)
------------ ------------
Total 1,965 1,528
------------ ------------
The Directors are the key management personnel of the Group.
Details of the Directors' emoluments and interest in shares are
shown in the Directors' Remuneration Report.
6 Finance income and expense
Finance income 31 December 31 December
2021 2020
US$000 US$000
------------- ------------
Foreign exchange gain - 518
------------- ------------
Bank interest receivable - 25
------------- ------------
Total - 543
------------- ------------
Finance expense 31 December 31 December
2021 2020
US$000 US$000
------------ ------------
Foreign exchange loss 466 -
------------ ------------
Finance expense on lease 46 72
------------ ------------
Total 512 72
------------ ------------
7 Investments
The Company's wholly owned subsidiary undertakings at 31
December 2021 and 31 December 2020, excluding dormant entities,
were:
Subsidiary undertaking Principal activity Country of incorporation
Chariot Oil & Gas Investments Holding company Guernsey
(Namibia) Limited
------------------------ -------------------------
Chariot Oil & Gas Investments Oil and gas exploration Guernsey
(Morocco) Limited
------------------------ -------------------------
Chariot Oil and Gas Statistics Service company UK
Limited
------------------------ -------------------------
Enigma Oil & Gas Exploration Oil and gas exploration Namibia
(Proprietary) Limited(1)
------------------------ -------------------------
Chariot Oil & Gas Investments Holding company Guernsey
(Brazil) Limited
------------------------ -------------------------
Chariot Brasil Petroleo e Oil and gas exploration Brazil
Gas Ltda
------------------------ -------------------------
Chariot Oil & Gas Finance Service company Guernsey
(Brazil) Limited(1)
------------------------ -------------------------
Chariot Oil & Gas Holdings Oil and gas exploration UK
(Morocco) Limited
------------------------ -------------------------
Chariot Rissana Limited Oil and gas exploration UK
------------------------ -------------------------
Chariot Transitional Power Holding company UK
Limited
------------------------ -------------------------
AEMP Essakane Solar SAS(1) Holding company France
------------------------ -------------------------
Africa Energy Management Platform(1) Service company Mauritius
------------------------ -------------------------
(1) Indirect shareholding of the Company.
8 Taxation
The Company is tax resident in the UK, however no tax charge
arises due to taxable losses for the year (31 December 2020:
US$Nil).
No taxation charge arises in Morocco or the group subsidiaries
as they have recorded taxable losses for the year (31 December 2020
in Brazil: US$1,000)
There was no deferred tax charge or credit in either period
presented.
Factors affecting the tax charge for the current year
The reasons for the difference between the actual tax charge for
the year and the standard rate of corporation tax in the UK applied
to losses for the year are as follows:
31 December 31 December
2021 2020
US$000 US$000
------------ ------------
Tax reconciliation
------------ ------------
Loss on ordinary activities for the
year before tax (6,960) (70,619)
------------ ------------
Loss on ordinary activities at the
standard rate of corporation tax in
the UK of 19% (31 December 2020: 19%) (1,322) (13,418)
------------ ------------
Non-deductible expenses 212 12,882
------------ ------------
Difference in tax rates in other jurisdictions - -
------------ ------------
Deferred tax effect not recognised 1,110 537
------------ ------------
Total taxation charge - 1
------------ ------------
The Company had tax losses carried forward on which no deferred
tax asset is recognised. Deferred tax not recognised in respect of
losses carried forward total US$8.7 million (31 December 2020:
US$7.6 million). Deferred tax assets were not recognised as there
is uncertainty regarding the timing of future profits against which
these assets could be utilised.
9 Loss per share
The calculation of basic loss per Ordinary share is based on a
loss of US$6,960,000 (31 December 2020: loss of US$70,620,000) and
on 519,854,783 Ordinary shares (31 December 2020: 379,349,854)
being the weighted average number of Ordinary shares in issue
during the year. Potentially dilutive share awards are detailed in
note 21, however these do not have any dilutive impact as the Group
reported a loss for the year, consequently a separate diluted loss
per share has not been presented.
10 Exploration and evaluation assets
31 December 2021 31 December 2020
US$000 US$000
----------------- -----------------
Net book value brought forward 12,822 78,264
----------------- -----------------
Additions 18,928 1,224
----------------- -----------------
Impairment - (66,666)
----------------- -----------------
Net book value carried forward 31,750 12,822
----------------- -----------------
As at 31 December 2021 the net book value of the Moroccan
geographic area is US$31.8 million (31 December 2020: US$12.8
million).
In the prior year the activities in Namibia and Brazil were
assessed as non-core with substantive expenditure not planned in
the near term, and as such full impairments were recorded against
each respective geographic area.
11 Business Combination
On 25 June 2021 the Company completed the acquisition of the
business of Africa Energy Management Platform ("AEMP") including
the related 10% holding in the Essakane project. AEMP is a
renewable and hybrid energy project developer with an ongoing
strategic partnership with Total Eren, a leading global player in
renewable energy, and qualifies as a business as defined in IFRS 3.
AEMP was acquired as an extension of the updated strategy to have a
positive impact on the environment, the countries and the
communities in which the Company operates.
Consideration and fair value of assets and liabilities
acquired
As initial consideration for the acquisition the Company paid
US$0.1 million in cash and issued 9,196,926 new ordinary shares at
a value of US$0.7 million. Deferred consideration representing
1,982,096 new ordinary shares is payable dependent on certain
project pipeline targets being met, which has been recognized in
equity. The consideration shares were valued at US$0.07 (5.16p)
being the close price on the day preceding completion of the
acquisition.
At acquisition, total identifiable assets and liabilities
assumed were US$0.5 million, the majority of which was attributable
to the 10% project equity held in the operational Essakane power
project which was recognised at fair value based on assessment of
the underlying cashflows. The balance of the consideration of
US$0.4 million has been allocated to goodwill. None of the goodwill
is expected to be deductible for income tax purposes. No impairment
of the investment in power projects or goodwill was identified in
the period from acquisition to 31 December 2021. If the deal had
been completed at the start of 2021 the impact on revenue and
profit of the combined Group would be less than US$10,000.
The amounts recognized in respect of the identified assets
acquired and liabilities assumed are set out in the table
below.
25 June 2021
US$000
-------------
Investment in power projects 450
-------------
Trade receivables 5
-------------
Cash 69
-------------
Trade payables (12)
-------------
Total identifiable assets acquired and liabilities assumed 512
-------------
Goodwill 380
-------------
Total consideration 892
-------------
Satisfied by:
-------------
Cash 90
-------------
New ordinary shares 660
-------------
Deferred consideration payable in shares to be issued 142
-------------
Total consideration transferred 892
-------------
Contingent payments
Further contingent payments representing a maximum of 3,964,192
new ordinary shares are payable to key members of the AEMP team
dependent on their retention and certain project pipeline targets
being met and will be recognised as share based payments in the
Consolidated Statement of Comprehensive Income over the retention
period. See note 21 for further details.
12 Property, plant and equipment
Fixtures, Fixtures,
fittings and fittings
equipment and equipment
31 December 31 December
2021 2020
-------------- ---------------
US$000 US$000
-------------- ---------------
Cost
-------------- ---------------
Brought forward 1,356 1,348
-------------- ---------------
Additions 72 8
-------------- ---------------
Disposals - -
-------------- ---------------
Carried forward 1,428 1,356
-------------- ---------------
Depreciation
-------------- ---------------
Brought forward 1,313 1,254
-------------- ---------------
Charge 31 59
-------------- ---------------
Carried forward 1,344 1,313
-------------- ---------------
Net book value brought forward 43 94
-------------- ---------------
Net book value carried forward 84 43
-------------- ---------------
13 Trade and other receivables
31 December 31 December
2021 2020
US$000 US$000
------------ ------------
Other receivables and prepayments 1,167 811
------------ ------------
The fair value of trade and other receivables is equal to their
book value.
14 Inventory
31 December 31 December
2021 2020
US$000 US$000
------------ ------------
Wellheads and casing 1,183 -
------------ ------------
Remaining items of inventory from earlier drilling campaigns
were disposed of in 2020 resulting in a loss on disposal of US$0.5
million.
15 Cash and cash equivalents
31 December 31 December
2021 2020
Analysis by currency US$000 US$000
------------ ------------
US Dollar 15,567 1,844
------------ ------------
Euro 135 -
------------ ------------
Sterling 3,130 1,815
------------ ------------
Moroccan Dirham 538 -
------------ ------------
Other 36 81
------------ ------------
19,406 3,740
------------ ------------
As at 31 December 2021 and 31 December 2020 the US Dollar and
Sterling cash is held in UK and Guernsey bank accounts. All other
cash balances are held in the relevant country of operation.
As at 31 December 2021, the cash balance of US$19.4 million (31
December 2020: US$3.7 million) contains the following cash deposits
that are secured against bank guarantees given in respect of
exploration work to be carried out:
31 December 31 December
2021 2020
US$000 US$000
------------ ------------
Moroccan licences 5,350 500
------------ ------------
5,350 500
------------ ------------
The funds are freely transferable but alternative collateral
would need to be put in place to replace the cash security.
16 Leases
The lease relates to the UK office.
Right-of-use asset:
31 December 2021 31 December 2020
US$000 US$000
----------------- -----------------
Brought forward 655 983
----------------- -----------------
Depreciation (327) (328)
----------------- -----------------
Carried forward 328 655
----------------- -----------------
Lease liability:
31 December 2021 31 December 2020
US$000 US$000
----------------- -----------------
Current 430 409
----------------- -----------------
Non-current - 440
----------------- -----------------
Total lease liability 430 849
----------------- -----------------
The maturity analysis of the lease liability at 31 December 2021
is as follows:
31 December 2021 31 December 2020
US$000 US$000
----------------- -----------------
Maturity analysis - contractual undiscounted cash flows
----------------- -----------------
Less than one year 453 454
----------------- -----------------
Between one and two years - 453
----------------- -----------------
Between two and three years - -
----------------- -----------------
Total undiscounted lease liabilities 453 907
----------------- -----------------
Effect of interest (23) (58)
----------------- -----------------
Total lease liability 430 849
----------------- -----------------
17 Trade and other payables
31 December 31 December
2021 2020
US$000 US$000
------------ ------------
Trade payables 9,470 816
------------ ------------
Accruals 5,888 244
------------ ------------
15,358 1,060
------------ ------------
The fair value of trade and other payables is equal to their
book value.
18 Share capital
Allotted, called up and fully paid
31 December 31 December 31 December 31 December
2021 2021 2020 2020
------------ ------------ ------------ ------------
Number US$000 Number US$000
------------ ------------ ------------ ------------
Ordinary
shares of
1p each(1) 759,587,023 11,696 388,367,946 6,549
------------ ------------ ------------ ------------
1. The authorised and initially allotted and issued share
capital on admission (19 May 2008) has been translated at the
historic rate of US$GBP of 1.995. The shares issued since admission
have been translated at the date of issue, or, in the case of share
awards, the date of grant and not subsequently retranslated.
Details of the Ordinary shares issued are in the table
below:
Date Description Price No. of shares
US$
31 December
2019 367,532,909
------ --------------
27 April 2020 Issue of share award 0.18 463,768
------------------------------------ ------ --------------
27 April 2020 Issue of share award 0.42 133,334
------------------------------------ ------ --------------
27 April 2020 Issue of share award 0.53 154,285
------------------------------------ ------ --------------
27 April 2020 Issue of share award 4.38 42,000
------------------------------------ ------ --------------
27 April 2020 Issue of share award 0.50 913,822
------------------------------------ ------ --------------
27 April 2020 Issue of share award 0.33 700,000
------------------------------------ ------ --------------
27 April 2020 Issue of share award 0.39 937,500
------------------------------------ ------ --------------
27 April 2020 Issue of share award 0.12 1,352,875
------------------------------------ ------ --------------
27 April 2020 Issue of share award 0.20 1,369,541
------------------------------------ ------ --------------
27 April 2020 Issue of share award 0.05 864,134
------------------------------------ ------ --------------
27 April 2020 Issue of share award 0.02 2,958,329
------------------------------------ ------ --------------
27 April 2020 Issue of share award 0.11 278,082
------------------------------------ ------ --------------
27 April 2020 Issue of share award 0.19 1,168,142
------------------------------------ ------ --------------
27 July 2020 Issue of share award 0.39 411,011
------------------------------------ ------ --------------
27 July 2020 Issue of share award 0.15 411,011
------------------------------------ ------ --------------
27 July 2020 Issue of share award 0.07 1,564,286
------------------------------------ ------ --------------
27 July 2020 Issue of share award 0.10 1,318,841
------------------------------------ ------ --------------
27 July 2020 Issue of share award 0.20 1,825,000
------------------------------------ ------ --------------
27 July 2020 Issue of share award 0.16 1,495,693
------------------------------------ ------ --------------
27 July 2020 Issue of share award 0.03 2,473,383
------------------------------------ ------ --------------
31 December
2020 388,367,946
------ --------------
Issue of initial consideration
25 June 2021 shares for acquisition of AEMP 0.07 9,196,926
------------------------------------ ------ --------------
Issue of shares at GBP0.055 in
Placing, Subscription, Open Offer
25 June 2021 and fees 0.08 238,512,856
------------------------------------ ------ --------------
Issue of shares at GBP0.055 in
Placing, Subscription, Open Offer
19 July 2021 and fees 0.08 645,351
------------------------------------ ------ --------------
15 December Issue of shares at GBP0.07 in
2021 Placing, Subscription and fees 0.09 101,639,842
------------------------------------ ------ --------------
22 December Issue of shares at GBP0.07 in
2021 Open Offer 0.09 21,224,102
------------------------------------ ------ --------------
31 December
2021 759,587,023
------ --------------
19 Related party transactions
Key management personnel comprises the Directors and details of
their remuneration are set out in note 5 and the Directors'
Remuneration Report.
Magna Capital LDA (of which Adonis Pouroulis, Acting CEO, has a
substantial interest), underwrote an equity fundraising in June
2021 to ensure that the total fundraising equated to approximately
US$23 million. The underwriting commitment was fulfilled by
subscription of shares after the balance sheet date and the Company
received proceeds totalling US$5 million, as detailed in note 23.
The underwriting commitment constitutes a related party
transaction.
Kinsella Consulting Limited, a company of which Adonis Pouroulis
is a Director, incurred costs on behalf of Chariot Ltd for which it
was reimbursed during the year of US$8,813 (31 December 2020:
US$Nil). The amount outstanding as at 31 December 2021 was US$Nil
(31 December 2020: US$Nil).
There were no related party transactions during the year ended
31 December 2020.
20 Financial instruments
The Board of Directors determine, as required, the degree to
which it is appropriate to use financial instruments or other
hedging contracts or techniques to mitigate risk. Throughout the
year ending 31 December 2021, no trading in financial instruments
was undertaken (31 December 2020: US$Nil). There is no material
difference between the book value and fair value of the Group cash
balances, short-term receivables and payables.
Market risk
Market risk arises from the Group's use of interest bearing and
foreign currency financial instruments. It is the risk that future
cash flows of a financial instrument will fluctuate because of
changes in interest rates (interest rate risk) and foreign exchange
rates (currency risk). Throughout the year, the Group has held
surplus funds on deposit, principally with its main relationship
bank Barclays, on fixed short-term deposits. The credit ratings of
the main relationship bank the Group holds cash with do not fall
below A or equivalent. The Group does not undertake any form of
speculation on long term interest rates or currency movements,
therefore it manages market risk by maintaining a short-term
investment horizon and placing funds on deposit to optimise short
term yields where possible but, moreover, to ensure that it always
has sufficient cash resources to meet payables and other working
capital requirements when necessary. As such, market risk is not
viewed as a significant risk to the Group. The Directors have not
disclosed the impact of interest rate sensitivity analysis on the
Group's financial assets and liabilities at the year-end as the
risk is not deemed to be material.
This transactional risk is managed by the Group holding the
majority of its funds in US Dollars to recognise that US Dollars is
the trading currency of the industry, with an appropriate balance
maintained in Sterling, Euro and Moroccan Dirham to meet other
non-US Dollar industry costs and ongoing corporate and overhead
commitments.
At the year end, the Group had cash balances of US$19.4 million
(31 December 2020: US$3.7 million) as detailed in note 15.
Other than the non-US Dollar cash balances described in note 15,
no other material financial instrument is denominated in a currency
other than US Dollars. A 10% adverse movement in exchange rates
would lead to a foreign exchange loss of US$380,000 and a 10%
favourable movement in exchange rates would lead to a corresponding
gain; the effect on net assets would be the same as the effect on
profits (31 December 2020: US$190,000).
Capital
In managing its capital, the Group's primary objective is to
maintain a sufficient funding base to enable it to meet its working
capital and strategic investment needs. The Group currently holds
sufficient capital to meet its ongoing needs for at least the next
12 months.
Liquidity risk
The Group's practice is to regularly review cash needs and to
place excess funds on fixed term deposits. This process enables the
Group to optimise the yield on its cash resources whilst ensuring
that it always has sufficient liquidity to meet payables and other
working capital requirements when these become due.
The Group has sufficient funds to continue operations for the
forthcoming year and has no perceived liquidity risk.
Credit risk
The Group's policy is to perform appropriate due diligence on
any party with whom it intends to enter into a contractual
arrangement. Where this involves credit risk, the Group will put in
place measures that it has assessed as prudent to mitigate the risk
of default by the other party. This could consist of instruments
such as bank guarantees and parent company guarantees.
As such, the Group has not put in place any particular credit
risk measures in this instance as the Directors view the risk of
default on any payments due from the joint venture partner as being
very low.
21 Share based payments
Long Term Incentive Scheme ("LTIP")
The plan provides for the awarding of shares to employees and
Directors for nil consideration. The award will lapse if an
employee or Director leaves employment.
Shares granted when an individual is an employee will vest in
equal instalments over a three year period from the grant date and
shares granted when an individual is a Director or otherwise
specified will vest three years from the end of the year or period
the period to which the award relates.
The Group recognised a charge under the plan for the year to 31
December 2021 of US$533,000 (31 December 2020: US$200,000).
The following table sets out details of all outstanding share
awards under the LTIP:
31 December 2021 31 December
2020
Number of awards Number of awards
----------------- -----------------
Outstanding at beginning of the
year 7,401,780 25,000,645
----------------- -----------------
Granted during the year 20,841,085 5,431,712
----------------- -----------------
Shares issued for no consideration
during the year - (20,835,037)
----------------- -----------------
Lapsed during the year - (2,195,540)
----------------- -----------------
Outstanding at the end of the
year 28,242,865 7,401,780
----------------- -----------------
Exercisable at the end of the
year 7,379,562 6,044,990
----------------- -----------------
Non-Executive Directors' Restricted Share Unit Scheme
("RSU")
The plan provides for the awarding of shares to Non-Executive
Directors for nil consideration. An award can be Standalone or
Matching.
Standalone share awards are one-off awards to Non-Executive
Directors which will vest in equal instalments over a three year
period and will lapse if not exercised within a fixed period on
stepping down from the Board.
Matching share awards will be granted equal to the number of
existing Chariot shares purchased by the Non-Executive Director in
each calendar year capped at the value of their gross annual fees
for that year. The shares will vest in equal instalments over a
three year period and will lapse if not exercised prior to stepping
down from the Board or if the original purchased shares are sold
prior to the vesting of the relevant Matching award. Any potential
Matching awards not granted in a calendar year shall be forfeited
and shall not roll over to subsequent years.
The Group recognised a charge under the plan for the year to 31
December 2021 of US$142,000 (31 December 2020: US$22,000).
The following table sets out details of all outstanding share
awards under the RSU:
31 December 31 December
2021 2020
Number of awards Number of awards
----------------- -----------------
Outstanding at beginning of the
year 2,839,875 2,839,875
----------------- -----------------
Granted during the year 5,915,281 -
----------------- -----------------
Outstanding at the end of the
year 8,755,156 2,839,875
----------------- -----------------
Exercisable at the end of the
year 2,623,568 2,407,860
----------------- -----------------
Post-acquisition share-based payment charge
Contingent payments representing a maximum of 3,964,192 new
ordinary shares are payable to key members of the AEMP team
dependent on their retention and certain project pipeline targets
being met and will be recognised as share based payments in the
Consolidated Statement of Comprehensive Income over the retention
period. The Group recognised a charge of US$85,000 in the year to
31 December 2021.
22 Contingent liabilities
From 30 December 2011 the Namibian tax authorities introduced a
withholding tax of 25% on all services provided by non-Namibian
entities which are received and paid for by Namibian residents.
From 30 December 2015 the withholding tax was reduced to 10%. As at
31 December 2021, based upon independent legal and tax opinions,
the Group has no withholding tax liability (31 December 2020:
US$Nil). Any subsequent exposure to Namibian withholding tax will
be determined by how the relevant legislation evolves in the future
and the contracting strategy of the Group.
23 Events after the balance sheet date
The Directors consider these events to be non-adjusting post
balance sheet events.
a) Significant gas discovery at Anchois-2 well
On 10 January 2022 the Company announced a significant gas
discovery at the Anchois-2 gas appraisal and exploration well in
the Lixus Offshore licence, Morocco. On 31 March 2022 the Company
announced an upgrade to the net gas pay estimates previously
announced and confirmed excellent quality gas with further analysis
ongoing to understand the positive impact on gas resources.
b) Issue of Underwriting Shares (the "Underwriting Commitment")
Magna Capital LDA (of which Adonis Pouroulis, Acting CEO, has a
substantial interest), underwrote the June 2021 equity fundraising
to ensure the total fundraising equated to approximately US$23
million. Accordingly, 33,742,396 new Ordinary shares were admitted
on 31 January 2022 and 33,742,396 new Ordinary shares were admitted
on 3 March 2022 and the Company received proceeds totalling US$5
million. The Underwriting Commitment constitutes a related party
transaction.
c) Award of Rissana Offshore Licence ("Rissana")
On 28 February 2022 the Company announced that a wholly owned
subsidiary of Chariot Ltd had been formally awarded a 75% interest
and operatorship of the Rissana licence, Morocco in partnership
with the Office National des Hydrocarbures et des Mines ("ONHYM")
which holds a 25% carried interest.
d) Placing, subscription and open offer (the "Fundraising")
On 10 June 2022 the Company announced the approval by
shareholders at a General Meeting of an equity Fundraising for
130,930,606 new Ordinary Shares at a price of 18 pence per share.
The new Ordinary Shares were admitted and the Company received
gross proceeds totalling US$29.5 million.
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END
FR SEFFAFEESEIM
(END) Dow Jones Newswires
June 22, 2022 02:00 ET (06:00 GMT)
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