TIDMCHAR
RNS Number : 6960E
Chariot Oil & Gas Ld
12 February 2015
12 February 2015
Chariot Oil & Gas Limited
("Chariot", the "Company" or the "Group")
Analyst Day Update
Strategically positioned to withstand current market conditions
and take advantage of opportunities
Chariot Oil & Gas Limited (AIM: CHAR), the Atlantic margins
focused oil and gas exploration company, announces that it will be
hosting a presentation today for a group of sell-side analysts.
The event will include an overview of Chariot's portfolio,
during which the team will present the updated February 2015
corporate presentation and the forward programme within the context
of the commentary below:
Strategic Positioning
As detailed in the pre-close update of 17 December 2014, whilst
Chariot is aware of the impact of the recent oil price decline, it
believes that it is in a strong position to not only withstand the
current market conditions, but furthermore take advantage of
opportunities that may arise as a result of the impact on the wider
sector.
The Company holds a diverse portfolio with long-term, low-cost
operated assets, with good commercial terms, which it has de-risked
through partner participation and detailed technical work. Chariot
is debt-free, with a strong cash position (US$53.5 million at 31
December 2014), and is fully funded to carry out all of its
commitments at the same time as continuing to deliver on its
strategy of zero cost exploration in the pursuit of
transformational growth. Furthermore, with its fast follower
positioning, Chariot continues to benefit from further de-risking
its assets through its own technical analysis as well as evaluating
information from third party activities, at no cost to Chariot and
ahead of committing to drilling its own prospects. During the
course of 2015, several wells are expected to be drilled by other
operators in Morocco, Mauritania and Namibia, with ten wells due to
be spud in the Barreirinhas basin, Brazil, in the next three
years.
The Company believes that this position of strength is a result
of its diligent portfolio management, focus on risk mitigation and
capital discipline - all of which it will continue to carry out
throughout 2015 and beyond.
Partnering
Chariot's technical team continues to work hard to mature its
assets towards drilling and has now completed its interpretation of
its proprietary 3D data offshore Mauritania, with four drill-ready
prospects identified, each with over 400mmbbls of gross mean
prospective resources (internal estimates). A dataroom has opened
and an independently audited prospective resources report will be
issued shortly.
In Morocco, following finalised interpretation of the Company's
3D data in H1 2015, a partnering process will commence and an
independent audit on the prospectivity of the Loukos and Mohammedia
licences will be carried out. An audit will also be carried out on
the Rabat Deep licences, where Chariot has prepared its JP-1
prospect for a dataroom, should Woodside choose not to elect to
carry the Company through a well, a decision on which is due by the
end of Q2 2015.
In addition, seismic acquisition programmes are scheduled in
2015 offshore Brazil and Namibia with the aim of de-risking the
Company's portfolio through the maturation of previously mapped
prospectivity on legacy datasets, as well as to identify follow-on
potential in a success case. Ongoing partner discussions regarding
the opportunities in Brazil and Namibia will continue, with any
material updates to be provided to the market accordingly.
Within the context of the current climate, Chariot is aware of
widely publicised cuts in capital expenditure budgets, which may
result in a lower number of dataroom attendees. Whilst this would
mean a smaller pool of possible partners, Chariot has high
potential and high margin assets, and is confident in its
capability to describe the prospectivity within them - as has been
demonstrated by the success in securing partners over the last two
years. Furthermore, Chariot's deep water, high impact portfolio
retains significant upside potential for investors, with the
possibility for transformational growth even at current oil prices.
Chariot's positioning enables it to take advantage of the oil price
cycle and its low cost, long-term commitments are a key factor,
allowing Chariot to retain its competitive stance in partnering
discussions and ensure the best possible terms for the Company.
Additional Opportunities
Given the shift in the oil price and its economic impact across
the sector, Chariot has re-evaluated the cost structures and
associated commercial benefits of previously identified new venture
opportunities. The new licence applied for in July 2014 remains
technically attractive, however the Company has elected not to
pursue this asset within the current business environment. Chariot
still intends to use US$7.5 million of the funds raised in 2014 to
pursue the Company's new venture strategy and continues to screen
and evaluate several lower risk opportunities, including those that
may now be distressed or were otherwise previously unobtainable, in
order to expose itself to a range of potentially value-accretive
assets.
Funding
The Group remains debt free and as at 31 December 2014 it held
cash balances of US$53.5 million (unaudited) compared with US$37.5
million (unaudited) as at 30 June 2014 and US$56.7 million as at 31
December 2013. In addition, all contractual licence commitments are
fully funded.
In August 2014, the Company successfully raised a net c.US$14
million by a share placing and in December 2014, the completion of
the 25% farm-out of Rabat Deep in Morocco resulted in the receipt
of a further US$10.3 million from Woodside. Further funds to carry
Chariot on future work up to an agreed cap, including a multibeam
side-scan sonar and seabed coring survey, are anticipated to be
received from Woodside in 2015. An additional c.US$1.5 million is
also expected following formal approval by the Brazilian
authorities of the farm-out of 25% of the Brazilian blocks to
AziLat.
As at 31 December 2014, US$13.4 million of the Company's cash
balances were held as security against licence work commitments and
these guarantees will significantly decrease in 2016 on the
completion of the Brazilian 3D seismic processing.
Net cash utilisation of US$3.2 million in the year to 31
December 2014 comprised of:
-- US$10.7 million in Morocco on 3D seismic acquisition and
processing offset by the receipt of US$10.3 million of farm-out
proceeds from Woodside;
-- US$4.0 million on 2D seismic acquisition, processing and G&G in Namibia;
-- US$4.2 million on capital gains tax and G&G in Mauritania and G&G in Brazil;
-- US$8.1 million on other G&G and G&A;
-- US$0.5 million of other costs and net finance/foreign exchange charges; and
-- The receipt of c.US$14 million (net of expenses) of placing proceeds.
During 2015, Chariot expects to spend a net c.US$26.1 million
further developing its portfolio as follows:
-- US$2.0 million in Morocco on the 3D seismic programme and on further studies;
-- US$9.8 million in Brazil on the 800km(2) 3D seismic acquisition, processing and other G&G;
-- US$5.8m in Namibia which primarily relates to the acquisition of 2D seismic;
-- US$2.0 million in Mauritania relating to G&G;
-- US$7.0 million on G&A;
-- US$1.5 million on business development and other costs; and
-- The Company also expects to receive farm-out proceeds of
c.US$2.0 million being amounts due from Woodside and AziLat.
There will be no further new information released during the
event and a pre-recorded audiocast of the Company's corporate
presentation will be available on the website from 10am today.
For further information
please contact:
Chariot Oil & Gas Limited
Larry Bottomley, CEO +44 (0)20 7318 0450
GMP Securities (Joint
Broker)
Rob Collins, Emily Morris +44 (0)20 7647 2835
Jefferies International
Limited (Joint Broker)
Chris Zeal, Max Jones +44 (0)20 7029 8000
Finncap (Nominated Adviser)
Matt Goode, Christopher
Raggett +44 (0)20 7220 0500
EMC2 Advisory
Natalia Erikssen +44 (0)78 0944 0929
NOTES TO EDITORS
About Chariot
Chariot Oil & Gas Limited is an independent oil and gas
exploration group. It holds licences covering four blocks in
Namibia, one block in Mauritania, three blocks in Morocco and four
licences in the Barreirinhas Basin offshore Brazil. All of these
blocks are currently in the exploration phase.
The ordinary shares of Chariot Oil & Gas Limited are
admitted to trading on the AIM Market of the London Stock Exchange
under the symbol 'CHAR'.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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