TIDMCHAR
RNS Number : 1361Z
Chariot Oil & Gas Ld
13 December 2017
13 December 2017
Chariot Oil & Gas Limited
("Chariot", the "Company" or the "Group")
Pre-Close Operational Update
Successful year ahead of high impact exploration programme in
2018
Chariot Oil & Gas Limited (AIM: CHAR), the Atlantic margins
focused oil and gas exploration company, today provides an
operational update prior to its 31 December year end.
Overview
Over the past 12 months Chariot has continued to invest in its
portfolio to capitalise on the current low cost environment. The
Company has evaluated 3D seismic data acquired in 2016 in Brazil
and Namibia, secured a new licence in Morocco and back-in rights in
legacy acreage in Namibia, acquired extensive 2D and 3D seismic
programmes and completed the transfer of operatorship in the Rabat
Deep Permits in Morocco in the lead up to exploration drilling in
Q1 2018. Through this extensive work programme, the Chariot
in-house subsurface team has developed an inventory of drill-ready
prospects with material follow-on potential, and initiated
partnering processes in Namibia and Morocco.
The recent industry downturn has created a number of
opportunities to capture significant cost reductions. Having
previously taken advantage of the low seismic acquisition rates,
Chariot is now focusing on the supply and demand dynamics of the
deepwater drilling rig market. With rig rates at historic lows,
Chariot has initiated a process to analyse how the Company can
benefit from this lower cost environment. Utilising the expertise
of its newly hired drilling manager, Chariot has conducted a
thorough analysis of drilling cost estimates for its key prospects,
feeding this data into the current partnering processes. Chariot
has launched drilling preparations in Morocco and Namibia through
the initiation of Environmental Impact Assessments, long lead items
identification and other operational arrangements. Management
believes that this preparatory work will enable Chariot to avoid
unnecessary delays associated with its plans to drill three wells
in the near term and to capitalise on the current low-cost
environment for drilling.
Chariot continues to apply strict capital discipline and has
reduced its annual cash overhead for the fourth consecutive year.
As a result, the Company has a strong cash position in excess of
licence commitments and remains debt free.
Morocco
In Morocco, Chariot announced the transfer of operatorship to
Eni of the Rabat Deep Offshore Exploration Permits I-VI. The Rabat
Deep partnership will be drilling the RD-1 well using the Saipem
12000 drillship with spud expected in March 2018. The prospect that
this well is targeting, JP-1, has audited gross mean prospective
resources of 768mmbls, which, if successful, will be
transformational for the Company. This well will be closely watched
by the industry as one of the larger prospects likely to be drilled
in the world during 2018. The Rabat Deep Permits have an additional
six leads in the same play which have the potential to be de-risked
by the RD-1 well.
During the year, Chariot was awarded the Kenitra Offshore
Exploration Permit (Chariot, 75% equity and operator), adjacent to
the Rabat Deep and Mohammedia licence areas. Chariot also acquired
both 2D and 3D seismic data over Kenitra and the adjacent
Mohammedia Exploration Permits during 2017 to investigate the
extent of the prospectivity in the Lower Cretaceous play. The
processing of these data has now been completed, and the Company
has started the interpretation programme. The team had previously
matured prospects from 3D data acquired by Chariot in 2014,
including the JP-2 prospect, which has the potential to be
de-risked by the RD-1 well. The Company also identified an
inventory of prospects in the shallower Lower Cretaceous play, and
is targeting the drilling of Kenitra-1 in H1, 2019, which has a
gross mean prospective resource of 464mmbbls as part of a larger
portfolio in the Mohammedia and Kenitra permits totalling 1.5
billion barrels in prospective resources. A partnering process has
been initiated and drilling preparations have begun.
Namibia
In the Central Blocks (2312 and 2412A) offshore Namibia, Chariot
completed the interpretation of the two integrated proprietary 3D
seismic surveys of approximately 6,100km(2) in total. In addition
to the Central Blocks legacy prospect inventory, the Company has
now identified an additional five structural closures and is
targeting the drilling of Prospect S in the second half of 2018.
Prospect S has audited gross mean prospective resources of
459mmbbls which is part of a portfolio of prospects with a resource
in excess of 2.5 billion barrels. The partnering process has been
initiated and drilling preparations are underway.
Also in Namibia, following withdrawal from the Southern Blocks
(2714A and 2714B), Chariot secured an option to back-in for 10%
equity at no cost after exploration drilling in return for which
the Company will facilitate the partnering programme that will be
led by NAMCOR, the Namibian State Oil company.
Brazil
In Brazil, Chariot has completed the evaluation of the
proprietary 3D seismic data across the four Chariot concessions and
identified a large structural prospect with multiple targets which
will be the subject of an independent audit of resource potential.
Once this is completed, the partnering programme on these blocks
will be launched in H1 2018.
The Company continues to evaluate new venture opportunities to
further enhance the value of its portfolio on a case by case
basis.
Larry Bottomley, CEO, commented:
"We have continued to make significant progress throughout the
year, refreshing and de-risking the portfolio by securing a new
licence, delivering an innovative option based on Chariot's
reputation for partnering and continuing to mature all parts of the
portfolio through the acquisition of new data and the evaluation of
data acquired in 2016. We have also continued to apply rigorous
portfolio management and capital discipline, leaving us in a very
strong financial position going forward.
Over the last two years, Chariot has been able to capitalise on
the low cost base for seismic acquisition and processing, and has
consequently been able to mature its portfolio and build a drilling
inventory of potentially transformational prospects. This
readjustment of costs following the oil price fall of 2014 has now
affected the drilling market, and the Company is looking to
capitalise on drilling costs as successfully as we delivered in our
seismic campaigns.
Looking ahead, we are focused on delivering three exploration
wells in the near-term and have established an in-house drilling
team to deliver this programme safely, efficiently and
cost-effectively.
Whilst we have seen some improvement in market conditions, we
remain vigilant and conservative in our forecasting to ensure we
remain well-positioned to deliver on our plans."
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
For further information please contact:
Chariot Oil & Gas Limited
Larry Bottomley, CEO +44 (0)20 7318 0450
finnCap (Nominated Adviser and Joint Broker)
Matt Goode, Christopher Raggett (Corporate Finance)
Emily Morris (Corporate Broking) +44 (0)20 7220 0500
Peel Hunt (Joint Broker)
Richard Crichton, Ross Allister +44 (0)20 7418 8900
Celicourt Communications (Financial PR)
Mark Antelme, Henry Lerwill, Jimmy Lea, +44 (0)207 520 9261
NOTES TO EDITORS
ABOUT CHARIOT
Chariot Oil & Gas Limited is an independent oil and gas
exploration group. It holds licences covering two blocks in
Namibia, three blocks in Morocco and four blocks 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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