Chariot Limited (AIM: CHAR): Drilling success onshore Morocco
• The OBA-1 well onshore Morocco has encountered an approximate 70 m gross interval containing elevated resistivities coincident with elevated mud gas readings, indicating potential gas pays, with no water-bearing reservoirs identified.• While the approximate 200 m gross thickness for the reservoirs is in line with pre-drill expectations, the absence of water in the 70 m gross interval is particularly encouraging and could suggest larger than expected resources (12 bcf pre drill).
• The well is now expected to be tested in 3Q24. The well would then become a producer. Previous wells in the area have been tested at 1.5-2.0 mmcf/d. If the gas is sold at CNG at the well head, minimal development capex would be required.
• We view this result as very important as this changes the risk profile of Chariot that would become a producing company rather than an explorer.
• There is also additional resource upside (~8 bcf) in the area and additional wells can be drilled to increase production and reserves.
• The key near-term news flow remains the Anchois East well expected to spud in August.
• As we have increased the chance of development of the 20 bcf associated with Dartois from 35% to 75%, we have increased our ReNAV by £0.02 per share. We reiterate our target price of £0.50 per share in line with our ReNAV.
Upcoming newsflow
Anchois East is expected to spud in August. A drilling success could increase the size of Anchois to over 1 tcf (300 bcf net to Chariot). Our overall unrisked NAV for Anchois, including Anchois East Footwall and Anchois East North Flank is £0.42 per share. This represents 4.5 times the current share price.
Valuation
Our Core NAV and Sum of the Parts now stand at respectively £0.31 per share (+£0.03 per share) and £0.49 per share (+£0.02 per share).
Chariot Oil & Gas is an independent oil and gas exploration company focused offshore in West Africa with a portfolio of assets located in the under-explored regions of Namibia, Mauritania and Morocco.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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