Chariot Limited (AIM: CHAR): High impact well offshore Morocco on track to spud in August
• The FY23 financials were in line with our forecasts.• The high impact Anchois East well continues to be 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.
• Testing of the Dartois discovery onshore Morocco is expected to take place in 3Q24. Subject to the results, first gas could occur in early 2025. Chariot will initially transport its gas to market as CNG. Demand is the area is estimated at 10 mmcf/d.
• Éclair and the adjacent Éclair West closures are follow-on prospects which share the same reservoir system, seismic attribute support and similar burial depths. This group of prospects is estimated to hold 32 bcf gross prospective resources.
• We reiterate our target price of £0.50 per share in line with our ReNAV.
Energy transition portfolio
In March 2024, Chariot announced a strategic review process for the Transitional Power business. This review is expected to be phased. Given the interest received from various financial institutions in Africa, Chariot expects to progress the various projects in the energy transition portfolio with initial funding (~US$50 mm) from some of these institutions. This funding would be at the level of the Transitional Power business subsidiary or at project level (rather than at the top company level) and could include a partial divestment of the relevant subsidiary. This is likely to provide a read through value for the business.
Valuation
Our Core NAV and Sum of the Parts valuation are broadly unchanged at £0.30 per share and £0.50 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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