Chariot Limited (AIM: CHAR): Imminent partner in Morocco
• The US$2.7 mm cash position at the end of June is in line with our expectations.• Although inflation across the industry and rig availability had complicated and delayed the finalization of a farm-in agreement for Anchois in Morocco, negotiations on partnering are in the final stages. A partner could be announced very soon.
• Progress has been made across the portfolio. Onshore Morocco, permitting is under way with drilling now expected to start in early 2024 with up to four wells. Prospects with 74 bcf prospective resources have been mapped across the licences. Drilling success would allow the company to start production in 2024.
• We re-iterate our target price of £0.50 per share.
Transitional Power and Green Hydrogen
Construction at the Tharisa power project is moving closer, the environmental authorisation has been granted and an EPC contractor identified. Etana (25% Chariot) has been involved in the first renewable electricity transaction in South Africa whereby solar energy generated is bought and sold between private parties, using the existing grid to transport power from where it is generated to the end-user. Etana has been selected as a trading partner by the city of Cape Town. Trading revenue would boost the profit margin of future electricity sales. The first water desalination project in Djibouti has also started operation. A feasibility study for the Nour project with Total in Mauritania is expected to be completed in 1Q24.
Investment profile unchanged: Value and newsflow
Announcing an industry partner and taking FID at the Anchois project remain the key near-term catalysts and would take our Core NAV to ~£0.60 per share. Each onshore prospect has an unrisked value of £0.02 per share. Our SoP valuation is unchanged at £0.51 per share and includes only two onshore wells with a conservative 50% chance of drilling success.
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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