Chariot Limited (AIM: CHAR): Multiple farm-in offers for Anchois received from E&P companies
• Cash at the end of December was in line with our expectations (~US$12 mm).• The highlight of the announcement is about Chariot having received multiple offers to acquire a stake in the Anchois project in Morocco from multiple companies including significantly larger E&Ps.
• We understand that some of these potential partners could fund the development of the project from their balance sheets.
• These offers would leave Chariot with a material stake in the project and would include an important upfront cash consideration (on top of a carry). Chariot has already spent ~US$50 mm in the project and expects to recover a significant amount. The combination of the carry and the upfront payment reduce materially the risk of any significant dilution for Chariot shareholders.
• The key criteria for selecting a preferred partner include (in order of importance) (1) the capability of the partner to fund and deliver the project rapidly, (2) the stake in Anchois that Chariot would keep and (3) the amount of the upfront cash payment.
• The preferred partner is expected to be announced soon. We anticipate that this would be a re-rating event.
• We re-iterate our target price of £0.55 per share.
What about the rest of the portfolio?
Progress has been made on all the non hydrocarbon project. Construction at the Tharisa project in South Africa is expected to start around YE23. Chariot is looking for a partner for its power business that could provide an external valuation for these assets. The focus of the green hydrogen project in Mauritania is to secure offtake partners, which could provide further validation of the project. Chariot is initially looking at green steel and green ammonia.
Value and newsflow
Finalising gas sales agreements (and announcing the prices at which the gas would be sold), announcing an industry partner and taking FID at the Anchois project remain the key near-term catalysts and would take our Core NAV to ~£0.65 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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.