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Chariot Oil & Gas Limited - H1 2018 Results


H1 2018 Results

  • Drilling Campaign commenced at zero cost with the drilling of the Rabat Deep 1 dry well, Morocco.
  • Ocean Rig Poseidon contracted to drill Prospect S (459mmbbls gross mean prospective resource), Namibia in Q4 2018.
  • Placing and open offer raised net US$16.5 million in Q1 2018.
  • 30 June 2018 cash position robust at US$28.4 million, no debt and all commitments fully funded.
  • Back-in option for between 10% and 20% secured with Shell in Block C-19, Mauritania.

Chariot Oil & Gas Limited (AIM: CHAR), the Atlantic margins focused oil and gas exploration company, today announces its unaudited interim results for the six-month period ended 30 June 2018.

 

Highlights during and post-period:

Accelerating the Portfolio at Low Cost

  • Drilling campaign initiated with the Rabat Deep 1 well, Morocco, targeting the JP-1 prospect; safely drilled at zero cost to Chariot to a total depth of 3,180m in Q1 2018.
  • No hydrocarbon accumulation was encountered but a thick top seal and tight, fractured carbonates in the primary Middle Jurassic target were penetrated with minor oil and gas shows. Geochemistry indicates migration from a younger source which is likely to be Cretaceous while Upper Jurassic reservoir quality sandstones and effective seal were encountered which supports the key play elements of the prospects in Mohammedia and Kenitra.
  • Second well, targeting Prospect S, offshore Namibia, fully funded and due to spud Q4 2018.
  • Extensive 2D and 3D seismic campaign processing and interpretation complete across the portfolio with each asset containing material prospects, follow-on potential and large running room.

Robust Financial Positioning

  • Placing and open offer raised net US$16.5 million in Q1 2018 – resulting in a cash balance of US$28.4 million as at 30 June 2018 with no debt.
  • Cash and liquidity significantly exceed work programme commitments.
  • Successful leveraging of industry downturn to negotiate favourable rig rates with the Ocean Rig Poseidon drill ship, contracted to drill Prospect S.
  • Annual cash overheads remain tightly controlled, with 2018 on track to be sub US$5 million. 

Portfolio Outlook

  • Seeking to build and mature the portfolio to deliver further funded drilling inventory - seismic analysis complete in Namibia, Brazil and Morocco.

Partnering

  • Aim to partner across the portfolio to release funds for further drilling exploration and new ventures -  Datarooms open on priority prospects in Namibia, Brazil and Morocco.

Drilling

  • Looking to deliver transformational value through safe, efficient and cost effective drilling operations:

Namibia:

o   Prospect S, due to be drilled Q4 2018 by the Ocean Rig Poseidon, has 459mmbbls of gross mean prospective resource, with a further future potential upside of 2.2Bnbbls in other prospects within the Central Blocks licence.

o   The well will be operated by Chariot, led by the in-house drilling team.

Brazil:

o   Integrated seismic interpretation and Competent Persons Report (“CPR”) completed with a large four-way dip-closed structure identified and a portfolio consisting of seven prospective reservoir targets individually ranging up to 366mmbbls.

o   A single vertical well located at Prospect 1 can penetrate the TP-1, TP-3 and KP-3 stacked targets which have a summed on-licence gross mean prospective resource of 911mmbbls.

Morocco:

o   Integration of Rabat Deep 1 well results with proprietary 3D and 2D seismic datasets over the adjacent Kenitra and Mohammedia licences - new portfolio of prospects and leads identified. CPR initiated.

o   Drilling preparations underway for priority clastic targets (464mmbbls and 350mmbbls gross mean prospective resources respectively).

New Ventures

  • Back-in option secured over the previously held C-19 block, Mauritania, with Shell offering the Company the option to back-in for a working interest of between 10% to 20% equity at a future date.
  • Continue to leverage knowledge of the Atlantic margins to access further new venture opportunities, using in house screening methodology.
  • Looking to prioritise the most value accretive opportunities, both from the existing portfolio and new ventures.

 

Larry Bottomley, CEO of Chariot commented:

“The Chariot team has worked hard to develop and balance the Company's exploration portfolio, focusing on its de-risking strategy and using its technical, commercial and strategic foresight to take advantage of the prevailing business environment. At the same time as maturing the drilling inventory and pursuing our partnering processes on priority prospects, we have focused on progressing our drilling operations to capture the optimum point of the cost cycle. Our participation in the Rabat Deep 1 well in Morocco demonstrated our ability to expose the Company and its shareholders to potentially transformational events at zero cost, and we are pleased to have secured historically low rig rates for the drilling of Prospect S, Namibia, in Q4 2018, following a successful fundraise in March.

Well results from Rabat Deep 1 in Q1 2018 were disappointing, but the information obtained has proven key elements in Chariot's adjacent priority targets, which is anticipated to increase their chance of success and further define prospective resource potential following integrated analysis with proprietary seismic datasets.

The Company is fully funded for all remaining commitments. Datarooms are open across the matured portfolio and we look forward to the drilling of a safe, efficient and cost effective well in Prospect S, which has the potential, in the success case, to realise substantial value and expose shareholders to additional upside from the additional resource in the inventory of prospects within the licence. Concurrently, we will continue refining our broader prospect inventory and remain vigilant to value accretive opportunities.”



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Chariot Oil & GasEarningsResultsMoroccoOffshoreDrillNamibiaBrazil

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