Senegal – Mauritania – why does it matter?

I have been asked several times why I care about the worlds largest most recent Senegal oil discovery, or Kosmos world beating Gas discovery in Mauritania.

Ignore country boundaries – it’s rocks that matter! And Chariots acreage is ‘oily’!

From Cairn’s recent 1015 Annual report.

Helios Chariot - Cairn Energy Report - 2015

Cairn, FAR, Conoco – another home run in Senegal – 100% success rate

Just like Kosmos, the Cairn, FAR, Conoco partnership in Senegal has once again had success with the SNE-4 drill – A 100% Success rate! Add this to the 100%  Kosmos /Chevron success and it would appear that Mauritania/Senegal is about to become a highly commercial and prolific Oil and Gas producer. Chariot’s Mauritania acreage is in the oilier North so I am particularly looking forward to the farm-out. Cairn farmed into the Mauritania acreage for $26 million   in 2013 with a subsequent  license extension  which allowed for further analysis such as seabed coring (always a good sign) which has now completed. It’s time to get the statisticians on the case ….. but the chances for Chariot’s Mauritania acreage to hold oil which sits in the same oil fairway, further North, surrounded by oil shows, and ‘oilier’ look very promising indeed. Kosmos have stated they are heading into their Northern Mauritania acreage where they believe the chances of finding oil are much higher.  We are elephant hunting!Helios Chariot - Mauritania - May 2016 - 2

Helios Chariot - Mauritania - May 2016

Helios Chariot - Probability of Successive Oil Well Exploration Success

 

Senegal – FAR/Cairn – More success

More success – here –  and another well to start in a few days!
It’s important because Chariot acreage is in the same fairway .. but oilier..

Chariot – a great week – one of many to come.

Chariot had an outstanding week this week and the Penny has started to drop on its massive transformational potential.

With a free carry announced the week before on Morocco with ENI, in addition to Woodsides involvement,  and then Tullow entering the drilling phase with Pancontinental in nearby Nambia acreage and in the current climate, it sends a massive vote of confidence on both Moroccan and Namibian acreage.  The cash back (to be disclosed) from ENI to Chariot will bolster its already good cash pile. Chariot therefore has a strong cash position,  more cash to come, a free carry – and that’s just the start. The increase in share price has been great – but the market has not yet valued the free carry! yet ….. and that’s a massive opportunity.

The Morocco farm out has, however,  released the pressure valve for long term shareholders a tad, and will play into Larry’s negotiations for further farm-outs. You can bet on it. Larry is a tough negotiator which has been painful at times, but will pay off going forward. (FYI: See here for an idea of potential back costs we are looking at in farm-out negotiations).

The change in share price trend could be seen a few weeks back although I must admit, I thought it was due to the Mauritania and Senegal success of Kosmos and Cairn and their respective partners. Given Kosmos and Cairn have had some of the largest discoveries in the world of both Oil and Gas in the last few years – and Chariot is in the same oil and gas fairway – you have to wonder what Larry will get for the Mauritania acreage! I expect it to be farmed out soon – and I expect more cash. Interestingly, Cairn are also our partner in Mauritania. DYOR and check how  many small AIM oil companies have a significant interest in Mauritanian acreage with its massive upside .. hint – there are only two. Chariot is one of them.

Chariot therefore, in my personal opinion,  has a very realistic chance of getting another RNS in the next 2 quarters for another free carry – and its most likely to be Mauritania. It might also be sooner than we think.

Imagine a situation of an AIM exploration company having two free carries on elephant prospects running simultaneously. Imagine what would happen if Namibia or Brazil then got a free carry and/or cash back. And if Tullow strike oil in Namibia …!!.

Chariot is now the best frontier exploration company on AIM. Period. And I bet Newlands capital think the same. Add to this the reducing free float and it becomes a perfect storm for a sustained trend upwards in share price.

I continue to accumulate – on pull backs – and took a massive chunk in the 4’s and 5’s not so long back. I am sure this was helped by plenty of de-rampers’ with clever sarcastic debating points. Thank you 😉 and  I will keep on accumulating up to £1.

The day traders will come and go – I am more of a long term accumulator investor. I am convinced this will be life changing for those with a similar strategy. You know who you are . Good luck…

Mauritania and Senegal – Success and Share Price

Kosmos now have a 100% success rate in Mauritania. Cairn, despite the India tax situation is looking very strong in price action – it seems to be a classic example of bad news, positive price action pointing to something more interesting. FAR – a ‘tiddler’ now has a very high market capitalization and you have to wonder what it would be with a higher oil price. Chariot now seems to be  moving in the right direction. Buying in the 4’s and fives and upwards is the way to go for me. Latest share price – January to March 18th below – looks like Chariot is about to cross the 200dma and is now above the 20dma.

Helios Chariot - Kosmos - January - 18th March 2016

Kosmos Share Price

Cairn Energy Share Price

Cairn Energy Share Price

Far Ltd Share Price

Far Ltd Share Price

Chariot Oil & Gas Share Price

Chariot Oil & Gas Share Price

Conoco Philips to cut deep water exploration spending.

Conoco and Cairn had a great farm-in to the FAR acreage in Senegal. FAR is a ‘tiddler’ now with a  market capitalization of £152m. If Chariot had similar success in its Mauritania acreage (and it is still early days for FAR with more drills to come in Senegal) then Chariot could easily sit  at approximately 60p per share imo. Far have  stated they are looking for ‘Elephants’ as are we!

The good news from the announcement earlier this year is that the Conoco Phillips CEO is quoted as saying “We have achieved some notable success in our deep water program, particularly in the Gulf of Mexico Lower Tertiary play and offshore Senegal. We are committed to delivering the value we have created from these discoveries, while reducing the number of deep water exploratory prospects we drill in the future.”

This tells me that our Mauritania acreage – analogous so the Senegal acreage – has value. We have acreage in a great frontier region. Roll on the farm-out.

The FAR video mentions that rig rates have more than halved since last year.

Helios Chariot - Conoco Phillips Senegal

 

At 6:11 FAR gets a mention as an outperformer since its oil discovery in Senegal with Cairn and Conoco Phillips.

Mauritania – Sterling Energy

Recorded prior to the Kosmos second discovery, and the recent Cairn Senegal appraisal well success.

“Mauritania is the most exciting, …..with Tullow as partner … up to two wells in the next 18 months starting middle of next year”

Also at 26:45

 

Mauritania – Operators

Not a great deal [of operators in Mauriitania] according to below;

http://www.mauripem.com/english/op_petrol.html

That farm out deal looking a lot more likely now. Nice one Kosmos… Great result.

Chariot - Mauritania - Oil MapPOLL (LSE)