Wooside are looking for acquisitions

Woodside Petroleum (Chariot’s Morocco Partner)  has turned its back on large-scale corporate M&A but will hunt out smaller acquisitions of undeveloped fields as it builds up a bank of resources to drive future growth.

Chief executive Peter Coleman told an investor briefing on Friday that Woodside would focus on acquisitions worth less than $US1 billion.

 

Senegal – Woodside – Buys into Acreage owned by Impact oil and Gas

Woodside Petroleum, Chariot’s Moroccan partner along with ENI,  has further expanded its exploration acreage in Africa with the acquisition of interests in waters off Senegal and Guinea-Bissau, signalling it is very much still in the market for smaller asset deals even as it turns its back on larger corporate …  “This builds on recent acquisitions in Cameroon, Gabon and Morocco [with Chariot ] and reflects our disciplined and strategic approach to studying regional petroleum systems,” … “the company would continue to seek exploration and deepwater petroleum assets that could come onto the market amid the slump in oil prices, but signalled a cooling toward larger corporate deals because of the uncertainty in the market outlook”

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…

Morocco – Farm-out – Rabat Deep – JP1

Excellent News: A free carry on a drill, cash-back etc

Note: The farm out still leaves Chariot with another Moroccan license to farm out in which it holds 75% – Mohammedia  – which could become very valuable if Rabat strikes.

Eni were the guys who recently discovered a ‘supergiant’ gas field – 20tcf off the coast of Egypt. Chariot is in good company with both ENI and Woodside as partners – both have the technical expertise to validate Chariots belief that Rabat is an elephant!

It was not so long ago that Woodside announced that sea bed coring was complete on the Moroccan Rabat acreage – an important piece of information – and an unusual step – in a good way.

Chariot Oil & Gas Limited

(“Chariot”, the “Company” or the “Group”)

Farm Out Agreement with Eni in Rabat Deep Offshore, Morocco

 

·      Eni to acquire 40% equity interest in, and operatorship of, the Rabat Deep Offshore exploration permits I-VI;

·      Eni to carry Chariot in a deepwater well on the JP-1 prospect, to an agreed cap;

·      Eni to carry Chariot for other geological and administrative costs relating to work commitments in the next licence period;

·      Eni to pay a contribution towards Chariot’s investment to date;

·      Funds to be used for continued development of Chariot’s portfolio; and

·      Completion is subject to receipt of Moroccan authorities and partner approvals.

 

Chariot Oil & Gas Limited (AIM: CHAR), the Atlantic margins focused oil and gas exploration company is pleased to announce that its wholly owned subsidiary, Chariot Oil & Gas Investments (Morocco) Ltd., has signed a farm-out agreement with a wholly owned subsidiary of Eni, which will acquire operatorship and a 40% equity interest in return for a capped carry on drilling the JP-1 prospect. Eni will also carry Chariot for other geological and administrative costs relating to work commitments in the next licence period of Rabat Deep and will pay a contribution which will equate to Chariot’s investment to date and be used for the continued development of Chariot’s portfolio. This agreement demonstrates Chariot’s ability to deliver on its strategy; seeking third party investment in order to de-risk and progress its assets towards drilling in order to provide the opportunity for transformational growth.  

 Following completion of this agreement the licence ownership will be as follows: Eni (Operator, 40% equity interest), Woodside (25% equity interest), Chariot (10% equity interest) and Office National des Hydrocarbures et des Mines (“ONHYM”) (25% carried interest).

 The Rabat Deep Offshore licence area is located approximately 30km offshore in water depths ranging from 150m to 3,500m. The JP-1 prospect has been described following detailed processing and interpretation of 3D seismic data as a large, four-way dip closed structure of approximately 200 square km areal extent, with Jurassic carbonate primary reservoir objectives. Based on this data, Netherland Sewell and Associates Inc. conducted an independent Competent Person’s Report and has estimated a gross mean prospective resource of 768mmbbls for JP-1. The prospect sits adjacent to a source kitchen modelled to be oil generating and third party drilling offshore Morocco has confirmed that the Jurassic can have excellent reservoirs and the presence of a light oil charge, hence the focus on this play within Chariot’s acreage.

 Retaining a 10% equity interest in the drilling of this well has the potential to create transformational value in the success case due to the large scale of prospective resources, excellent contract commercial terms and robust economics even in the current lower oil price environment. Additional prospects and leads have been identified within the Jurassic fairway and any success in JP-1 would also materially de-risk these other targets and offer significant follow-on exploration potential in both Rabat Deep and the neighbouring Mohammedia permit (Chariot, Operator with 75% equity interest).

 The completion of this farm-out agreement remains subject to both the approval of the Moroccan authorities and various conditions precedent, a number of which are outside of Chariot’s control.

 

Larry Bottomley, CEO commented:

 

“We are very pleased to have signed this farm-out agreement with Eni as the future operator of our Rabat Deep acreage. We look forward to working with them and our other partners, Woodside and ONHYM, to progress to drilling the JP-1 prospect which, subject to the relevant approvals, well planning and securing a drill rig, we anticipate to occur in 2017. The response we had to the partnering initiative and subsequently securing this deal endorses our technical view of the asset and is another milestone in delivering on our strategy. Eni is a world-class explorer and an experienced operator focused on projects with the potential for material production.

 

“Despite the challenges posed by current market sentiment, Chariot’s high quality assets continue to attract industry investment. We are excited that we now have an opportunity to see one of our priority targets through to drilling at near zero cost to the Company, with the agreed cap above recent drilling cost estimates provided by an independent party.”

 

Morocco – Rabat Deep – Sea Bed Coring

Posted by Rumailakid on LSE

Multi-beam side-scan sonar and seabed coring survey- Completed by Woodside [Chariot] In July 2015.

Absolutely vital piece of subsea preliminary work to determine seabed lithology and composition not only for guide base and top hole section of planned well / s centers, but for any development subsea infrastructure, umbilicals, flow-lines, templates ( that would need to support Trees)
Its like a jigsaw puzzle…There quite clearly are massive plays here in Rabat Deep, this work is not normally conducted on a wildcat or exploration play, as a matter of fact I cannot recollect seeing where it has been done on a high risk, low chance COS play… They are looking ahead here, at stages after HCs in place.

Helios Chariot - Morocco Licenses

Chariot PR informed me on my questioning recently, ( 10 days ago) that Woodside are still quantifying the latest 3D results, this was after they announced the No Tier 2 commitment (see here). We knew the latest 3D was not available when they announced, to me this says no more than a fiscal bean counter decision in lean Capex times and nothing to do with the quality of the play.

I have it on very good feedback from St Georges Terrace that Woodside were/ are very keen here and it is fiscal constraints holding them back. As we all know they have picked up ‘closeology’ acreage to Rabat Deep and they will be playing a closed hand .. I for one am not convinced we have heard the last from Woodside here…

It is absolutely ” Shocking” the company did not release the completion of the sea bed coring and side scan sonar programme, This is key news in any O & G language let alone a speccy unloved oiler who needs every trick it can muster to gain shareholder sentiment and SP support back. I will be emailing them again today with my absolute wrath over this. This lack of news flow is just mind boggling!

This is a ” KEY” and systemic example of what Chariot Oil and Gas are missing in their miserable, feeble, puny, attempts to reach out and inform the market and its shareholders of what we are and what we are going to do. Larry Bottomley most likely said no lets not say a word as its blowing our trumpet and we don`t do that at Chariot !

This company IR/PR approach is more than broken, it is non-existent, derisory and to me damn near culpable to being a direct part of wanting/ orchestrating a prolonged company SP decline and shareholder sentiment weakness…. What the hell is going on here !

I am now also concerned that they will pull a fast one at the September 23rd Interims and hide behind a telephone dial in, I have mailed Chariot to clarify that the Interim’s will be conducted on a face to face with investors and analysts, however I am now having doubts…. We cannot allow this to be conducted behind a telephone.. This will be the first F2F with the AIG as quite clearly they have no intention to reach out and meet up with the AIG before hand no matter how hard we try and request it…

Keep up the chatter, great passion and input..

Morocco – Chariot – Sea Bed Coring Complete

Good news – Woodside have confirmed via their half yearly results June 2015 that the Seabed coring work that Chariot needs to perform for Rabat Deep in Morocco has been done (thanks to Poll on LSE for digging this one out). Chariot have not confirmed this via an RNS but I am pretty confident that if it is in the Woodside report that it has happened! It does not mention Chariots name other than to say ‘the operator’.

The Rabat deep sea bed coring was scheduled initially for Q1 2015. It looks like Chariot’s timeline has slipped two quarters to Q3 2015 in its delivery.

The RNS can be found here. There also remains the question of the remaining funds (the majority already received via the farm-out) which were due to be received in Q1. I have not seen any news regarding this final payment.

For completeness – Woodside elected not to exercise its option to take operatorship as outlined in the RNS here.

Helios Chariot - Woodside 2015 Half Yearly Report - Rabat Deep

 

Mauritania – Kosmos Energy – Two more drills in H2 2015

Earlier this year Kosmos had an amazing play opener in Mauritania which discovered 14tcf of gas in two distinct zones in the same well in block 8. This has de-risked Mauritania.

The Mauritania play opener was also the largest gas discovery off West Africa – ever! Kosmos own three consecutive blocks in Mauritania.

Mauritania - Kosmos Energy 2013

Even better news IMO was released last week by Kosmos that two further drills will occur this H2 2015:

Mauritania must now be on the radar off energy companies worldwide even with the current dip in sentiment. After all – Kosmos are drilling, right? This means the kind of targets they have in mind are commercial in the foreseeable future.

Chariots acreage is in Block C19 to the North. Chariot and Sterling Energy are the only Junior explorers with acreage in Mauritania. The rest are all big boys e.g Chevron, Tullow, Dana etc

One thing to ponder is Chariots partnering relationship with Woodside Energy in Morocco – as Woodside Energy were once in Mauritania many years back before pulling out of West Africa. Woodside Energy are now coming back to West Africa.  Chariots former non exec chairman – Phil Loader – now works for Woodside Energy.

Already with a Tier 1 partner – Cairn Energy – Chariot are currently seeking a Tier 2 partner with a drill schedule for Mid 2016.

Chariot - Mauritania - Oil Map