On Wednesday, Chariot Oil and Gas (LSE:CHAR) released its final results for 2018, a year in which the firm participated in the drilling of two deepwater exploration wells. Unfortunately, both drills proved to be unsuccessful but Chariots financial exposure to each was limited. Although the Rabat Deep 1 well was unsuccessful, analysis of hydrocarbons extracted from sidewall cores indicates the potential for a new petroleum system for offshore Morocco.
Larry Bottomley, Chief Executive Officer of Chariot, commented:
“Chariot’s 2018 drilling programme, whilst disappointing in not delivering a giant discovery, did demonstrate Chariot’s ability to attract quality industry partners and enhance its reputation for operational efficiency, safety and effectiveness. These wells take the Company another step further in maturing and de-risking the areas in which it operates at no to low cost.
“We remain committed to progressing our high impact exploration programme. The analysis of the Namibian drilling results is ongoing and we are excited by the implications of the Rabat Deep 1 well in Morocco, which has led to a new portfolio of prospects charged by world class source rock and de-risked the Clastic priority prospects MOH-B and Ken-A in Mohammedia and Kenitra. This, alongside our independently audited Brazilian prospect inventory will be the focus of our partnering process in the year ahead.”
The company reports it was debt free with a cash balance at 31 December 2018 of $19.8m, and is fully funded for forthcoming work commitments, which require expenditure below $1m. Chariot has just been awarded operatorship and a 75pc interest in the Lixus license offshore Morocco. Five prospects have been identified in Lixus which contains the Anchois gas discovery, drilled in 2009. Chariot will conduct a technical programme of 3D seismic evaluation to pinpoint additional potential on the licences.
Bottomley adds:
“Chariot has had an exciting start to 2019 with the recent award of the Lixus licence offshore Morocco. The addition of discovered resources rebalances the portfolio providing a near-term development opportunity, low risk exploration upside and ultimately a sustainable footing to continue to pursue our high impact exploration portfolio. We will be looking to source strategic partners to develop the Anchois-1 gas discovery.”
The shift in balance of risk and reward with the addition of the Lixus licence fulfils the Company’s goal of seeking an opportunity to generate cash flow. We now have a diversified inventory of giant, high margin, high risk prospects complemented by a high value, low risk, low cost gas appraisal project in an emerging gas market supported by a growing energy demand. With our exceptional team, supported by an enhanced board and strong balance sheet, we believe that the year ahead offers exciting opportunity for progressing all areas of the Company’s portfolio.”