Shares in Chariot Oil & Gas (LSE:CHAR) dipped 7.1pc to 4.4p on Tuesday morning despite the business announcing positive progress within one of its key Moroccan licences. The firm said a development feasibility study has revealed that the development of the Anchois field on its 75-owned-and-operated Lixus licence is technically feasible. It has also completed a Morocco gas market and field monetisation assessment for Anchois.
The work found that the offshore field has the potential for either a single phase or stage development to optimise access to different parts of the Moroccan gas market feasibly. Development options include what Chariot describes as a ‘subsea-to-shore’ concept that will employ proven industry standard technical solutions and equipment. This method involves tying subsea production wells to a manifold, from which a flowline connects to an onshore central processing facility. Here, gas is processed before being delivered into Morocco’s Maghreb-Europe gas pipeline through an onshore gas flowline.
Chariot’s work also highlighted the potential to re-enter the suspended Anchois-1 gas discovery well, which could be completed as a producer well. Anchois -1 contains a 307Bcf 2C resource alongside a deeper 116Bcf 2U prospective resource. Elsewhere, the company has now begun an environmental impact assessment to support appraisal operations in 2020.
Chief executive Larry Bottomley said the results of the work demonstrate the ‘technical feasibility and commercial attractiveness’ of developing Anchois within Morocco’s development energy market.
‘We believe the combination of a de-risked resource base in a fast-growing energy market, with high gas prices and a need for increased supply remains highly attractive to a wide range of potential strategic partners throughout the energy value chain,’ he added. ‘As part of the partnering process and to facilitate appraisal operations in 2020, the Company has initiated a Drilling Environmental Impact Assessment.’
The Lixus licence covers c.2,390km2 30km north of Chariot’s existing Moroccan acreage with water depths ranging from the coastline to 850m. The area has been subject to earlier exploration, with legacy 3D seismic data covering approximately 1,425km2 and four exploration wells including the Anchois gas discovery.