Chariot Oil & Gas Live Discussion

preciousmaj 16 Apr 2019

Courtesy of BigBiteNow Good morning. The market clearly hasn’t taken the time to fully appreciate what the Lixus concession and discovery truly means for Chariot Oil. I have seen several references here to SDX, a company I have also invested in and that currently operates in Egypt and Morroco. SDX is currently building a central processing facility in Egypt (not Morroco) with a gross plateau production rate of between 50-60 MMscf/d, with the conventional natural gas being sold to the state at a price of US$2.85/Mcf. SDX has a 55% working interest and is operator in this concession. Whilst the project is delayed there is much excitement for what this project will do to transform SDX’s fortunes by adding what will be circa 5,500 bopd net equivalent production to the business. However, it is in Egypt, a jurisdiction where the 75% ownership enjoyed in Morroco simply isn’t available. Nor is there a 10 year corporation tax holiday on production and the realised price is ‘just’ $2.85/Mcf. In Morroco, SDX operations enjoyed an average realised price of $10.33/Mcf in 2018 with netbacks estimated by Edison at the start of that year at between $8.5-9.0/Mcf range for realised prices of $10/Mcf. [link] SDX are no doubt delighted with their project in Egypt but be under no doubt, it would be a far stronger project if it was based in Morroco and creating far more excitement. With Lixus, Chariot have just that and then potentially a lot more. Yes risks remain and the Morrocan market has to be fully analysed to establish how much gas it can handle and at what sort of pricing but at netbacks pushing $9/Mcf there is plenty of headroom considering that the potential netback is some 315% more than the full prices SDX will be achieving from their processing facility in Egypt. That would be enticing enough if we were simply just comparing a like for like outcome. However, Chariot’s outline plan points towards a 70Mmcf/d phase 1 development. If they only achieved the 70Mmcf/d outcome then i am in, i am present, i am invested, because of those potential netbacks. However, that phase 1 development plan has room to expand to 90Mmcf/d if the deeper Gas Sand C comes in, which carries risk but nothing too testing. A great percentage play given that the 70Mcf/d is enough. But if that weren’t enough then we have phase 2, which can deliver another 90Mmcf/d if the satellites around Anchois come in, and has the added bonus of a low risk Anchois N potentially contributing 238BCF of the anticipated 674BCF needed for this phase (so 35% of the total) and currently holding a 51% chance of success. However, the investment case doesn’t require 90Mcf/d from phase 1, nor phase 2, nor Anchois N, nor the 5 eastern prospects, or even the reported “giant scale prospective resources in the sub-Nappe” that are being reported. All of that is free carried and a bonus. I very much like.

preciousmaj 16 Apr 2019

Courtesy of BigBiteNow @topsharepicks whilst nobody outside the company can say for certain that “big farm in” news could not come at any time, the likelihood in Brazil, which i have seen mentioned on this BB several times of late, is that this will not happen until the AP-1 block has been drilled by Shell and its partners. Slide 20 of the latest Chariot presentation is clear ; “Partnering process initiated for a partner to join in drilling to follow a play opening commitment well to be drilled by a third-party in the neighbouring deepwater block” Now whilst there may be a partner out there willing to commit prior to this, it really doesn’t make commercial sense to do so when they can wait until Shell have drilled and establish a better idea of the chances of success. The same is being played out by Chariot themselves with the MOH-B and KEN-A ‘potential’ drills. That Shell drill is not currently planned for 2019. You have every right to believe and argue whatever case you may wish but personally I believe the Brazil angle to be premature and an unnecessary distraction from the Lixus announcement. I didn’t buy in for Brazil but i did buy in for the potential revenues and developments that a successful Lixus will open up. However, I am much more excited about the further Lixus drills and potentially what it could do for opening up the MOH-B play. As an example, the very last slide of the April presentation from Chariot states that Anchois N has the potential to add a further 238 BCF in 2C resources with a 51% chance of recovery. Now that is an internal estimate and Anchois N is till to have a CPR carried out on it but that is included in the works due over the next 2-3 months, and given it has by far the greatest chance of success assigned to it, could well be a very interesting development over the next 2-3 months. To drive that point home, I refer you to slide 8, which is the outline development plan that has been put together to date. Phase 2 currently only considers the 3 satellites that have a CPR on them, and yet it is capapble of delivering a further 90 mmscf/d. However, the slide clearly states ; “Anchois N yet to be audited and may materially impact on a Phase II development” So the satellite with the current highest assumed chance of success and circa 238 BCF in potential gas pay, isn’t even part of what is a potential 180mmscf/d field development plan. Such a development reduces the need to succeed on the satellites and reduces the risk of the overall play. It is these potential game changing positives that will potentially come out in the studies that are due in the next 2-3 months. They have the potential to deliver a very large field plan that will be selling into Chariot’s highest margin market by far and will enjoy a 10 year corporation tax holiday on production, something Brazil doesn’t get near. That is why i am here for Lixus and not those ‘big farms ins’ which are a red herring and a distraction.

preciousmaj 16 Apr 2019

Courtesy of BigBiteNow I have taken a position in here having previously bought SDX, so my understanding of the Morrocan gas market is good and their pricing structure makes the Lixus block a very attractive asset. 75% ownership of 70mmboe of 2P resources for just $1m commitment is significant. I do however believe that the talk of the Brazil farm in is far too early because the company and highly likely any potential partner, is waiting for the results of the Shell drill on the neighbouring block AP-1, which as far as I can find is currently not scheduled for 2019. Mohammedia (MOH-B) looks far more likely to be the front end ‘giant’ scale drill that finds a partner and a path to being drilled, but it is not the key reason i have decided to buy in. This is all about Lixus, which is a deal that has and continues to take the market by surprise. From what I can see the next 2-3 months actions are designed to set up Anchois as a commercial find through a series of studies that will turn those 2C resources into proven commercial ones and attract a quality partner for what is an appraisal well. Hence the drive to establish the development plan and the Morrocan gas market. There is risk and I am wary of the managment’s performance to date. However, the asset is that good that on a risk reward basis that I find it compelling enough to take a position. What’s more the discovered resources sit within gas Sand A and B and are to date capable of supplying 70mmscf/d for over 10 years. That is without the as yet not drilled Gas Sand C, or indeed the other 9 prospects that are noted on the block. So everything else could fail and they could still bring home a 70mmscf/d discovery. If as suspected the development plan and gas market studies deliver the sort of returns I expect, then that will be the key catalyst here front end and not Brazil or even MOH-B. They are pure bonuses later down the line, Lixus is more than enough for now. So I am a buyer.

TexDrilla 16 Apr 2019

Malcy's Blog: Oil price, Chariot, JOG, Soco, IOG And finally Seems like Malcy fill follow the whole journey to production and to a much higher shareprice with us. Surely he will not be the only one. [link] CharCharChar.png1263x949 194 KB

preciousmaj 15 Apr 2019

Malcy's Blog: Oil price, Chariot, JOG, Soco, IOG And finally Vox Markets Versarien, Strategic Minerals, Emmerson and Malcy on O&G - Vox Markets On today's podcast: Versarien sign a term sheet with Beijing Institute of Graphene Technology. Strategic Minerals provide an operational update. Emmerson sign a heads of agreement for 100% Offtake. Interesting chat by Malcy from 38 mins on about the Price of Oil, Fund mgrs, Bond market, Aramco, Chevron offer for Anadarko, etc Talks Chariot from 50:30 mins on

OtisOtis 05 Oct 2018

Investor Conference Call As I live in the US, I seem to be one of those off track betters that Theoryman referenced. What conference call are we discussing? I see nothing on CHAR's web site and have not received and e-mail notifications Thank you...

OtisOtis 05 Oct 2018

Regarding TexDrilla's geology comments---mature source rock is not an issue. The seabed in this area has many "pockmarks," which result from gas venting out of the rocks. Source rock has also been proven in near by wells. The presence of sand bodies is also very likely, as the mountains or hills on shore should be a good sediment source. Also, the seismic data which they have presented shows sediment formations which are very likely sand bodies. As a practicing exploration geologist/geophysicist, I look favorably on their Namibia prospects and the interpretations they have presented. I do have two questions, however. 1) Is there an effective seal over the forecast reservoir rock? Drilling will tell. 2) Does anyone know why they chose to not drill the deeper structure? I would not expect the incremental cost increase to be that much and, to my eyes, that structure is comprised of folded sediments, as a potential anticline trap. I am sure there are good reasons for not drilling that little bit extra but I don't know what they are. Has CHAR explained their reasoning somewhere?

OtisOtis 05 Oct 2018

Sorry, sending 3 copies was my bad

OtisOtis 05 Oct 2018

Jimmy23 is correct regarding the farmout market. L. Bottomley has touted many times that seismic was acquired at the bottom of the cost cycle and that the current drilling is also being done at the bottom of the cost cycle. He is correct. The majors also know that this is the bottom of the cycle for farmin deals and that cash starved startups will be tempted to take any trash deal they need to survive. It is both scary and risky for CHAR to drill this well solo, but given market conditions, they would have had to give away the farm to get a deep pocketed partner. I think that they chose the right path.

OtisOtis 05 Oct 2018

Jimmy23 is correct regarding the farmout market. L. Bottomley has touted many times that seismic was acquired at the bottom of the cost cycle and that the current drilling is also being done at the bottom of the cost cycle. He is correct. The majors also know that this is the bottom of the cycle for farmin deals and that cash starved startups will be tempted to take any trash deal they need to survive. It is both scary and risky for CHAR to drill this well solo, but given market conditions, they would have had to give away the farm to get a deep pocketed partner. I think that they chose the right path.

Noe 05 Sep 2018

Hey guys, any clue on why Zeal has been nominated ? He didn't seem really related to CHAR till now. I cannot find anything on his upcoming functions...

mrmozzer 07 Jan 2018

Re.jimmy 24 /Brazil ,much appreciated the link i never knew there were so many lady boys in Brazil still makes a change from going on about turbite sands and three way dips again very much appreciated

FQ320MR 15 Dec 2017

It's also risky to wait for the company as a failed drill will make a farmout so very cheap and the drill has a 14 CoS !! IT'S GOOD TO LOOK A BOTH SIDES AND NOT BE BLINKERED

FQ320MR 07 Dec 2017

Or it's simply clued up investors reading the amount tied up in bank garantees + cash needed to drill + cash needed to buy new area = placement !!

FQ320MR 05 Dec 2017

Well that almost confirms my thought here for a while - a placement is on the way to pay for drilling and a new area - we have possibly $18m in the bank but have £7m tied up in guarantees which is hardly enough to concider a new venture never mind a drill..This may well be the reason why ii's have been holding off taking a stance on Chariot - it would make sense they are usually well informed !!