CHAR – Giant Scale Drilling Campaign Initiated

6 June, 2018 – Chariot Oil & Gas Limited (AIM: CHAR), the Atlantic margins focused oil and gas exploration company, today announces its audited final results for the year ended 31 December 2017.
2017 and Post Period Highlights:
Giant Scale Drilling Campaign Initiated
·      Drilling campaign initiated in Q1 2018 at zero cost with the Rabat Deep 1 exploration well, Rabat Deep, Morocco, following completion of farm-out agreement with Eni
o  Rabat Deep 1 well, targeting the JP-1 prospect safely drilled to a total depth of 3,180m
o  No hydrocarbon accumulation was encountered but a thick top seal and tight, fractured carbonates in the primary Jurassic target were penetrated
o  Electric log cores and side-wall cores are being analysed to understand the implications on the prospectivity of the surrounding area
·      Chariot funded to operate a further giant potential well in Q4 2018
o  Prospect S, Namibia, (459mmbbls gross mean prospective resources) anticipated to spud Q4 2018 – fully funded by placing proceeds, partnering process ongoing
o  Ocean Rig Poseidon drill ship contracted to drill one firm and one optional well
·      Potential for an additional two wells in the near term, each offering the opportunity for transformational value to the Company and significant follow on potential
o  Further partnering anticipated to fund additional prospect drilling in H1 2019, either with back to back drilling in Namibia (Prospect W (284mmbbls gross mean prospective resources)) or the Lower Cretaceous prospectivity in Morocco (Kenitra-1 (464mmbbls gross mean prospective resources, internal estimate))
Robust Financial Positioning
·      Debt free with a cash balance of US$15.2 million as at 31 December 2017
·      Farm-in recovery of Rabat Deep investment costs received
·      Continued capital discipline with 2017 annual cash overhead reduced for the fourth consecutive year to US$4.2 million from US$9.4 million in 2013
·      No remaining commitments across the entirety of the portfolio
·      Placing and open offer raised an additional net US$16.5 million in Q1 2018 – providing funds to allow the Company to deliver a second well in 2018 and strength in partnering negotiations
Staying Ahead in a Cyclical Market
·      Rigorous tendering processes carried out to fulfil acquisition of 2D and 3D seismic over Mohammedia and Kenitra, Morocco, at significantly reduced prices
·      David Brecknock, experienced Drilling Manager, hired to undertake drilling preparations across Namibia and Morocco, with Ocean Rig Poseidon secured for Namibia in the current low-cost environment
·      Partnering strategy continues from a position of financial strength and at a commercial advantage with the aim of maximising retention of licence equity and drilling at the optimum point of the cost cycle
Focused Portfolio Management
·      New venture licence secured: Kenitra Offshore, Morocco – capturing the LKP prospects that extend from Mohammedia into this area and the Kenitra-1 prospect
·      Innovative option negotiated following election not to enter the next exploration phase in the Southern Blocks, Namibia (non-cash impairment of US$51.3 million): opportunity to back-in for 10% equity with remaining partners after the completion of future exploration drilling for no financial consideration
·      Continued maturing the Company’s diverse and giant scale prospect inventory:
– Competent Persons Report (“CPR”) of 2016 seismic campaign (culminating in a combined 6,100km2of 3D seismic data) confirmed five new structural prospects (S, T, U, V and W), ranging from 283 – 459mmbbls in gross mean prospective resources
– Drilling preparations underway for Prospect S (459mmbbls gross mean prospective resources), with the potential to drill W back-to-back in the success case and on partnering
– Datarooms open
– Acquired and processed approximately 1,000km2 3D and 2,250km 2D seismic data over Kenitra and the adjacent Mohammedia licences, interpretation ongoing with information from the Rabat Deep 1 well to be evaluated and calibrated with this data to gain further understanding of the prospectivity in this region
– Drilling preparations underway for Kenitra-1 and LKP-1a Lower Cretaceous priority targets (464mmbbls and 350mmbbls gross mean prospective resources respectively)
– Updated partnering process anticipated to commence in mid-2018, incorporating the results of Rabat Deep 1
– Integrated seismic interpretation and CPR completed with a large four-way dip- closed structure identified
– Portfolio consisting of seven prospective reservoir targets individually ranging up to 366mmbbls
– Single vertical well located at Prospect 1 can penetrate the TP-1, TP-3 and KP-3 stacked targets which have a summed on-licence gross mean prospective resource of 911mmbbls
– Partnering process initiated with dataroom open
·      Material follow on potential identified in each region of interest
·      Target to drill a second well, Prospect S (Namibia), in Q4 2018 with the potential for an additional two wells in the near term, (subject to partnering and/or outcome of adjacent drilling), each with the capacity to transform the Company’s value and with material follow on potential
·      Maintain stability and a position of strength by continuing to pursue the de-risking strategy:
o  Use in-house technical capabilities to continue to mature the current portfolio and develop a conveyor belt of giant drilling opportunities and material value triggers
o  Additional partnering to enable the acceleration of drilling of the current and follow-on portfolio
o  Apply capital discipline throughout the business
·      Capitalise on the current business environment
·      Continue to leverage knowledge of the Atlantic margins to access additional highly prospective new ventures to lock in follow on potential and opportunities beyond the current objectives
Larry Bottomley, Chief Executive of Chariot, commented:
“Over the course of 2017 we continued to deliver on all aspects of our strategy – investing in the lower cost oil price environment through extensive seismic acquisition, processing and interpretation to develop our technical understanding and high impact prospect inventory; completing a drilling partnership with Eni, enabling us to initiate our drilling campaign at no cost to the Company; and locking in additional prospectivity in neighbouring acreage with the successful acquisition of Kenitra, Morocco, as well as securing an innovative back-in option on legacy acreage in Namibia.
Whilst the drilling results of the Rabat Deep 1 well were very disappointing, the information from this well will be integral to de-risking further prospectivity in the region. This well was the first in our current drilling campaign and, with a diversified portfolio, we look forward to additional drilling in the year ahead, where Chariot’s high impact portfolio will be tested in the knowledge that, with this wider focus, we have secured follow on potential for the success case, and additional drilling opportunities across a variety of basins and play types.
With no remaining commitments across the portfolio we are in a robust financial position to pursue our new venture strategy as well as focus on maturing our remaining assets at the current low point in the cost cycle. The funds raised  earlier this year will allow the Company to deliver a second well in 2018 and strengthen our position in ongoing partnering negotiations, enabling us to protect equity and optimise value whilst gaining third party validation and a share in capital requirements for our priority prospects, S and Kenitra-1.”
Full announcement at
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