Chariot Share Discussion Threads

[hsfinch] 08/12/2023 06:39

Totally right. Just thinking on my last post - the blame game. The fiasco goes back to the so-called appraisal well they drilled but did not test. Without a test, it put off the 40 interested parties. Without a test, regulator wouldn't sign off the field plan. Without a test, socgen wouldn't progress the finance package. Without a test gas buyers wouldn't sign a gsa. That's down to Jock. He has to be first out.

[hsfinch] 08/12/2023 06:13

Punters waited years for this deal. And when it arrived the share price fell 15%. Time for the 3 pillocks (AP, Julie and Jock) to fall on their swords. Betcha there's a blame game going on as the whole lot of em thrash around looking for a scapegoat. It woz Putin. He hacked our servers and leaked info to Energean to delay first gas.

[brazilnut1] 07/12/2023 16:14

This company is a disaster. Has AP sold up ?

[888icb] 07/12/2023 14:27

Simon Thompson on Todays RNS
Chariot’s transformational farm-out is underrated

The fall in the company’s share price is a harsh reaction to what looks a good farm-out of its flagship gas project
The conclusion to the article:

“Clearly, the farm-out transaction fell short of the expectations of some investors as Chariot’s share price fell 15 per cent from 13.7p to 11.6p following the announcement. The share price is also below the 14.75p level when I assessed the farm-out possibilities (‘Chariot could soon announce a 'game-changing' deal’, 20 September 2023), albeit the holding has still delivered a 282 per cent gain in my 2017 Bargain Shares Portfolio.

It’s a very harsh reaction. That’s because Cavendish’s total risked valuation per share of 57.7p for the company is not only five times the current share price, but it rises to 71p assuming Energean exercises its option to acquire a further 10 per cent stake. This highlights the value embedded in the Anchois gas project and which Energean has clearly recognised. So, although the initial reaction to the news is disappointing, expect the heavily oversold shares to bounce when the dust settles. Hold.”

[ashkv] 07/12/2023 14:13

Simon Thompson Investor's Chronicle

Chariot’s transformational farm-out is underrated

The fall in the company’s share price is a harsh reaction to what looks a good farm-out of its flagship gas project

December 7, 2023

Energean acquires stakes in Lixus and Rissana licences

Option to purchase a further 10 per cent interest

Chariot’s share price falls 15 per cent on news

Chariot (CHAR:11.6p), the Africa focused transitional energy group, has announced a farm-out agreement with Energean (ENOG:995p). The transaction covers its Lixus Offshore licence, which holds the company’s flagship Anchois gas development project, and the nearby Rissana offshore licence in Morocco. Energean is a £1.8bn market capitalisation FTSE 250 company that has a proven track record of successfully developing large offshore gas projects.

The agreement provides funding for both Chariot and the Anchois gas project through upfront consideration, deferred consideration and potentially a full carry to first gas. There is potential to upscale the development and target further exploration prospectivity across the two licences, too.

Energean is acquiring 45 per cent and 37.5 per cent interests in the Lixus and Rissana licences, respectively, to take operatorship. It reduces Chariot’s stakes to 30 per cent (Lixus) and 37.5 per cent (Rissana) with Moroccan state company National Office of Hydrocarbons and Mines maintaining a 25 per cent stake in each licence. In return, Chariot will receive $10mn on completion of the transaction; $15mn on Final Investment Decision (FID); and has an $85mn gross carry that covers its Lixus costs up to FID, including the additional Anchois well being drilled, which will have a gas flow test in 2024.

Following completion of the Anchois well, Energean has the right to acquire a further 10 per cent of Chariot's equity in the Lixus licence for an $850mn gross development carry to first gas; $50mn five-year zero coupon convertible loan note with a strike price of 2,000p or by issuing 3mn Energean shares; and 7 per cent royalty payment on Energean's gas production revenues in excess of a base hurdle on the realised gas price (post transportation costs).

Analyst James McCormack at house broker Cavendish values Chariot’s retained 30 per cent interest in the project at $476mn (35p) on an unrisked basis, or $310mn (23p) on a risked basis using a 65 per cent commercial chance of success. Assuming Energean exercises its option to acquire an additional 10 per cent in Lixus, Cavendish values the 20 per cent fully carried interest at $595mn (risked) or $447mn (unrisked), using a higher 75 per cent commercial chance of success (due to the lower financial risk and result of the Energean carry). This implies a valuation of 29p (risked) to 44p (unrisked).

The conclusion:

“ Clearly, the farm-out transaction fell short of the expectations of some investors as Chariot’s share price fell 15 per cent from 13.7p to 11.6p following the announcement. The share price is also below the 14.75p level when I assessed the farm-out possibilities (‘Chariot could soon announce a 'game-changing' deal’, 20 September 2023), albeit the holding has still delivered a 282 per cent gain in my 2017 Bargain Shares Portfolio.

It’s a very harsh reaction. That’s because Cavendish’s total risked valuation per share of 57.7p for the company is not only five times the current share price, but it rises to 71p assuming Energean exercises its option to acquire a further 10 per cent stake. This highlights the value embedded in the Anchois gas project and which Energean has clearly recognised. So, although the initial reaction to the news is disappointing, expect the heavily oversold shares to bounce when the dust settles. Hold.”

[ashkv] 07/12/2023 13:08

They should have just sold the gas project and focused on new energy. Market would have welcomed the same rather than retaining a share...

Also market (any myself) were hoping for more cash upfront!!!!

I suppose Adonis wished to transact with his Greek Bretheren...

[brazilnut1] 07/12/2023 12:53

Ye thats all well and good jotting down projections but market still doesnt like the look of it and thats been the problem all along. Chariot is not a trusted company and AP certainly not.

[sev22] 07/12/2023 12:43

Introduction to a new Broker note from Cavendish.

Delivering an Expanded Anchois Project.

Chariot has signed a partnership agreement with Energean (LON:ENOG), funding Chariot and the Anchois project through an upfront consideration, deferred consideration and potentially a full carry to first gas, with Chariot retaining a material stake in the project. The partners will now accelerate the drilling and flow testing of the Anchois East well in 2024, with rig contract negotiations underway. The multi-objective well, designed as a future producer is being drilled to unlock up to an additional c383Bcf of resource to enable the existing offshore development plan to be expanded to accommodate production significantly above the existing 105MMscf/d development concept. We believe Energean is a perfect counterparty for Chariot and Anchois given its gas development experience and the materiality of Anchois to Energean’s portfolio.

- Potential Funding to First Gas Under the agreement, Energean will acquire a 45% equity interest in the Lixus licence (containing the Anchois development) and a 37.5% equity interest in the Rissana licence. In consideration, Chariot will receive US$10m in cash on completion of the farm-out, a US$85m gross carry including all Lixus costs up to FID, including the Anchois well with a gas flow test and the planned Rissana seismic acquisition costs separately capped at US$7m and a further US$15m in cash on FID. On completion of the Anchois East well, Energean will have the right to acquire a further 10% of Chariot’s equity in the Lixus licence in exchange for a development carry to first gas (capped at US$850m gross) the issuance of either three million Energean shares or a US$50m 5-year zero coupon convertible loan note and a royalty of 7% on Energean’s gas production revenues in excess of a base hurdle on the realised gas price. Energean’s share of Chariot’s costs has a coupon of 7% over SOFR and is repayable from 50% of Chariot’s net sales revenues from the offshore licences. At 7% over SOFR, the terms of the financing with ENOG are better than the c15% we currently see in the market.

- An Ideal Fit Energean is a FTSE-250 independent E&P Company, with a proven track record for developing material offshore gas resources, having successfully brought onstream the 1.4Tcf Karish gas field in Israel.

- Near Term Appraisal Drilling The partners will accelerate the drilling of the Anchois East well, a planned producer well location in the Anchois development, with drilling expected to commence in Q2/24. The objectives of the well are to further appraise, and flow test the discovered gas sands and importantly to evaluate the Anchois O reservoirs in the previously undrilled Anchois North Flank and Footwall targets, which in aggregate are estimated to contain 383Bcf of best prospective resources and high chance of success. On success, Anchois East will demonstrate the productivity of the Anchois field in producing gas to surface, materially increase the discovered resource base and provide a clear path to FID.

- An Upscaled Development Success at Anchois East would support an upscaled development in excess of the existing 105MMscf/d development concept, accelerating project paybacks, reducing unit development costs and improving IRR’s.

- Imminent Price Catalysts Chariot will commence a drilling programme in early 2024 at the Loukos Onshore licence. The Loukos Onshore licence contains several low-risk prospects, geologically similar to Chariot’s offshore portfolio, which can be rapidly monetised via nearby existing and planned infrastructure.

- Discount to Valuation We update our valuation to 58p, with the decrease in Chariot’s working interest partially offset by a combination of the committed consideration and a reduction in commercial risk. If Energean exercise its option to acquire a further 10% in Lixus our valuation increases to 71p.

[ashkv] 07/12/2023 12:42

As I see it the terms of the deal ->

USD 10 million on deal close

USD 10 million on FID (Late 2024 at the earliest)

USD 25.5 million [USD 85 million gross carry to FID of 30% Chariot Share = USD 25.5 million]

USD 2.1 million (30% Share of Planned USD 7 million Rissana Seismic Costs capped at USD 7 Million)

3 million ENOG shares or an Interest Free Convertible Loan Note of USD50 million on FID / Outcome of Flow Test (95% confidence given third party CPR and lab tests) plus full development carry for an additional 10% of Lixus License leaving CHAR with 20% of Lixus plus full developmental carry up to USD 850 million dollars.

Also retained is a substantial 37.5% share of the Rissana license

So in 2024 CHAR should get USD 20 million cash on close and FID plus an interest free loan of USD 50 million which should tide the firm over for the subsequent 2 years to first gas. Also hopefully an income stream from Morocco plus Green Energy initiatives.

Therefore in sum USD 10 million + USD 10 million + USD 25.5 million + USD 2.1 million + USD 50 million (Interest Free Loan or 3mn ENOG Shares) + USD 153 million (USD 850 million Development carry minus minus initial USD 85 million pre-FID carry * 20% Retained Share of Lixus by CHAR) plus 20% of future Lixus Income Stream minus interest costs = NPV10 of 50p to 70p per share based on analyst assumptions!!!


· Chariot will receive:

o US$10 million payable on completion of the transaction

o US$15 million payable on Final Investment Decision ("FID")

o US$85 million gross carry including:

§ All Lixus costs up to FID, including the additional Anchois well with a gas flow test

§ Planned Rissana seismic acquisition costs separately capped at US$7 million

[brazilnut1] 07/12/2023 12:10

Energean needs to buy the whole shambles for 50p and let us gtf. Conmen all. Bod and AIM. Sell off in no way logical so pure corruption.

[ohdearohdearohdear] 07/12/2023 11:42

The directors are happy because their jobs are secured for another few years. The continuing dilution here is going to be big and first gas not for another couple of years at least. A lot can happen between now and then and PI's no longer have a timeframe beyond 5 weeks.

Come back in 18 months time I reckon.

[ashkv] 07/12/2023 10:57

FTSE/AIM/UK Financial Markets are dysfunctional - should merge with NYSE/Nasdaq/US Markets as the UK Stock Market is of no value!!!

What a F&&& up to have waited nearly two years and immense opportunity cost to be near 52 week lows...Wow what a tragicomedy... I took some profit at 15-16p... should have dumped the whole bunch!!!!

Market not taking to Energean and/or the deal terms :( :(

[benjamin15] 07/12/2023 10:29

Yep going to bounce, still think we will see a blue finish

[bosbus] 07/12/2023 10:25

what's happened to the webcast?

[richie32] 07/12/2023 10:18

This drop seems unwarranted on this deal.

Likely to bounce back up imho

[benjamin15] 07/12/2023 10:16

"First gas without any future significant equity raise”

[devilsprofessor] 07/12/2023 10:06

Why has this news been SO badly received?