Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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The market does not like the deal, from 40 companies this is the best they have produced? stringing along investors over a year with transformational news hope the market is wrong and it re rates as AIM UK is in it's final months or years of survival, people will not invest in this shady underworld market.
But it's all good guv'nor even despite the share price dropping into the 11's.....
When the đ's thought it would be the catalyst and we would be đ And still no sign of a "disappointed or exasperated comment" to share, everything is just hunky dory đ
Must admit it was comical how quickly the "new posters" to chariot disappeared this morning after ramping it up before the start of play đ Perhaps they got caught with their underpants down đ˛
Good old chariot just keeps on giving great top up opportunities and the usual suspects are out in force trying to persuade everyone to fill there boots.....Just like they did at the last placing, and the placing before that.....
Jam tomorrow anyoneđ¤
We're really sizzling now đđ been here 10 years plus. I actually like the deal and was happy after reading this mornings RNS.
Good luck LTH's
Looking at the trades (and I only have a limited view) Iâm going to suggest that the drop in SP has nothing (or at least very little)to do with the Farm In terms/deal.
Yes, some traders will have bailed, because thatâs what they do on news, but It could also be argued that (although volume has been low) someone has been drip feeding sells over the past 2 weeks. If this is a âdistressed sellerâ it stands to reason they will have taken today (a guaranteed high volume day) as an opportunity to âgo for itâ and dump as many as possible, at any price (within reason) and just get out.
Someone mentioned earlier about the 100k blocks. These are âOâ trades so not the AlgoBot, and they started right on the opening bell, suppressing the price and stopping any upward momentum in its tracks.
The Farm In deal is an excellent one IMO, so I would have expected big buying today off the back of it. Unfortunately someone had other ideas. When theyâre finished, weâll see some upwards movement imo, especially since we know that the On Shore drill will start turning âearly in the New Yearâ.
GL all
*That equates to $2 Billion in revenue at an agreed gas sales price of $10 per Mcf.
The entire future of Chariot's portion of Anchois is dependent on Duncan Wallace's work as an O&G geologist and his confidence in there being more gas located in Anchois East. Let's hope he's as good as we think he his.
The most important part of the RNS can be boiled down to this; Only on a successful drill will the $850 million free carry kick in. Everything else is irrelevant. We all know that Moroccan power stations and industry are hungry for gas and the Moroccan government are fully behind this development having had to pay high imported LNG prices for the last 3 years. Gas sales agreements and such like are mere formalities at this point. What's far more important is for Anchois to be a 1Tcf+ resource.
Downside risk
If the Anchois East drill is unsuccessful, Chariot only receive $25 million in cash and an $85 million free carry (90% less) for Anchois. This would give them enough to develop the Loukos onshore acreage (of which they hold a 75% interest), but for offshore Anchois, they would likely need to look for either another partner or give more of the asset away to Energean. This would be the downside â they would end up retaining much less of Anchois.
Upside potential
On a successful drill the SP will rocket. Not only will Chariot receive an $850 million free carry to production retaining 20% of Anchois, they would also get $50 million in Energean stock plus a 7% royalty payment on ALL of Energean's revenues above the base hurdle gas price which would be substantial if there were to be an uplift in gas prices. But what's most important to consider if the drill is successful is that Chariot will receive 20% revenue on the sale of 1Tcf+ of gas over the course of a 10 year tax holiday. That equates to $2 Billion in revenue.
Conclusion
Today's drop is probably overdone when you consider the downside risk is somewhat backstopped by Chariot's onshore acreage and the cash it's going to receive from Energean regardless of the outcome of the Anchois East drill ($25 million). This $25 million, together with the recent placing ($19 million) is probably going to be enough to get the onshore acreage into production even without a successful Anchois East drill. However, on a succesful Anchois East drill everything gets unlocked, including the $850 million free carry and on such a result I would expect the SP to start the climb towards analysts targets of 71p because its just simple math from that point. At this point there's still risk involved albeit the market has overplayed that risk somewhat...
As lots of posts today on board,
market does not like un-certainty e.g. what is cost of development? what if new well is 1 TCF or 1.5 TCF or what if it is not as much big as people expect, what this is un-certainty
i think big question is cost of development, if it is $500million then we only need 30% which is $150million and we got $80million
Energean is down due to being XD today.
I'm a LT holder who has not posted before - been patiently waiting for this news. Underlying project fundamentals seem sound and exciting from this mornings update. If this is such a poor deal for Chariot, means it must be a great deal for Energean which would make them a buy - however their share price down 3.74% today. Think some patience required here to let the market clear and focus on the fundamental economics. I am staying put!
Well I for one am happy this has given me the chance to bring my "accumulation" average to just under 13p, never expected to achieve that, although the reaction is disappointing today, mostly in my opinion down to the countless 100k offloads someone has opted to do, and seems to have either finished or at least stopped for now.
For me anyway, I was primarily focusing on the soon to kick off drilling ops, so I am more than content with my lot for now... lets see what comes over these coming months of physical activity !!! EVERY Aim oily stock loves a drill or 4 !! especially in primed locations.
40 plus interested parties, 1 offer to buy whole thing, yet here we are, oh this company really does have investors best interests at heart!
Well oversold on RSI .... didn't expect that either !!!!
Exceptionally high volume today too.
Whatever the manipulation we will not make much money here with a carry on like this.
I was expecting a modest gain at worst not a 15% decline for what is supposedly the most important news in our history. To rely now on the success of a new drill to lift this back up is just a bit fkd up.
Was hoping to hit top of channel today, little did I expect it to be the bottom !!!
Feels a long, long way away nowđ¤ˇââď¸
So, case in point re PR.
Not Neccessarily a bad partner. However, its clear the market is having as much trouble figuring out the economics as me. I think (like me) SH are trying to understand why this is a good stock to continue to hold longer term. They are trying to understand why the structure of this transactions isn´t just pushing SH value add down the road...AGAIN.
Be great if an analyst or broker could quickly come up with a new RS note, explaining why this now means the shares are as they reiterate, worth 56p?
It might read something like; To develop this alone we need ~US$400m or whatever that number was. C don´t have the expertise or capital to do it alone. This agreement accelerates development because, Energean pay C cash now (for ongoing Green whatever...) and a heafty addtional payment if they want more equity. Maybe it even positions C as a takeover target in the US$1-1.5bn range or £0.6 - 1.0 a share range(?) Energean have the expertise and cashflow and have committed to drill further discovery wells offshore (which C now don´t have to fund) and they are incentivised to get cashflowing asap as a hedge to their activities offshore the Israeli war zone.
Anything that makes the case that shares that are already ~-25% YTD should be held now.
"As mentioned above I will add more to this story in due course but I have spoken to the company and I think this is the right move for them. Mainly because I feel that in Energean they have made a wise choice, and Chariot had quite a big choice to make with multiple offers on the table, as they tick a lot of my boxes as a future partner. They have significant experience in sizeable gas projects such as this and can fund this deal whichever way it goes in terms of further options.
And those options help Chariot, they have the chance to sell a piece more and are carried to first gas dependent on that option re drilling the well next year which is most interesting as it is an appraisal, development and production well all in one.
Clearly the Moroccan authorities buy into this deal big time, I would if I was them as they need domestically produced gas and the Chariot/Energean combo should be the dream team. For Chariot this is just what they wanted, shareholders can enjoy the spoils of the existing discovery along with potential for a great deal of upside..."
https://www.malcysblog.com/2023/12/flash-blog-chariot-dec/
Https://chariotenergygroup.com/app/uploads/2023/12/Offshore-Partnering-slides.pdf
Redeyemines,
It's all about the next drill. Everything else is irrelevant, including gas sales agreements etc.
Everything gets unlocked post a successful drill.
---So where are we now
-In some ways, we are back a few paces---and before I get shot down let me explain.
---It's still all about first gas and revenue.
-Onshore--that is down to Exploration drilling, and "hoping" that our seismic work is correct.-If this all works out, then onshore could turn out to be our first revenue----but it is all unproven at this stage, and as such is very much stage one (but with a bit of readthrough from Anch).
-Offshore---we now wait for a new well to be drilled (Anch 4) and "hope" that results are as expected.
-Only after these drill results will FID be completed---so again we going back a pace or two to exploration , and even though we should have a virtual 100% cos, you can never take anything in exploration for granted, hence the FID and further investment decisions will depend on proven results.
----Gas Sales continue to be negotiated and my conclude even before this drilling---but that is no certainty, and in truth will not alter our first gas/revenue at this stage.,
-So it does look like our next moves will depend, once again, on upcoming drill results--something most of us had hoped was firmly behind us now.
----Production is now being talked about for two years after FID --- (I'll have another listen to that, to make sure I heard it right)-----and if that's right then we are looking at mid 2026 and not the 24/5 the Co hoped for in the beginning, ----- again being two and half years forward, ---that date could change either way, so should be taken with a large pinch of salt.
-So yes to me, it feels like we have backwards a tad, and we must now wait on drilling results all over again.
-
-Still plenty of time to buy into this
Sniper,
No. They had quite a lot of differing offers. They feel this offer best represents the value Anchois holds (longer term), although there is still a risk present which I'm surprised people haven't spotted and it's the reason Chariot is down this morning.
De-risking is underway.
We waited for the exciting weeks and imminent transformational news, bidding from 40 companies has transpired to a 15% minus in share price, is this not the news people were expecting, everyone wanted a 300% minimum gain. Perhaps no one wants to wait given the trust in the aim market, could be a manipulation to shake the weak holders the true price will be reflected in the coming days. Good luck all holders.
I am a long term holder here, although donât post much.
I think what weâre seeing honestly, is the market reaction to what AP has built up to be a really good deal (it is a fair deal) but I feel like they didnât have the offers/ interest they made out to us since the Anchois discovery. This was the best deal for shareholders they could negotiate in what feels like 2 years??
Happy, I get the point youâre making, but why would AP let that happen when he just said in the webinar that they had had approaches for the company, and knocked them back.
He knows the value here. Itâs not just a case of someone âtaking them outâ simply because the SP doesnât reflect true value.
Assuming a worst case scenario of 20% equity interest carried through development , the current proven gas reservoirs can easily produce 200 mmcf per day from three producers,
Assuming a $10 mcf gas price that generates $146 million p.a in revenue for a very long time, net of opex and royalties itâs worth about ÂŁ100 million per year.
Then there is the low risk opportunity to double reserves with the inclusion of the O sands which have already proven both reservoir and gas.
Strong buy
Jimmy