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3 months of waiting......Yeh catalyst rns right there
Agm 7th September, so hopefully some very good news before then or they will have a hard time accounting for themselves
Nickshaw. Nope. We may get a spike but I’m not expecting a boom.
Not much boom anywhere as far as I can see on any news.
Long term slow burner to Production imo, if we ever get there of course.
Good find Fraserd although interesting (concerning) to see what little impact securing funding has had on SOU SP. Of course could be many different factors not relevant to CHAR but does show securing finance doesn't necessarily result in an immediate rerate.
Good find fraserd. If a minnow like SOU can secure funding, Char would likely also be able to. It appears there is strong political aswell as financial support for new gas projects in Morocco. With a plan B for Chariot, it means potential farm-in partners won't be able to make unreasonable demands.
Sound Energy plc
("Sound Energy" or the "Company")
Project Finance Update
Attijariwafa bank conditioned project financing offer of up to US$237 million, the first of its size for a gas field development in Morocco
Sound Energy (AIM: SOU), the transition energy company, is pleased to provide an update in relation to the project debt funding for the phase 2 development of the Tendrara Production Concession and announces the receipt of a conditioned offer made by Attijariwafa bank.
Project Debt Funding
The Company announced on 23 June 2022 that it had entered into an Arrangement and Mandate letter (the "Mandate") with Attijariwafa bank (the "Arranger"), a Moroccan multinational bank and one of the leading banks in Morocco, under which the Company mandated the Arranger in relation to the arrangement of project debt financing for the Phase 2 development of Sound Energy's Tendrara Production Concession (the "Agreement").
Under the Agreement, as amended and extended, the Arranger was mandated to arrange a long-term project senior debt facility with a term of no more than 12 years of up to 2.250 billion Moroccan dirhams.
The Company is pleased to announce that the Company, on behalf of the Tendrara Production Concession partners, have now received a conditioned offer from the Arranger for a maximum financing of MAD 2.365 billion (c.US$237 million), proposed to be 100% underwritten by the Arranger, subject to the conditions precedent to the conditioned offer being satisfied prior to 30 September 2023 (the "Conditional Offer").
Material terms of the Conditioned Offer
• Borrower: A to be newly incorporated Tendrara Production Concession partner special purpose vehicle incorporated under Moroccan law (the "Borrower").
• Loan amount: MAD 2.365 billion (approx. US$237 million) subject to a maximum gearing level of 65%.
• Term: 12-year term including 2 year grace period from first drawdown.
• Security: Customary security package over Borrower and Tendrara Production Concession.
• Interest rate: Optionality provided to the Borrower to select from fixed rate, variable and fully floating alternatives with at customary margins for hydrocarbon infrastructure development project financing facilities.
• Use of loan proceeds: Design, drilling, construction and operation of wells, a treatment facility (CPF) and a gas pipeline (from CPF to GME) to transport and sell the natural gas produced under the Tendrara Production Concession to the ONEE, as well as all related activities.
• Conditions Precedent to the Conditional Offer:
o Governmental and Ministerial approvals.
o Tax authority clearance of loan structure.
o Amendment of certain Governance documents to lenders satisfaction.
o Amendment of Gas Sales Agreement to lenders satisfaction.
o Conclusion of Pipeline interconnection agreements to the lenders' satisfaction.
o FEED update to len
I'm no longer waiting for fid, but gsa, partnering and AGM RNs will hopefully appear "soon", of course this is char so more months of radio silence and maybe another curve ball like the water plant!
Yip agree Nick,the level of volumes and the current SP is imo a confirmation that there wont be anythn come Friday,well we might get some brokers rerate theory AGAIN.....
Zero chance of FID this week. That was all but confirmed last week in the end of year RNS
Tick tock
Hi Surfit
I agree, I think we would all like to see some numbers around the renewables/hydrogen parts of the business, but as you rightly said in one of your earlier posts, at least some of the proceeds from any Farm Out will undoubtedly be filtered through to progress those other 2 “pillars”.
I feel there is a ‘running order’ tho, in that until we/the BoD can quantify what proceeds are forthcoming from the farm out, it’s very difficult to allocate portions of it elsewhere to other areas of the business, meaning it is impossible to quantify what further funding is required (and available) to make up balance.
I think we need to be patient on the gas side, in order to then budget (and negotiate) correctly on the rest.
Regards
Hey Whimax,
I think it was on balance probably a good call, If you look at what can happen with Premier Oil in that they lost control of their debts that were sold on to others creditors (ARCM Hong Kong in particular ) with ARCM shorting on the company as a mitigation and then later called in the debt...with catastrophic results.
https://www.google.co.uk/amp/s/www.thisismoney.co.uk/money/markets/article-7767747/amp/Premier-Oil-target-record-132m-short-bet-Hong-Kong-hedge-fund.html
I think Petra Diamonds over spent and are paying for it now.
In addtion by financing FEED CHAR we're in a better position to potential secure thier own debt....but as you say and above....it can be risky....as before I really want to see some firm financing for the renewable/ hydrogen projects.
Best Regards Sft
Morning Surfit
You said “ I am hoping he as learnt a lot but he is has changed ract on loans and used share raising as the way to get us over the line thus significantly diluting the SP.
Will he use the same time of fundraising for developing the energy elephant in Africa.”
Let me start by saying I know nothing about the Petra or it’s finances, but what I would say is, “ “dilution” although often much maligned and not popular with share holders, is, more often than not, the safest (if not the only) route for a company in exploration/development stage.
Let’s say for example Chariot had (even managed) managed to persuade someone to fund/loan Anchois exploration and development 2-3 years ago, with the expectation that 1st production would be mid 2025? How much collateral would be required to secure the loan, at what interest rate would it have been agreed at, how would interest be paid for, but MOST importantly, what would happen if timescales slipped by a year (due to something like another Covid) and the loan couldn’t be repaid on time? What happens to the asset? At what price, and how big a dilution is then required to fund/pay off the loan (even if someone’s willing to invest)?
I’ve seen plenty companies take out loans, see timelines slip, share prices tank, and then have to resort to CLN’s aka Death Spiral Funding to stay afloat.
I appreciate dilution isn’t pleasant, but the alternatives can be catastrophic imo.
I did purchase some additional Chariot shares last week because I was impressed with the statements in the final results. I think this is captured by Malcy’s comment today:
“ As elsewhere these are only final results but it does show that things are moving fast at Chariot and I can still see massive upside for the company that is doing all that I have wanted them to do.
Outwith the results themselves the real draw of the announcement is that Chariot is clearly in receipt of ‘multiple’ offers as they continue the partnership route. Indeed the company say that they have seen a number of significantly larger E&P’s in the process which adds to the excitement and also that they are all well funded enough to self-fund the development.
Indeed, if the farm-in goes as well as I am hoping for it could be an old fashioned ‘cash and carry’ in which Chariot recovers a good deal of its costs and remains with a big interest in Anchois, a highly desirable outcome in one of the best geographies in world E&P. ”
As for your comment about just being in for my percentage, I would remind you of my previous statement that I have never sold a Chariot share in the many years I have been a shareholder. Unlike you I am an investor not a trader. I do believe we will have news soon as one of the many offers is accepted as that makes good business sense
Hello Frenan10
It troubles me greatly. Does it trouble ii''s? Post contract, farm in and Sanction will be a very good indicator: The market will adjust the sp to its new derisked value but share BUYS will be the indicator of confidence in the WHOLE companies future under AP 's management. That will be judged against his previous company's in particular Petra Dimonds.
https://www.proactiveinvestors.co.uk/companies/news/931898/the-star-that-burns-twice-as-bright-burns-half-as-long-petra-diamonds-completes-its-falls-from-grace-and-looks-unlikely-to-rise-any-time-soon-931898.html
I am hoping he as learnt a lot but he is has changed ract on loans and used share raising as the way to get us over the line thus significantly diluting the SP.
Will he use the same time of fundraising for developing the energy elephant in Africa.
As a Whimax correctly reminded having ties with Total is very reassuring.
I am guessing the next 3-6 months (post Sanction?? time line??) will reveal if the market has confidence in APs future renewable/ hydrogen ambitions and the companies ability to safely finance it.
GLA
Getting intresting and closer. 🤞
Rgds Sft
Ah ICB888 it's good to see you, are the short term indicators turning positive again for chariot?
Do you think this might be "the time" Or are you just in for your %age.....
“Gas prices jumped in Britain and Europe on Monday morning as the abortive Russian coup by the Wagner group raised concerns about supply disruption.
Benchmark UK month-ahead gas prices were trading up about 5 per cent at 84p per therm by late morning, having earlier spiked by more than 13 per cent to more than 91p per therm. The earlier rise mirrored an increase in the Dutch benchmark gas prices.
Tom Marzec-Manser, head of gas analytics at Icis, the price reporting agency, said: "Are the developments over the weekend in Russia significant for the gas market? I would say yes: although Russia is now in terms of pipeline supply to Europe only about 6 per cent of supply, it is still significant.”
Good background information for Chariot regarding European demand for gas and the rising prices being paid.
Malcy has long had a love for Chariot and today he comments on the end of year results as follows...
Outwith the results themselves the real draw of the announcement is that Chariot is clearly in receipt of ‘multiple’ offers as they continue the partnership route. Indeed the company say that they have seen a number of significantly larger E&P’s in the process which adds to the excitement and also that they are all well funded enough to self-fund the development.
Maybe a red herring but Vivo is now wholey owned by Vitol https://www.fuelsandlubes.com/flo-article/vitol-group-completes-takeover-of-vivo-energy-plc/
Vitol has been a West Africa operator and still has a partnership with ENI in Ghana https://www.eni.com/en-IT/media/news/2023/05/eni-gnana-octp.html. They have very deep pockets and could easily fund the sort of farm-in we all want.
Chariot drilled Rabat Deep with ENI. Though ENI have just commited a very large sum to buying Neptune.
Maybe a joint ENI/Vitol farm-in ?
Hi Jimmy.
Sales for the industrial market will be done through a joint venture with Vivo. Our partner will receive part of the price.
Regards
That’s true Fraser,
Also chariot will be selling cng to the industrial market and the current price there is $16 mcf, so I think $11 mcf seems a reasonable average to use for valuation purposes.
Jimmy
I think the most recent gas sales agreement was by SDX earlier this month. They previously had all their deals at $10 to $12 but negotiated higher a few weeks ago.
If they they treble my investment on FID I'm satisfied.
At the end of 2022, the were c. 80 million outstanding share awards that, with the passing of time, will be eventually converted into shares, for an 8% dilution to us (see note 26 to the financial statements).
This 80 million number includes shares awarded under both the Long Term Incentive programme (LTIP) and the Non-executive directors restricted share unit scheme (RSU).
Just during 2022, more than 44 million shares were awarded to management and employees under both programmes. As far I as know, only 16 million of those awards were informed to market.
At the current rate, management will own 25% of the company (at no cost) within the next 4 years. By the end of the decade, c.40% of the shares will be controlled by management, at no cost for them.
What do you think of that?
Regards
Hi Jimmy.
We have a preliminary agreement to supply 60 mmcfd to the state energy company (ONEE) at an unknown price.
Sound Energy has a gas sales agreement with ONEE, for 30 mmcfd, at aprox US$ 8/mcf. I think we have cut a similar selling price for our future gas sales to ONEE.
Then, I see an average gas sales price (for ONEE, local industrial customers and potencial exports) of US$ 9/mcfd as more realistic and conservative.
Regards
Ferna