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Hi surfit.
My answers to your comments as follows.
1. the small amount of cash paid out to aquire i.e, the VERY limited FREE carry: instead we have we have sold for finance ( see 2).
Answer. The initial payment was $10million, but further lump sum payments of $15 million in cash and $50 million of a lone note or 20000 enog shares. Plus the financing of the capex development plus the financing of next well and seismic plus 7% royalty on enog production, market has certainly not grasped that yet.
2. possibley the partner, namely the debt presently carried and the ability to obtain finance...this MAY be a factor?????? Comments???
The partner is uk listed, strong cashflow and balance sheet. The partner has more than enough capability to fund the development including chariots share.
3. potential risk on onshore not being commercial viable I.e.the drilling is to confirm.
Yes, until itβs drilled there is a risk, but drilling Avo anomalies in this basin has an 85% success rate. Drilling up dip from a known discovery mapped with 3D seismic is very low risk indeed, as demonstrated by chariot at anchois 2.
4. Finance required to fund to onshore sale.
Yes, finance required. My understanding is the onshore retail customer avivo, wil provide such funding. In addition there is an opportunity to use spare capacity in the SDX pipeline which they are keen to use.
5. To recive the 15m this requires addtional OFFshore drill with confirmed flow rates (correct/incorrect?).
The additional $15 million is payable on final investment decision , the forthcoming well will include flow testing of multiple reservoirs in order to finalise the well completion design, one does not want a deeper high pressure gas impeding a lower pressure shallower gas horizon, which if confirmed would require separate production tubing.
6. Management realisation (RNS) that the have to sell or finance/ understand revenue return on the South African "renewables" folly.
Certainly the market is giving little to no value for that investment, best if itβs spun out.
7. Hydrogen venture costs/return/ finance.
This is a long term project that costs very little at the moment. Plans to build a small pilot plant are low cost.
8. ONshore success REQUIRED to keep the company liquid to get to OFFshore production.
Given the fact that the anchois 3 well will be drilled in august, I expect FID by q2 next year, which in turn will result in further farm out cash to chariot. Will most likely coincide with start of onshore production.
Just my views.
The key point about chariots farm out is that it effectively removes equity dilution risk which holds back mostjunior explorer valuations.
Jimmy
Hey Jim, appreciate the replies.
Couple of points that for form and deeper diving:
1. The market would surely understand the farm in deliverables but I think the market (or even the 6%, pure speculation of course) was POSSIBLY expecting more cash I.e. a % free carry rather than loans.
2. Looking at Energeans debt and ability to finance
Referencing Simpley Wall St
https://simplywall.st/stocks/gb/energy/lse-enog/energean-shares/news/energean-lonenog-has-a-somewhat-strained-balance-sheet
BUT
But as of 21st of march 2024 and reference Energeans 2023 full year accounts:
"...Funds were used primarily to repay Energean Israel's $625 million notes due in March 2024. As a result of this refinancing, Energean's weighted average life of debt has been extended to more than six years and results in a weighted average interest rate of 6.13%"
Sft note: I am not sure if this is a factor for obtaining further debt or Morocco financing.
3. 85% looks very good!
I am invested in Kistos and they have been involved in 2x failed ( not commercially viable) drilling campaigns (Hollad and the Benriach, WOS).
I am not sure what the % was allocated to Benriach
https://www.oedigital.com/news/502301-totalenergies-to-spud-highly-prospective-benriach-offshore-well-in-q2
4. " My understanding is the onshore retail customer avivo, wil provide such funding" VERY much appreciate that information Jim, but where is the information from and is there a precedence for this already.
5. Not giving the 15mil straight away, but via a caviate, could this have spooked the markets or investors some what???
6. No further comment other than it may be precived by investors as a reflection of poor management decisions / directions on running the company.
But the market possibley react well to cutting loss leading direction/ projects and if the do cut or manage to sell, could result in a SP lift.
7. Costs are possibley minimal but puts more pressure on the onshore being a success as it is still an financial drain. Increasing risk factor.
Up side is very much of significant potential especial as partnered with TotalEnergies.
8. Fid Q2 for Anchois but no income until production....time line to actual production
Again market investors must be doing calculations on Chariots cash reserves (including last fund raise, 10mil time + meeting 15mil criteria, balancing Loukos success and income to Anchois production.
This is why there is a perception of real risk of a further fund raise required a lot hangs on Loukos
As before, hazard hunting balancing controls, mitigations...risk really starts to get removed if Loukos is FULL confirmed commercially viable.
I thank you for your compised and muture comments and if my points can be undermined all the VERY much better. I KNOW I am short on knowledge but if I can think of them how much better can professional energy analysts do????
GLA
Kind Rgds Sft
I have no idea why you Jimmy take up your precious time to post really good posts to this non holding fudder.
He has asked same questions before , he asks again, and again just in different tone.
How many minutes of your life have you wasted on this one ?
Do not respond ..
Thebold,
If this bb was nothing more than an echo chamber for bullish, pro-company points of view, there would cease to be any value added by anyone posting personal opinions, no matter how qualified to comment.
I welcome discussion that challenges the prevailing bullish sentiment embedded in each of these BBs. Char isn't a lone figure in this regard. And I welcome Jimmy's willingness to explain, in a polite and non-combative way, with anyone who has doubts in any area of the story.
With greater understanding comes a greater conviction to hold a meaningful position relative to one's total portfolio wealth.
Hi OandW,
The OP has played the game magnificently.
Best rgds
The Bold.
The bold have you been on the sherry today? π€ Surfit is a valued member here and if you don't like what he's got to say then just filter him as there are plenty of us here who enjoy reading surfit's posts.
Jeez. I'll miss this BB if we ever get bought out! π
Col. Nathan R. Surft eventual breaks after the masterful cross examination by the brilliant, insightful and eloquent Lt Daniel "The bold" Kaffee
https://youtu.be/7bVg5R5oq0g?feature=shared
π
Best regards Sft π
Haha Surfit. I actually posted a snippet of this a while ago. π
The truth is, is that we are struggling for any momentum whilst still in single figures
If you are invested I think you have have every right to question our position.
Only thing I would say is that you come across as someone educated enough to deliver your own conclusions and you know more than you let us know?
Imo smart and opens eyes if they dare to open them.
Sorry barneythebold shareholderchar or whatever username it is you're using now but the feeling is not mutual.......π
π₯± Keep it up you're doing great......