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@whimax
@theobold
You’re both championing the potential of the onshore campaign and stating net revenues to chariot of $48-60m per year. That assumes 25mmcf/day extraction rate. But even our ultra bullish Auctus broker says only 5-10mmcf/ day in 2025. Why are you expecting such a higher rate?
Mr Plop,
Can you link the auctus advisor assumption that Loukos onshore will only ever produce 5-10mmcf flow rates from a combined onshore well count as you proclaim, if you can do that I will discuss openly, if you can’t then jog on Down a drain pipe or trouser leg.. TTFN.
Ah I see what you’ve done there. You’re saying maybe one day in several years time onshore could achieve 25mmcf if all drills are successful and they turn all wells into producers. Auctus are saying maybe Loukos could yield 5-10mmcf in 2025.
It’s ok. We don’t need a discussion now. As painless and enjoyable as that would have been.
There was never going to a be a discussion plop.
You think your Uber smart be stating ur a proactive chariot shareholder then sowing little poisonous seeds of doubt and making little “ like me im cool “ statements more frequently , however just like all your last incarnations here , you can be seen through rather easily.
Pathetic just pathetic .
Well I apologize for my slightly snide remarks - they weren’t necessary. I took you for a poster who enjoyed a bit of banter judging by your first few posts, but it’s difficult to gage that online so, again, apologies for upsetting you.
Criticising me for posting an opposing/counter balancing view of what the future may hold though is frankly silly. That’s literally the very purpose for these forums. You call them ‘seeds of doubt’ - well to point out the obvious, Chariot is an AIM-listed penny share in the offshore gas exploration business with no proven track record. Oh and they’re down 50% in the last year. But I guess any ‘seeds of doubt’ should be kept quiet lest any potential new investors were to read these messages? I think most here if they’re being honest would wish that they sought and listened to opposing views over the past couple of years, as opposed to seeking confirmation bias in an echo chamber of positivity. I know I do.
But that’s in the past now. (Almost) everything is riding on the back of the next offshore drill now. FWIW I still think the risk v reward makes this an attractive gamble at this price.
Have a good evening.
As I said, just sad and pathetic…a grown adult which I assume you are , is now in the double digit avatar reincarnation on here to gain some recognition , what a sad little life it must be for you.
The purpose of this message board is to discuss peoples thoughts on Chariot. The occasional amusing posts and slight deviations I believe are acceptable, but personal insults aimed at posters because of differences of opinion are both childish and unnecessary.
Mr Plo, I assume you’re being deliberately obtuse here, to fit your argument.
The Auctus broker note, is not being “ultra bullish”. They are basing their 5-10mmcf per year on EXISTING discoveries for the 2 wells already drilled. Chariot will drill another 2 wells within the next few weeks which have a CoS of 65-85% (as close to nailed on as it gets) so an assumption of another 5mmcf from each of those is surely not over egging things? They also have permits for a further 16-18 on shore wells after the ones next month.
25mmcf and $48m net to Chariot from Loukos by 2025 I would say is ultra conservative imo.
Hi Whimax,
The plo poster has no interest in reasonable discussion and even less intention to discuss technicals or potential propectivity..
Mr plo, billboard, et al.. just here to mash and slash any decent discussion.
@whimax maybe it’s best you read the Auctus note dated Jan 29, 2024. You might be disappointed.
It's always good to get different perspectives, but let's try and agree to disagree in good faith, both on the positive side as well as the negative.
According to Auctus, each of the two wells being drilled (next month?) could be brought on stream this year (2024) and could produce 5 mmcf/d each in 2025.
From Auctus dated Jan 29, 2024.
The first prospect to be drilled will be Gaufrette (in line with previous indications). A success could unlock 26 bcf of Best Estimate recoverable prospective (gross) resources with an unrisked NAV of £0.06 per share, representing 75% of the current share price.
The most likely second prospect to be drilled will be Dartois. A success could derisk 20 bcf of Best Estimate recoverable prospective (gross) resources with an unrisked NAV of £0.05 per share, representing 75% of the current share price.
A successful discovery could be brought on stream by YE24. We currently forecast that Gaufrette or Dartois could produce ~5 mmcf/d in 2025, generating US$24 mm of after tax operating cashflow per year with overall development capex of US$28 mm (including exploration drilling). We re-iterate our target price of £0.50 per share.
“everything is riding on the back of the next offshore drill now”.
Not true. If onshore is a success (and with 65%-85% CoS, there is a high chance that it will be), then Chariot head on to offshore drilling later in the year in a much stronger position.
It's my guess that if March's onshore drilling campaign is a success, we approach offshore drilling later in H2 2024 at around the 18p mark. Just my view.
Yes, there is risk. There is always risk when it comes to O&G drilling. Chariot's onshore drilling, even at a whopping 65%-85% CoS could still disappoint. However unlikely that is, it could happen.
However, what's also just as likely to happen is that one or both of the wells finds way more gas than anticipated.
To me, Chariots onshore drilling is 2/3 odds on. Which are very good odds.
Scenario 1. As expected. 5 mmcf/d per well.
Scenario 2. Unexpected downside. Duster/non-commercial.
Scenario 3. Massive unexpected upside (Dartois?).
BDC
Good post.
My negative slant is yet again a 50p target and concern that on shore not sufficient size to have significant impact on the development of char as a producer / spread of risk, as opposed to the anticipation of Anchois. I question that they will produce on shore
The offshore program could be perceived as resulting similar to promises that do not materialise as anticipated and suggested by the BoD similar to Anchois.
What is the credibility 50p target. Will they be suggesting the same in 2030.
Chariot have shot themselves in the foot. The broker targets are meaningless.
Henry,
I don't think Chariot would have applied (and received) EIA and permit approval to drill and produce from up to 20 onshore wells within the next 5 years if they weren't planning to expand Loukos onshore gas production further.
If Gaufrette and Dartois are successful and they start producing circa US$25m per well per year, then I think they'll just keep drilling. At $3m per well for $20-25m per year in revenue, it's a no-brainer for Chariot to keep expanding onshore and probably why Auctus has taken such a positive view on the stock.
Good post Bouncy and totally agree. The onshore is a very decent starter course in itself, but offshore remains the main course. BOTH should be served up very nicely in 2024, in terms of generating value. And all whilst the transitional power side of the business continues to progress very nicely as well. 2024/2025 shaping up very nicely. I agree with you that success at Loukos will get Char to 18p, especially if by then, they have started to put out some confirmatory news re drilling at Anchois in 2024. That should sustain any rise generated by Loukos.
Buy at these lows and then hold for 2024/2025. You will definitely make money, it's a question of how much. I've mistimed my entry at 9.3p (as matter of technical perfection), but not all that fussed. Happy to add more in the 8s.
The only thing that worries me is talk of PRD having the Rig that Char was planning on using at Loukos? All imo and GLA
Hi BDC. Thanks for taking the time to post that - I thought I was going insane.
Re onshore - we have similar views. I hope that base case success will put a floor of c 15 p in place, and arguably amplify the excitement around Anchois. Can I just check where the 65-85% CoS comes from? Auctus says 35% in their Sum of the Parts table.
My belief is the biggest opportunity for the share to give the sort of return most bought in for is success at Anchois East and flow testing that supports 200mmscfd. I haven’t plugged that into an NPV calc yet, but that would surely take us to 100p and beyond in very short order? Do you have any view on the probability of that occurring?
"A successful discovery could be brought on stream by YE24. We currently forecast that Gaufrette or Dartois could produce ~5 mmcf/d in 2025, generating US$24 mm of after tax operating cashflow per year...".
I don´t think that a well producing 5 mmcf/d could generate anything near US$ 24 mm of after tax operating cash flow per year . That would imply an operating margin (after substracting royalties and operating expenses) of c. US$ 13/mcf.
Regards
Mrplow,
See slide 12.
High historic success rate of 80-85%.
Geological similarity to Chariot’s offshore portfolio.
https://chariotenergygroup.com/app/uploads/2023/09/AGM_070923_Presentation_Final_noapp.pdf
Can't remember where I saw 65%-85% specific to Chariot's Loukos targets (Maybe it was RNS or the post-partnering presentation, can't remeber), but Chariot's upcoming targets have similar CoS as historic drills in the same region.
Also on page 12 “Funded for low-cost 4 well campaign”. 2 have been identified (as mentioned earlier). 2 still to be identified, but funding is in place for them. Id like to think they won’t hang about on these either, which I don’t think Auctus mentioned, but were mentioned at the presentation.
If through drilling AE, we get offshore Anchois above 1Tcf that's able to produce 200mmscfd, then sure 100p is possible in a few years.
But first we need to walk before we can run. Onshore has the potential to make the company self-sustaining and profitable. I think onshore has the potential to cover all of our G&A as well as fund more future onshore wells that will further build up the company's balance sheet, and I see Anchois as this massive royalty asset that we have a decent stake in. I think developing onshore production quickly and cheaply is the right strategy to get the company to positive cashflow.
Cavendish believe the upscaled development of Anchois could support production rates in excess of 150MMscf/d. And assuming Energean exercise their option to acquire the additional 10%, they value Chariot’s net 20% carried interest in Anchois at US$595m or 71p per share.
So, if production is increased to 200MMscf/d come FID, then 100p fits Cavendishes existing model.
The share price here has seemingly halved since the partnership deal with Energean was announced in December. Can LTH here offer a view as to why the market didn't react well to the deal, or is it more down to pushing back timelines, or something else? I note that the Director's have all been buying since the deal was announced.
@BDC
Interestingly Auctus had Loukos onshore prospects at 50% CoS until their December updated note which dropped it to 35%. Given Chariot would advise them on the input assumptions for their notes, it doesn’t scream confidence to me. It could be a case of wanting to under promise and over deliver but that would be a change in policy for them!
I appreciate your thoughts around onshore potentially being the foundation of the company. My concern is if Anchois doesn’t proceed for whatever reason, is there too much hubris in mgmt/the board to rightsize operations or will they want to go after another whale?
My hopes still reside around Anchois FID being taken. Assuming Energean exercise the imbedded option then that should easily support a 40-50p sp. FID with a development plan for 200mmscfd would catapult the sp much higher I believe.
In 2019, independent resource evaluator ERC Equipoise Ltd (ERCE) completed a report for SDX, in relation to the contingent and prospective resources of the Lalla Minourd North exploration concession (now renamed as the Loukos license).
One prospect (LNB 1 lower) was assigned an 80% chance of success.
All remaining prospects were assigned a chance of success of between 22% and 35%.
Read page 131 of the report.
From the report: "the key risk for the area and applied to all prospects is the chance of low saturation gas, which can cause britht amplitud anomalies despite low gas saturation (page 129)
Regards
Mr ,
Give me a scenario where Anchois would not proceed, unlike some here who get taken in with your subtle Demi I’m your friend but I’m really not posts, I am most certainly not !
So mr Plop , please extrapolate why iyo , Anchois could or would not proceed to FID.
Before A2 results and The exact same Avo signals were proven..That report you reference did not have any cross data to Avo signals in the unproven areas in loukos bring identical to the fully proven same Avo signals in Anchois.