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LONDON (Alliance News) - Chariot Oil and Gas Ltd shares rose on Thursday after it said it will focus on finding partners for its assets in 2016 and said the company has a firm footing as it remains debt free and its low level of commitments are fully funded.
Chariot shares were up 8.7% to 5.65 pence per share on Thursday morning.
"With its giant asset potential and operatorship of licences with low commitments and good commercial terms, no debt and fully funded work programmes, Chariot stands in good stead to succeed in this lower oil price environment despite the challenges that the sector as a whole continues to experience," said the company.
With the fall in oil prices and the wider sector adjusting to try to remain competitive in the current climate, companies are looking for new assets or potential mergers but are also being cautious with M&A activity to hoard cash.
Chariot Oil has been trying to farm-down its interests in numerous assets, and although it is confident about ongoing discussions, it warned any deal is likely to reflect the current market environment.
Moving forward, the company said obtaining new partners for its assets to progress drilling would be a "key focus" throughout 2016.
"This year, we have continued to protect the portfolio as far as possible whilst maintaining a position of financial and technical strength in order to partner and progress in the current environment. We remain encouraged by the interest in our datarooms and our ongoing discussions, and we will continue to focus on our prudent risk management strategy with the aim of taking our priority targets through to drilling," said Chief Executive Larry Bottomley.
Chariot and its partners in Morocco have agreed to extend the Rabat Deep licence for a further nine-month period to allow the venture to complete its analysis of the seabed coring programme. This will be followed by another phase of exploration which will involve the drilling of the priority JP-1 well.
The company is also considering converting its Mohammedia Reconnaissance licence into an exploration permit as it believes it has identified a significant follow-on target should the JP-1 well be successful.
In an attempt to prioritise assets and strip out unnecessary costs, Chariot has decided to not enter the next exploration period at the Loukos field in Morocco to conserve its finances.
In Mauritania, Chariot extended its C-19 licence so it can analyse the seabed coring programme, similar to what is happening at the Rabat Deep licence in Morocco.
At its assets offshore Namibia, Chariot aims to complete a 3D seismic programme in 2016 and is currently in the process of dishing out a contract whilst looking for a potential partner.
At Chariot's asset in Brazil, contracts for the 3D seismic programme have been exchanged, with 3D seismic operations to start in the first quarter of 2016.
At the end of September, Chariot had a cash balance of USD39.0 million.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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