Member Info for BouncyDeadCat

Whimax,

Yes, it's a risk. But the possible/probable upside probably outweights the downside by a significant margin. Anchois could be 7Tcf, which is big.

Loukos is in the same basin as Anchois, has the same geology and is at the same depth.

And let's not forget, Anchois was also an 'overlooked' asset when Chariot first took control of it.

If the onshore drilling of Loukos were to be a failure, then I guess Chariot will have to do a deal on Anchois as it is now. 0.7-1Tcf.

Surfit,

I've been thinking about that and for 70bcf, I think they could probably build their own smaller onshore processing plant.

If they were to get $40-$50 million in back costs from an Anchois farm-in, that would probably be enough for 4 producing wells and a small processing plant onshore.

I think they're going to move very quickly on Loukos. They appear to have been studying the data on it for quite a long time and there are onshore rigs currently available in Morocco.

Whimax,

We'll see.

If they were to announce mobilization of onshore rigs next month for subsequent drilling the month after - as an investor - would you be prepared to wait a bit longer Re: Anchois partner news?

The 3-4 wells that Chariot will be drilling in Loukos will also de-risk some of the high-probability, but as yet untested resources that Chariot have identified within the larger Lixus licence block.

Which ties in with my theory that this raise was necessary in order for Chariot to ultimately keep a larger stake of Lixus.

If chariot drill Loukos this year and don't announce a partnership on Lixus prior – then I'd say this theory would be pretty solid at that point.

https://stream.brrmedia.co.uk/broadcast/64bfd25bbd4f8d76ddc59eb9

PI's subcribe for double the amount of shares on offer under the placing.

Kingbilly/Smyth is the same person talking to him/herself.

Kingbilly 👇

Making a negative observation about a company action and then trying to understand the timing of that action isn't whinging Smyth.

'Whinging' would have been repeating my surprise & annoyance everyday ad nauseam.

There are some who come on here and whinge about the same things 5-6 times per day everyday. Yourself included.

If I had more than a couple of 'surprises or annoyances' over what the company were up to, I'd just sell up and invest in something else 🤷‍♂️

ICB888,

Whingers are gonna whinge.

They whinge when there aren't as many institutional investors holding as they would like, and they whinge when a seasoned institutional investor steps in and buys a massive chunk of the company 🤷‍♂️ 🤷‍♂️ 🤷‍♂️

Indeed Gooner. He's run the numbers and he's come to the same conclusion as us. Chariot is way undervalued based on the Anchois asset alone. I don't think people need to overthink it, Askar Alshinbayev just has a lot of conviction on Chariot.

He's bought in at around 15-18p.

Rest assured - He's here to make money on his stake in Chariot. Lot's of it.

It's why he bought the stock.

Askar Alshinbayev is a very serious commodity investor. He's spotted the same opportunity many of us have been discussing this last 12-18 months.

"partnering is important because it will help us to fund the project while minimizing dilution at the parent company level. And we hope to announce something on that soon".

I still, very much think this raise is because of Anchois negociations and how they are progressing.

From the recent interview with Chariot's CFO.

https://youtu.be/METPki3mdQY?t=276

Jagua,

You could have opted to right up to and slightly after this RNS.

Fernan10,

Negociations over Oil & Gas assets are nearly always convoluted. More so when it comes to smaller O&G companies who don't have the required amount of capital to develop the asset(s) they own and thus need to negociate a farm out (or multiple farm-outs) to proceed the project.

And of course, the aim of any large farmiee is to try and get as much of the desirable asset off the smaller player as cheaply as possible. Dangling a bit of extra cash over and above back-costs can be a very cheap way of acquiring a larger share of the desirable asset that's being negociated over.

I still haven't heard a better reason for why the raise now. If, as we are led to believe, the deal is close to completion (with back-costs being paid in cash) why not wait for the $50 Million to arrive prior to drilling a new asset?

It would be a rare kind of farm-in if some form of back costs weren't paid in the form of a cash payment.

Last time I had a hunch it was that Chariot were going to drill Namibia alone without a 3rd party farmed in - nearly everyone on here – including the resident experts - were telling me there was zero chance of that happening.

Until it did of course.

Hi Jimmy,

Good reply Re: point 3.

Regarding points 1&2. The raise wasn't to secure the onshore acreage - it was to drill 3 wells. I suppose the commitment to drill alone could have secured them this new onshore acerage, but they'd have the money to drill after back costs from farming out part of Anchois, but they elected to raise instead, which is why I think they did so to keep hold of more of the Anchois asset...

I think the point of why dilution/why cash now is being missed by some.

I don't necessarily think the 'early cash' narrative for the onshore asset equates to 'much earlier'. It may come a bit earlier than Anchois, but probably not a whole lot earlier.

The processing facility needed for Anchois still needs to be built and surely that's what they will be using to process the onshore gas too?

Maybe what's more likely to happen is that, as part of the Anchois farm out agreement, Chariot will agree to give up operatorship in exchange for keeping a large chunk of it on a free-carry, plus $50+ Million in back costs.

Any relinquishment of operatorship will take the project timeline out of Chariots hands and place it into the hands of the farmiee.

With $18 Million (from the raise) they can drill the 3-4 onshore wells and with an additional $50+ million coming in from Anchois back costs, they could afford to develop the onshore licence without a partner under their own efficient timeline (developing onshore wells costs a fraction of offshore).

That would leave them with a percentage of Anchois without needing to allocate anymore capital to it along with their own smaller project as owner/operator. 'Early' revenue could come if (as part of the partnering contract) the new operator agreed to build the processing plant as a project priority (which Chariot could use to process their onshore gas).

Of course this is all conjecture as we have very little detail to go on. But what I have been trying to figure out is why the raise now, instead of waiting for the back costs to come in - which must be in the region of $50+ Million?

I can only think it has to do with the partnership offer(s) on the table for Anchois.

During the partnering negotiations I can only assume Chariot were offered additional cash to drill the onshore wells under the new licence for less retention of the Anchois asset and because of the sheer value of Anchois, Chariot instead deemed a raise and dilution of 9.2% (and retaining more of Anchois) better value for shareholders over the long term than relinquishing more of Anchois to the partner.

What little Chariot have told us about this onshore licence is that its future gas has been earmarked for industry and with Chariots recent partnership agreement with Vivo Energy (a gas distributor to industrial customers in Morocco), they have the means to deliver.

Meanwhile, the larger partner/operator of Anchois can concentrate on supplying ONEE power stations and Europe.

Thoughts?

i'm as ****ed off as anyone else with regards to this recent raise, or rather, the timing/price of it.

the company appears to be very close to fid and there are a number of interested parties who they're in final discussions with. it can't be long now and they do have enough cash to keep them going until fid (if they were to accept whatever deal was put in front of them).

so i can only assume that in order to get the deal they want – they had no choice in doing the raise.

we don't know what deal(s) the potential partners have put on the table, but one can only assume that whatever the deal is/are, it would be much much improved if/when chariot had this new licence in the bag and the cash to drill it. i think that's the logical explanation for why a raise now. anyone got a better explanation?

if chariot were offered terms that are say 25% better on anchois with this additional licence and no carry, then a 9.3% dilution makes perfect sense.

hopefully this is just a cold business decision based on hard numbers regarding what delivers the most amount of value over the next few years rather than the next few weeks.

the following statement has also been repeated in both yesterday's and today's rns;

“the company continues to make good progress on its partnership process for anchois, with the fundraise providing an improved financial position ahead of finalising negotiations.”