Member Info for BouncyDeadCat

See Page 9.
https://www.chariotenergygroup.com/wp-content/uploads/2022/09/Presentation_AGM_080922_website.pdf

The distance between CPF and GME is less than the distance from the Anchois well to shore and it's much cheaper to lay pipe on land than it is under the sea, so assume it will be part of the capex budget.

Getting an agreed price from the offtaker is essential for getting to FID.
Once they have this price agreed and have signed the long term sales contract - one needs to ask the question - Do they even need a farm in partner? SocGen could sell Chariot corporate bonds at a 9% coupon (27% return over 3 years for the banks that invest in them) and Chariot would get the capital to fund the Anchois infrastructure build.

A farm-in partner would be preferable if Chariot wanted to develop the wider Rissana Licence area in parallel with Anchois over the near term. But what stake would they be willing to give away for quicker expansion? If Chariot were to pay back the initial Anchoic infrastructure costs over 3 years, they would then have available cashflow to invest into further exploration of the Rissana licence.

Partnering now would validate the entire project in the eyes of the market and would likely give a higher short-term SP but would lower overall long-term earnings.

Going it alone would likely be more of a slow burner for the SP but with greater appreciation of the SP over the long-term as a greater proportion of the earnings hit the balance sheet.

I currently don't mind which route they opt to go for and I'm sure they're going through that due diligent process in conjunction with their plans for green hydrogen & their solar partnership with Total Eren.

Negociating the contracts (with all the work involved in getting to FID) could well take longer than building the (relatively simple) infrastructure to extract the gas.
[Two wells already in situ on the seabed].

Surfit,
Agreeing on a gas sales contract price isn't going to be a quick thing to sort out.
It's likely that Chariot will agree X price with a downstream player who in turn will agree prices with industry & power stations etc. So Chariot won't receive an agreed sales price per mcf of gas until the downstream partner(s) have done their work (because the price they are able to sell at will effect the price they are able to buy at). If some of the gas is able to be piped into Europe, this may add more time to the process (albeit better margins). They will also likely need to come up with a hedging strategy for future years too.

Oil & gas contract negociations tend to move at a glacial pace, but because of the sheer lack of supply of gas at the moment, it will likely be significantly sped up in this case - that doesn't mean it's going to be quick though.

Largest power station companies in Morocco:

TAQA
Safi Energy
Endesa
ONEE (The only Moroccan National company in this list)
GDF Suez
Mitsui
Nareva

Surfit,
I think you're confused.
Maybe that's why you're worried.
The Moroccan government have partnered with Chariot (via a 25% stake).
They are not a Chariot's customer.

Buy rating: Bank of America raises Rio Tinto price target to £70 (from £60).
Buy rating: Goldman Sachs raises Rio Tinto price target to £63 (from £57).

Padfoot,
Sure, but I wouldn't describe 5-10% lower as significant. I'd expect that on a continuation of rate hiking.

Padfoot,
Not by US major commercial entities, no. If Asia is willing to pay the market rate and Europe isn't, then the gas will simply go to Asia.

If Biden wanted to do Europe a favour, then he could instruct the state strategic reserves get sent. But I doubt he would do that tbh. The easiest way for Europe to get gas is pay what it's worth.

Exactly Jimmy.

When it comes to implementing price caps, it is actually that simple.
Price caps have been tried many times before and they simply can't/don't work. You just need to study history to understand that.

The US government will not order commercial producers to feed Europe at the expense of profit (and tax). If you think that, then you don't know America.

Padfoot,
Thanks for your thoughts.
85% storage capacity = 22% of annual consumption with the majority of that consumption happening through winter - so I'm not sure if that's even going to be enough to get them through to January.

In terms of pricing - zoom this chart out 5-10 years. I think it explains the bigger picture around gas pricing a bit more clearly.

https://tradingeconomics.com/commodity/eu-natural-gas

Jimmy,
A price cap is never going to work. It's just another example of clueless EU bureaucratic hubris.
Gas is bought and sold internationally as it is priced purely on the dynamics of supply and demand. The EU literally has zero say on the supply side of things as it hardly produces any of the world's gas.

EU: 'We won't import any gas above $xx'

Price of gas goes above $xx which shifts supply to countries prepared to pay the market price.

EU: 'We are going to scrap the price cap'.

If you're prepared to buy at 18-19p and have been doing so, then you should be ecstatic to buy at 15.5p-16p.

It's a topsy-turvy market, so who knows. Fear often drives irrational stupidity.
I saw it drop to 15.65p which was too cheap a price to pass up, I had the funds available, so I snapped up another 60,000 shares and saved myself £1,200 on what was an already very cheap price (18p) for the asset they hold.

Price caps
Never.
Ever.
Work.

Ever!

SpeedBilly,
The jam is ready, it just needs putting into jars ;)

Padfoot,

"Gas prices are due a significant correction downwards"

On what basis?

The war in Ukraine is getting protracted (which is holding gas prices high).

Europe needs to build a lot more LNG terminals if relatively cheap US gas is to replace Russian supply.
(LNG terminals take up to 5 years to build).

Interest rate hikes will reduce gas prices a bit, but not significantly because of the huge demand side and the essential nature of energy.

So I don't see a case for a 'significant' correction downwards until the war ends and Europe removes Russian sanctions.

Genuinely interested in understanding why you see it differently?

yesterday was a good buying opportunity. Hopefully those who also thought so, did so :)

It's probably worth mentioning that in 2007 all credit agencies rated the American mortgage credit default swap market (including sub-prime in the US) as AAA.

I don't see these western rating agencies as credible, if they were, they would have downgraded the AAA rating they gave the banks who created these instruments. These credit rating agencies are an extention of the banking cartel and just another example of institutional deterioration in the west.

A better example of how highly a country is rated is not through corrupt scorecard agencies, but where business is investing. eg. Money where mouth is.