Member Info for BouncyDeadCat

Thanks for the reply Jimmy.
Yes, in the post I was defining positive free cashflow as net revenue. Free cashflow would be gross revenue and as you suggest, would be a lot higher than net.

Based on 1Tcf and the variables given, do you agree on the SP range of £1.39 - £2.47 ?

but from the announcements we've had so far Re: drilling results, it looks like we may already have 1Tcf of provable reserves located in Anchois (& probably a whole lot more in probable reserves around the satellites that would need further drills to confirm and convert to proven).

So based solely on a verified CPR for a proven gas reserve of 1Tcf when/if it were to come - what is the share price worth based on Anchois alone?

Well, to be ultra-conservative, at the very very low end, 1Tcf @ $8 per mcf = $8 Billion.

From what Chariot have disclosed regarding the economics of this project, the Net Present Value -10% discount per year (NPV10) values Anchois at $1.5 Billion. This is based on a very low rate of them selling gas at $8 per mcf.

This means, even after subtracting a 10% discount per year, they can expect $1.5 Billion in positive cashflow (net revenue) for working this asset and selling the gas at $8 per mcf.

In very simplistic terms, stock price often equals the NPV of all future dividends. Now that's not to say that Chariot would hand over all of that $1.5 Billion in net revenue to shareholders in dividends. But it can be a useful metric to value the share price based on the net revenue that the project is able to throw off during its profitable lifetime.

$1.5 Billion/827m shares = £1.39 per share.

Now this is all based on extracting 70 million standard cubic feet per day and selling it @ $8 per mcf.

$8mcf was the price of gas 4 years ago during a secular downtrend in gas prices. The price of gas is a lot higher now.

Also, based on the excellent quality of the gas and the porousness of the reservoirs at Anchois, it may be possible to increase the extraction rate from 70 to 90 million standard cubic feet per day.

If you run the numbers @ $11mcf (still low compared to what gas is priced at for the next 3 years) and increase the extraction rate from 70 to 90 million standard cubic feet per day, the NPV rises significantly to $2.66 Billion.

$2.66 Billion/827m shares = £2.47 per share.

So, based on proven reserves (CPR), agreed rates with offtakers and what cubic feet per day the engineering team decides to extract at. NPV will likely range between $1.5 Billion - $2.66 Billion and SP between £1.39 - £2.47.

IMO.

Please comment if you disagree with anything or if you have run your own numbers that may highlight any discrepancies in what I've written above. Thanks.

the abuse Nordell was getting from the start.

He was only posting charts and technical analysis. He never tried to deramp and continually proclaimed that Char was a great investment over the medium to long term. Compared to some who spread fear in order to try and get the price they want (it doesn't work, but they try anyway).

Lots of people want in on this stock :) it's just a case of what price are you happy to buy at and more importantly, what price are you prepared to sell at? ;)

*occurrence

jeez, why is there no spellchecker on LSE for typos?

*accumulating

I bought quite a few at 2p too. It was way more of a risk at that price though as the proven gas asset at Anchois was too small to be a viable stand alone development with just 307Bcf in discovered reserves. It's a very different story now that they've drilled another well and proven resources upto 1Tcf.

Why not put all £20k in at once? Because I like to average in and buy the dips.
Whilst I accumulate, I like to wake up in the morning and be happy to see a -5% down day as an opportunity to buy the dip as much as I am happy to see a +5% rise for what I already hold.

I appreciate that an awesome RNS could drop at anytime and that's fine too. I have enough stock for that occurence to make me happy too.

I guess averaging in by buying in tranches is a way of occumulating what I see as value without it being a stressful experience.

This is just my perspective;

I've decided to buy in 10k tranches for this years ISA. Allocating all £20k allowance to Chariot.
At current prices that's roughly £2k per 10k tranche.
1p difference in SP = about £100 for a £2k tranche of shares under 20p (+£5 fee per trade).
10,000 shares @ 18.5p = £1,850
10,000 shares @19.5p = £1.950

So it doesn't matter a whole lot where I buy between 18p - 20p. But when it drops a bit I'm happy because I can get a better price to allocate and it averages out the bumps. I'm not trading it, so getting the absolute lowest possible price isn't my aim.

My anticipation for the SP is: 50p+ by year end (providing we've had the CPR and debt finance agreement signed) and over £1 by 2024 (building of infrastructure is underway).

I've been buying all the way through from 2p-20p.
On a risk/reward basis; Char is actually a better investment now at 20p than it was at 2p.

https://www.youtube.com/watch?v=lfrvOEnoaCM

You.
Could.
Not.
Let.
It.
Lie.

Could you.

(said in a Vic Reeves voice)

in under 20p.
Happy with that for starters.

They could change the tax rates on pensions before you get there Tom. Like you say, it's delayed income, not a tax wrapper.

Tom, When the time comes. £50k per year ain't gonna be anywhere near enough to live on in retirement.
And with the national debt where it is - they won't raise the limit - they'll collect the tax.
imo.

I would have thought the benefits of zero tax (ISA) on the way out (if you were to make significant capital gains) would benefit you more than any rebate benefit you receive on the way in (with a pension). At least it does for me and I own a Ltd company and pay into a SIPP which is entirely deductable from company profits.

Pensions are a great way of offsetting tax initially, but you get taxed heavily when the time comes to withdraw it as income to live off in retirement.

I used to load up my SIPP and sort of neglect my ISA until a couple of years ago when I realised over the long term, loading up the ISA first was the better strategy. At least it is for me. I appreciate you may have a different set up than I and I appreciate your reply.

Deathandtaxes - Do you mind me asking why you sold your ISA to put it into your pension?
If you're expecting to make any capital gains - an ISA is way more tax efficient than a pension.

So if it goes above 24.3p it’s soon going straight to 32p and then 43p.
Hopefully it doesn’t go above 24.3p tomorrow - what about my ISA! :)

Wimax,
Yeah that seems about the right price if you wanted to take a small top-slice as profit.

Put these people inside a paper bag and they'd argue with themselves :))
Prostitutes have a profession, professions aren't just for pilots.

Anyway, what's your price prediction for Char by the end of this year?
And how about the longer term 3-5 years?

Cleeve, you don't need to be a brain surgeon or a lawyer to have a profession. You're obviously a snob when it comes to Professions ;) Each to their own. Carry on :)

If it can consolidate around the 20-22p range for another few days, I'll be happy.
We get a fresh £20k ISA allowance tomorrow and I'm going to put the full allowance into Chariot as I don't see any better stock out there based on a risk/reward basis.
I'll probably step buy it in £2k-3k-4k chunks on down days but I'll also be concious not to take too long to fill the allowance as that CPR report could drop anythime in the next few months and then it's going north quickly imo.

DYOR, but the analysts conservative 12 month price targets look too conservative to me.