Member Info for BouncyDeadCat

Yes but you think all and everything needs to be done at once. It doesn't. There is a discovery that can be worked first which will also produce free cashflow.

Do you think a deal will be finalised by Q1 2021?
Doesn't need to be Q1. But at some point during 2021 I think a deal will be done.

If not, what other options are available to the Chariot board?
A combinations of deals during 2021. See below post for what this combination could look like.

Do you think the Board will allow the company to trade with less than $2.5m in the bank, which is a real possibility in the next 3-6 months? The figure of $2.5m is equivalent to Chariots annual overheads.

I believe your figure of $2.5m cash in bank within the next 3-6 months is overly pessimistic and therefore false, so I don't accept the premise of your statement nor question. 2019 YE cash balance was US$9.6 million with no debt and they have cut costs since then.

Looking at the size of the Rissana Licence due to conclude within the next few months, it looks like deals are being done to me.

I'm sure we will get certainty around funding during 2021 and when that certainty comes, I don't think we will be anywhere near your selling price of 11p.

why incorporate the other blocks with Rissana? Incorporate them as part of a bigger 25 year+ strategic gas supply project with the full support of the Moroccan government.

What benefit have the company gained by doing this? Secured acerage as part of a long term strategic gas project. Add more reserves over time.

How long have Kenitra and Mohammedia been marketed for? Doesn't matter. Small acerage now incorporated into much larger block containing greater number of prospects.

Why has the Board been unable to partner on these blocks? Don't know. Maybe in isolation the reserves contained within Kenitra and Mohammedia don't make sense as independent projects, but do when tied back to the larger overall project.

What is going to change in the future around these prospects? Looks like they are being consolidated into the larger project.

Ask yourself why this enormous licence has been awarded to Chariot preciousmaj.

My guess is because a deal is being done behind the scenes and certain guarantees (that aren't yet public) are being met.

Rissana is the size of 4 licences rolled into one and it incorporates the prospective parts of Kenitra and Mohammedia. I don't see that as a negative, quite the reverse.

'No dispute that parts of the previous blocks have been incorporated into Rissana.'

Then I don't know why you're claiming it as an issue?

They kept most of it and gained x4 more acerage surrounding Lixus which they think contains even more gas reserves.

I think what you are missing precioumaj is what would a drill partner or institution be willing to contribute towards a guaranteed $9 billion revenue gas project plus low cos surrounding reservoirs?

You don't take this into account and just conclude: Equity raise. Maybe because of your previous experience with the old elephant hunting board.

But there are far better ways to access capex to build this project than shareholder dilution.

I think the more prudent option would be to allocate a % of the project revenues for either finance or contributions towards the build, or both.

Total capex to extract the gas they've found so far only equates to 4-5% of total revenues. Money is currently cheap to borrow, but even if you were to double the return for a lender over a ten year period, you're still only giving away 10% of the project to finance it.

Offshore drilling is currently the cheapest it has ever been and at $15m per well, there's also room there to do a 3-5 well deal with a drill partner plus some back costs. Make it enticing and give away 15% of the project and they take $1.35 Billion in revenue for discovered reserves, plus 15% of whatever they discover in the surrounding acreage.

If after all the deal making the percentage share of the project looked something like this:

25% Chariot
25% ONHYM
15% Drill/Appraisal partner
10% Financial Institution

I think Chariot share holders would be happy.

Kinetra has been kept and some of Mohammadia (look on the map). They've been rolled into the new licence called Rissana which is x4 the size of Lixus and it completely surrounds it.

more likely than equity raise imo.

'I've been disappointed in the past, therefore I will be disappointed in the future and I've also sold at poor price so I feel I have to justify my negativity towards the stock'.

is what the post reads like to me..

It's good to have opposing views though, and its amazing how different people can read the same thing and come to completely different conclusions.

Join the dots.

That's one way to look at it. I disagree with your assessment though.

If you look at the wording of latest RNS:

'The formal award of the licence is anticipated to occur in 2021 and is subject to the normal Moroccan regulatory procedures and approvals.'

My thinking is, the official timing of this award will likely tie in with the signing of another guarantee being announced (could be funding, could be drill partner, could be some other guarantee that secures development).

Also, carrying out 2D on new acerage doesn't have to mean slowing down development of the current project.

The location of the Anchois discovery, reservoir and quantity of gas is already known and that can be developed in tandem with the exploration of adjacent sands being assessed.

This project can and probably should be developed in stages as it's now absolutely ginormous in scale and reach.

It would probably be foolish to try and do it all at once.

The income generated just from the gas pumped from the Anchois discovery would provide decent revenue. Revenue that would likely provide further funding for exploring this enormous acerage.

If you think strategically, this is probably what a nation state would prefer you do: i) Deliver near-term gas. ii) Secure future reserves.

Well I don't see how we could look at it any other way really.
A country doesn't hand over its entire coastline to one partner unless there are certain guarantees in place (guarantees that aren't yet public).
Also, the BoD of Chariot have, for a while, been talking in a way that suggests they are super-confident (almost certain) that Anchois WILL be going into production soon. This confidence surely comes from behind-the-scenes discussions and deal making.
2021 here we come!

Now that the Moroccan government has essentially become Chariots strategic partner, it probably opens the door to soverign wealth funding. Even if the project isn't directly funded by a soverign wealth fund, it could certainly be underwritten by one.

Edit: Meant to say risk is overpriced rather than underpriced resulting in underpriced SP.

Morocco as a growing emerging market...

https://www.moroccoworldnews.com/2019/02/266488/study-morocco-emerging-markets/

Ties in with energy transition.

New venture on Solar power or Rare Earth Metals for their growing automotive industry would tie in nicely with a Strategic Partner such as Chariot.

A few months ago I stated that I believed Chariot was going to create a large strategic gas business in Morocco and I started to reload up on Char. The share price was 3.5p.

There were a few naysayers at the time (some are still here) who told me that there was no way Anchois will become a gas business and Morocco would instead either import LNG from the US or something else (capex/Moroccan government) would prevent the project from developing.

Over the last 3 months, certain things have been put in place that really highlight how likely this project is going to go ahead and each time we get a small amount of movement in conviction – the price creeps up. The share price is now 8.5p (still pretty low).

Although Chariot is still very cheap, it will move up when there is greater realization by the market that the Anchois project is moving forward. When there is greater certainty, the price will be higher.

If you look at the size of the new acreage that the Moroccan government is about to award Chariot, it is clear to see (for anyone who cares to look) at what is happening here. The Moroccan government itself have become Chariots STRATEGIC PARTNER. You don't award a fortress of acreage (it really is huge) to one player unless you're very confident that that one player is going to execute on extracting your strategic reserves of gas or assist you with your energy transition away from Coal (which Morocco still heavily relies on).

On awarding this huge additional territory of acreage to Chariot, the project is now somewhat future-proofed against some of the (previous) risks (which of the other sands does the source rock feed with gas).

Together with its drill partner (whoever they turn out to be), Chariot can be secure in the development of the project, for once they put down the main manifold onto the seabed, they have time to extract discovered reserves, as well as the time and space to discover where the additional reserves extent too and tie them back to the main manifold. The Moroccan government have granted them the time & space and thus ability to do this.

The market still apportions risk to this project (no upside without risk). But at 8.5p, together with the awarding of Rissana, I think that risk is mispriced (underpriced).

One must also take into account Morocco's demographics. They have a very young population that is power hungry and Morocco as a country is being heavily tipped by hedge funds as a good growth play within their global emerging market portfolios.
Getting in on the ground floor will pay dividends for any company who enables these emerging markets to transition during their growth phases.

I've been topping up and nearly have my target quota of stock.

Things are really going to start moving in 2021 imo.

This is setting up nicely :)

Spread is not that large when you go to trade. Data stream from LSE is not showing correctly.

In 2006 I put £20k in an aim stock that quickly rose to £100k before then doubling to £200k (I cashed out having x10). Had I held on for another 3 years, my £20k would have turned into £1.5 million (ASOS).
Aim is not for widows and orphans, but it is where you are likely to find baggers. I own safe dividend stocks as well, they're just not worth discussing as they aren't exciting.
Once Chariot start laying pipe from Lixus (2024), the SP will have already bagged multiple times (based on newsflow) imo.
I don't suggest anyone put in more than they can afford to lose, but for me, I can afford to wait.

Yes, I’m sure most of us hold other stocks, just discussing entry points. I’m happy to buy on the rise, but also want to build a bigger position before the next RNS, because if it is one of the big ones (listed below) this could easily open 70-100% up on the day.
I watched this for most of the morning and for a couple of hours in the afternoon and I was unable to buy anything under 8p.
I’m happy to buy below or above 8p and that’s why I don’t really care if the price were to drop a bit more, as I’ll buy more. Naturally I’ll be happier to see it go up, but anywhere between 7-10p I see as a massive discount to NAV and a complete bargain! :)