Member Info for BouncyDeadCat

No doubt A3 was P&A as per the RNS. I accept that. However, the same RNS also stated the P&A had already been carried out (past tense).

"The Main Hole has now been plugged and abandoned, without flow testing, and the drillship is being demobilised."

This was the 16th September. It takes a drill ship no longer than 24hours to demobilize. Yet 7 days on and the Stena Forth is still on location in Anchois. The question is why? what are they still doing there?

https://www.vesselfinder.com/vessels/details/9428932

Strange this ship is still located in Anchois. Anyone got any ideas why?

Why continue to pay the crew to be out at sea doing nothing?

It has a growing asset, in a booming sector, within South Africa.

£20 million market cap seems incredibly cheap, even without Anchois. Not surprised to see some strong buys coming in.

https://www.proactiveinvestors.co.uk/companies/news/1043383/chariot-transitional-power-business-potentially-worth-10p-a-share-american-investment-bank-1043383.html

ENOG deciding to stay may depend on how many satellite targets surrounding Anchois (Anchois West for example) contain B sands.

It's the B sands that seem to have their seals intact. Even the thin sands encountered during the A3 drill had the presence of gas bearing reservoirs in them.

Fernan,

Chariot drilled A2 for under $20m all-in and they did a lot of logging and analysis on that well. Granted, rig rates are slightly higher now.

Putting in a very high rate of $500,000 per day for the drillship, that would be $12.5m. Double that would be $25m.

Budget is $85m.

Fernan,

They have a 45% interest, not 30.

Average day rates for the following drilling vessles for Spring/Summer 2024 are as follows:

Jackup - $118,000

Semisubmersible - $368,000

Drillship - $419,000

Stena Forth drillship was out for approximately 25 days (plus demobilization).

Total cost...?

$15m...?

The drill budget agreed for appraising the Lixus licence signed between Chariot and Energean is $85m.

Zahrab,

Who knows, it's just a thought. What we have at the moment is blind panic and trader scalping. However, if there's still a good bit of cash left in the driling budget, then they could go back in once the latest data has been interpreted. $85m is quite a decent budget, from memory, I think Chariot spent less than $20m drilling Anchois 2.

Maybe they go for a shallow (cheaper) development and concentrate on developing the shallower B sands where they know there is lots of gas contained within high porosity reservoirs.

I'm not sure this story is completely over as there are many targets still in the west of Anchois and Energean have only used a fraction of the $85m drilling budget.

The suggestion that Chariot has no budget left to return to Anchois with another drill may be premature and overblown as it's not their cash being spent. The drilling agreement was made with Energean, in exchange for 45% of Anchois and the drilling budget that was agreed on (in exchange for this stake) is/was $10m cash + $85m in carried drill costs. The drill was scheduled to take approximately two months and yet it took less than half this time. Is there enough remaining in the budget to drill another B sand in the west of Anchois once they have interpreted these current well results?

I guess we'll find out in due course...

$6m yearly cash burn was because of all the highly paid O&G engineers they had working for them on Anchois.

And return capital to shareholders may be the only fair thing for the BoDs to do now.

The renewables business + electricity trading licence is probably the asset worth the most.

Private equity currently very interested in purchasing renewable electricity companies.

Neoen is a big renewable power (solar & wind) business and it has a 20GW portfolio of renewable power under development, with only 8GW of it currently built. It's being bought out by Brookfield for (€6.1 Billion) $6.6 Billion. If we compare that to Chariot's portfolio, which is much smaller at 515MW or 0.515GW, it is 1/40th the size of Neoen. I'm not saying Chariot's renewable business will be valued at 1/40th the value of Neoen at $165m, just that it should have a decent amount of value ascribed to it. More than the current market cap of $20m.

https://neoen.com/en/news/2024/brookfield-enters-into-exclusive-negotiations-with-impala-and-other-shareholders-to-acquire-a-majority-stake-in-neoen-and-launch-a-mandatory-tender-offer-for-100-of-the-company/

I thought they were referencing Anchois? Which I think was 150m from memory, maybe someone could correct me if not.

Anchois is a magnitude deal wider than Dartois, so 200m thick gas bearing reservoirs over 5-10km2 are going to produce a lot more gas that 200m thick gas bearing reservoirs over a few hundred meters.

I'm not a fan of drip feeding drilling info like this as you never know what you have until you reach TD and have tested flows.

"Chariot said that the early analysis of the well confirms the presence of reservoirs over an interval of approximately 200 meters gross thickness"

From memory, I believe they had 150m of reservoirs pre-A3 drill. So if they now have 200m, that means they've found another 50m.

If this is the case, then I'm not sure why yesterday's RNS needed to be so drab. Another 50m of gas baring reservoir would be great news!

Legalwolf,

Suggest you look at the last 3 presentations and read the annual report. It's in there.

Jimmy,

Do you think if they hit gas in North flank they would go back into A1 or A2 and drill down to confirm South flank?

Jimmy,

Agree that it's the seal or lackthereof within the separate sands that seems to be the pot luck deciding factor of; gas/no gas.

Here's hoping North and South Flank seals are intact 🤞🤞🤞

A3 drill is yet to reach TD which is probably where the most interesting upside could be found.

The upside potential of hitting gas in the North Flank would be an extra 213Bcf which in turn would significantly derisk the South Flank (372Bcf). A total addition of 585Bcf would take the Anchois gas resource past 1.2Tcf.

So what are the chances of hitting gas in the North Flank? At a guess, I'd say no more than 50%.

My reasoning is; Although the O sands drilled in A2 were gas baring, the reservoir was thin and thus doesn't contain much gas (10Bcf). Seismics suggest these sands are much thicker in the North and South flanks so potentially could hold a lot more gas.

The seal within the footwall of the pilot hole was not there, so no gas, however, the North and South Flank are located behind this fault and beneath reservoirs that are already known to be gas baring, so there's still a chance these sands could hold more gas.

Jimmy,

I'd be interested in knowing what you think the CoS is now for hitting gas in the North Flank?

The longer the Moroccan government take to negociate gas prices, the longer they have to pay the current rate of $12.40 per mcf from Spain for converted LNG. They also wouldn't have already signed the contract for the Anchois project to use the Maghreb pipleine if they didn't intend to buy what is going to be produced. The quicker Anchois reaches FID, the quicker Morocco starts benefitting from this resource.

In all of the panic, I think what's largely being forgotten right now, is the value of Anchois as it currently stands (without finding any more gas).

637Bcf.

Providing that flow testing doesn't encounter any serious problems Re: extraction, that's enough to produce from.

Even 2 wells producing 105 mmcfd per day (the original plan) would provide decent revenues for both ENOG and CHAR.

But of course the juice needs to be worth the squeeze (That's what the CEO of Energean is really getting at). I think the current wholesale price of Moroccan gas @ $12.40 per mcf is a bit rich as a long term price and the Moroccan government would probably prefer something closer to $8.50 per mcf. Common sense suggests that the price will be negotiated & then fixed somewhere between the two.

But let's take the low price of $8.50 as the long term wholesale price and let's assume only 80% of the 637Bcf of gas is extractable. That totals $4.34 Billion in revenue. 30% of that goes to Chariot = $1.3 Billion. $500m in CapEx for the smaller infrastructure build-out. Under the term of the partnership, Chariot's 30% of CapEx is payable via 50% of future revenues. $1.3 Billion - $150m plus interest = $1.15 Billion gross to Chariot.

If ENOG were to elect to purchase the extra 10% from Chariot then it would be $868m - $100m plus interest +$65m up front cash = $833m gross to Chariot.

Of course, if they find gas in the C & M sands and the North and South flanks then these numbers explode to the upside.

There are some people on here trying to convince you, or rather, trying to scare you, that Chariot's 30% share of this gas is only worth $25m.

I think the statement from Rigas is the problem for investors closely following events. However, a headline with duster in the title is going to be a problem for anyone and everyone else.

It's not a good headline, especially when the main drill is still ongoing and they haven't reached North flank yet.