Auctus advisers- research note21 Jun 2023 09:26
Cash at the end of December was in line with our expectations (~US$12 mm). • The highlight of the announcement is about Chariot having received multiple offers to acquire a stake in the Anchois project in Morocco from multiple companies including significantly larger E&Ps. • We understand that some of these potential partners could fund the development of the project from their balance sheets. • These offers would leave Chariot with a material stake in the project and would include an important upfront cash consideration (on top of a carry). Chariot has already spent ~US$50 mm in the project and expects to recover a significant amount. The combination of the carry and the upfront payment reduce materially the risk of any significant dilution for Chariot shareholders. • The key criteria for selecting a preferred partner include (in order of importance) (1) the capability of the partner to fund and deliver the project rapidly, (2) the stake in Anchois that Chariot would keep and (3) the amount of the upfront cash payment. • The preferred partner is expected to be announced soon. We anticipate that this would be a re-rating event. • We re-iterate our target price of £0.55 per share.