Member Info for Fernan10

All in all, it seems we are no more a gas development company. After the failure in Anchois, and the doubts about the testing on Loukos, we have come back to our previous status as an exploration (and hence higher risk) company. With the additional pressure of having a US$ 15 million overhead cost per year.

I'm not selling at these ultralow level, but not buying a single share either

Petrobras is reportedly looking for new exploration opportunities in Namibia. They were our partners in blocks 2.714A and 2.714B back in 2012. Maybe we will partner with them on these blocks again.

Surety:

The industrial users that are currently paying US$ 17/mcf to buy the gas from SDX energy will likely be interested in funding Anchois, even at a lower scale than initially thought.

Time for CHAR's managers to look for alternative funding options and justify their ridiculously high salaries.

No news about Namibia or Loukos, no read-across funding on green energy, big uncertainty in Anchois....

A disgracefull year for Char, and a shame for management, whose credibility is destroyed.

What AP is going to tell the market to justify yet another share placing in 2025? An "exciting new venture" exactly where?

Adonis was planning to use the green hydrogen to produce green ammonia, and send the product to Europe. CHAR has already an MOU with the port of Rotterdam to receive the product.

That´s exactly the context the article is all about.

Https://oilprice.com/Alternative-Energy/Fuel-Cells/Green-Hydrogen-Costs-Set-to-Stay-Too-High-For-Too-Long.html

"Rising costs for electrolyzers mean that in 2050, green hydrogen would cost between $1.60 and $5.09 per kilogram, down from a current cost range of $3.74 to $11.70 per kilogram."

50 kg of hydrogen have approximately the same energy content as a barrel oil oil.

Them "a current cost range of US$ 3.74 to US$ 11.70 per kilogram" is equivalent to an oil price in the range of US$ 187 to US$ 585 per barrel.

Adonis´dream to become a "green energy hero" is financially disastrous for CHAR.

I saw a lot of discussion here about the chance of CHAR loosing the Lixus licence because of the company´s inability to fulfill their license obligations in time.

I don´t this is going to happen.

The moroccan government have been so far very acomodating in relation to that issue.

Take the case of Sound Energy, for example. They haven´t accomplished their obligation to drill an exploration well in the Anoual license in Eastern Morocco, for years.

The government has been extending the terms of the license until Sound finally got a farm in partner willing to fund the drilling.

In the case of their Sidi Moktar license, they haven´t so far executed their contractual obligation to shoot some seismic there. I think they are more than 5 years late in doing that work. No matter that, the moroccan government keeps extending the term of the license to them.

It´s clear to me that the government is doing all they can to make all the these new gas projects go ahead.

Regards

BDC: I know you are (or were) a long term holder here. I´m not dismissing your comments.

I still think that Anchois is our best chance of recouping some value here, for the following reasons:

1. Natural gas prices in Morocco are almost six times those of the US. SDX was selling their gas in the first half of the year at US$ 17/mcf

2. There is a 10 year tax holiday still in place

3. I agree with Thebold that we still have the chance to drill the so called "Anchoi satellites", and to tie them into a unitized production hub.

4 We should have a remaining US$ 50 million carry from Energean to try and explore those satellites.

5. The carry from Energean covers all the Lixus license, as you can see from the wording of CHAR´s presentation regarding the farm out:

"Chariot will receive:

US$85 million gross carry including:

All Lixus costs up to FID, including the additional Anchois well with a gas flow test"

Sound Energy flow tested the wells before farming the play out. By memmory, one of their wells flowed at 17 mmcfd.

Surety:

Here you have an example of a farm out agreement for a gas play onshore Morocco, announced today by Sound Energy:

https://www.lse.co.uk/rns/SOU/moroccan-assets-completion-of-the-sale-of-seme-ywdiovexw25dsyk.html

The issue you asked about (upfront cash consideration), in this farm out agreement happened through the reimbursement of past costs incurred by Sound Energy, for a total of US$ 13 million

SDX (a public company that is ALREADY PRODUCING GAS in Morocco) had a G&A expense of US$ 2 million in the first half of this year. During the same period, we spent US$ 8.1 million (including US$ 2 million in share based payments).

I´m not sure this company is being managed for the benefit of shareholders, but for other purposes.

The solar and wind projects that are going to be funded out of the recently announced guarantee are yet to be built. Until then, the green energy "pillar" will keep having cash flow deficits for the next few years.

I still think Loukos is our best chance to get some revenues in the short term. But CHAR´s management have delayed the flow test of the Loukos discovery supposedly "to preserve capital" (i.e., to keep paying their salaries)

Hi Surfit.

You are trying to find some source of income for CHAR...

From memmory, CHAR has a 10% interest in a 15 MW green energy project currently operating in Burkina Faso.....I can´t remember our management ever informing the economics of the project, and the net annual income to CHAR

In both cases, they made a discovery and opened a farm out process before testing the well.

What are the reasons for doing that?

Wouldn´t it be better to perform the flow testing before asking others to invest in the play?? Not having the results of a flow test increase the perceived risk for potential partners.

Comments??

Ok Jimmy thanks.

Reducing 10% (or even a lower percentage) of overhead expenses will allow for the testing, even if there are multiple reservoirs to test.

Not sure our idiotic managers are willing to do that.

Regards

In 2023, CHAR raised US$ 12 million for the driling (and testing, I suppose) of 4 onshore wells in the Loukos area.

They drilled only 2 wells, have one discovery, and then postponed the testing of this discovery "to preserve capital".

This year, they raised US$ 2 million supposedly to get one exploration license offshore Namibia, and nothing happened (until now).

What would be the reason for the next placing? will there be anyone there going to believe them?

I suspect future share placings will be done at a substantial discount to prevailing market prices, in order to entice the subscribers to have a quick return (for example, a placing at 1.5p, carrying a 25% discount to current prices). That will be very harmful for current shareholders.

Hi Jimmy.

CHAR´s management said they postponed the testing of the well "to preserve capital".

Fow how long is it necessary to test the Loukos discovery, in order to get a reliable production number?

And how much doest it cost?

For example, on Set 27, 2024 SDX announced the completion of drilling operations for their KSIRI-1 well onshore Morocco, together with the start of the testing of the well. One month later (on Oct 31, 2023) they informed the results of the testing (a flow rate of aproximately 4 mmcfd during the test period).

That flow rate, at the current moroccan market price of c. US$ 17/mcf would do wonders for the cash flow.

is it that difficult for CHAR to do something like that?

Maybe HC is up to something. It seems our management is absolutely incapable of completing anything they attemp to do.

They would have cut their fat salaries in order to save money for the testing of Loukos. That was (and still is) our best chance to get to short term cash flow and stop the cash hemorraging.

I suspect what Julian was really thinking was something like: "The idiot of Duncan Wallace was not able to rightly choose even the location of an appraisal well. I´m not goint to risk any cent of my precious little savings to back up his geological thesis anymore".

"actions speak louder than words", as the saying goes.

Surety:

the guarantee announced this week has nothing to do with CHAR´s solvency.

CHAR could even go bankrupt, and that won´t have any effect in ETANA´s operations (Etana is just a CHAR´s subsidiary, that can keep operating independently of CHAR´s financial condition)

The guarantee will allow Etana to secure the payment of electricity purchases from independent power producers, allowing those producers to fund their future renewable energy projects.

Regards