Comments on the transaction20 Feb 2026 10:00
Etu Energias (a local angolan Company) is acquiring:
A 20% interest in block 14 in Angola. Current gross production: c. 40 kbopd
A 10% interest in block. 14k in Angola-Congo. Current gross production: c. 1 kbopd
Net production acquired by Etu energias: c. 8.000 bopd
They are paying US$ 195 million for the acquisition, equivalent to US$ 24.375 per flowing barrel
Could this benchmark be directly applied to the 4.000 bopd barrels bought by CHAR? Not, because there is a loan to be repaid first.
*Repayment of Shell loan
Shell will provide a US$ 170 million debt facility to fund the acquisition.
The loan will be repaid from the cash flows produced by the 8.000 bopd acquired by Etu Energias.
At an after tax free cash flow (net of CAPEX) of say around US$ 20/b, the principal (not including interest) will be repaid in around 3 years:
8.000 bopd X 365 days X US$ 20/b: US$ 175 million.
I suspect that, given the low price paid by Etu Energias, the after tax free cash flow (net of CAPEX) won´t be much higher than US$ 20/b (US$ 7.300 on an annualized basis)
*CHAR´s equity interest in the blocks acquired
“Chariot will be exposed to “the economics associated with material production from the working interest to be acquired equivalent to up to 4,000 bopd”
What does it exactly mean?
I understand that, up to a gross production of 40.000 bopd, CHAR´s indirect equity interest in the field will be of 10%. Should gross production goes up, its economic interest will be proportionately reduced, up to 4.000 bopd.
For example, in case of a gross production of 50.000 bopd, CHAR´s equity interest will be of 8%
*CHAR´s financial runway.
The placing has provided CHAR with a working capital of US$ 8 million (US$ 4 million from the shares subscription, and US$ 4 million from the open offer).
In CHAR´s words: “As at 31 December 2025, the unaudited cash balance of the Company was US$1.2 million. Combined with the funds raised and the potential monetisation of the renewables business the Company forecasts sufficient working capital to reach first cashflows from the Transaction.”
It seems that, after this placing, no more dilution will take place for the foreseeable future. But, with CHAR, it´s impossible to know that for sure.
*Effect of the warrants on the share price
As part of the subscription, there will be 1.3b warrants waiting in the sidelines, ready to be executed as soon as the share price goes higher than the 2.4p strike price. The share price will run against a wall at around 3p.
*Summary:
As the saying goes “what is good for the company, not necessarily is good for its shareholders”. This applies to this transaction. Yes, CHAR will survive. Yes, CHAR, has secured a future cash flow. But we shareholders have paid the price.
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