Member Info for Jimmy23

Newkotb
Usually the requirement is to fund the exploration phase.I am not sure about Morocco as to whether the field development is funded by Morocco for their 25 % or if chariot funds it from 100% of production revenues. Because capex payback will be at 1.5 to 2 years it does not really matter as it would be financed by the bank project financing and chariot has letters of intent from two banks in connection there with. I suspect there will be a queue of bankers for that deal.
J

The key geological data describing the potential of the lixus area licence and the application of new technologies has been posted by others and the reference is at.
https://www.geoexpro.com/articles/2020/06/understanding-the-true-hydrocarbon-potential-of-the-lixus-offshore-licensing-area-morocco

The key take away from that published report is that the use of seismic spectral decomposition coin conjunction with the logged data from drilled wells can identify reservoirs and whether such reservoirs are gas bearing or water wet.
For the anchois discovery this can viewed in the chariot October presentation on page 23.
On reading the geo expro article it was good to get a detailed summary of the area geology.
It certainly has huge potential.
The low hanging fruit is to get anchois north and the O footwall drilled from a single location and add a further 450bcf of reserves, consider a small farm out to do this. Prioritise getting to production cashflow ASAP, possibly drilling these targets when a rig moves in to complete development hook up of anchois 1 and 2 .
Peel hunt attributed just 0.04 pence per share to the additional satellite prospects, take advantage of it.
Jimmy

SHC
I allowed for ONMYS share of Revenue and state royalties, did not reduce f,or their share of opex as was being conservative . It would add another £9 million in pre tax revenues per year.
On a pe multiple of 10 would add £ 90 million to the market cap of chariot,
O dear that less than the current market capitalisation
Jimmy

xL
I think we will get news this week on the anchois 1 well .
Chariot appears to have spent about 8 days logging and sampling the anchois 2 well, this included vertical seismic profiling which will allow integration of well results proven gas zones into the 3D seismic to further calibrate the 3D seismic direct hydrocarbon indicators for both anchois satellite prospects .
The most obvious prospect is the anchois north adjoining prospect with 308bcf reserves, this is likely to be upgraded and validated, possibly with more reserves as the anchois 2 b sand found an additional reservoir zone , so we will hopefully get news on this also.
Page 8 of the September 2019 is useful to illustrate the production profile of a 730 bcf field development with a daily production rate of 90,000 mcf per day, at $8 mcf that will generate $6.8 billion over 26 years gross that’s worth $4.9 billion revenue net to chariots 75% interest.
I estimate chariot currently has approximately 700bcf of proven gross gas with the very high probability of adding anchois north’s 308 bcf.
I previously calculated that annual opex would be circa $50 million gross and capex would be circa $300 million to initially develop. That would indicate annual net profits before tax to chariot from the field at around £90 million per year , of which the first ten years are tax free.
Chariot is not even valued at one years profit yet.
Then add in anchois north.
This is truly transformational which is why I added to my investment this week.
Page 18 of the September 2019 presentation shows the seismic profile of anchois from the southwest through the the anchois 1 And 2 locations to anchois north. Note the thickening a and b sand reservoirs, which are included in the 308 bcf prospective reserves which had a previous chance of success at 43% .
Now look at the anchois deep which has been validated by the anchois 2 well result and note how it continues into anchois north.
Major upgrade on this low risk area is due.
Jimmy

First commercial gas offshore Morocco will be of huge importance to Morocco . Government officials don’t ever disclose more than in the company press release as they are jv partners subject to confidentiality clauses.
This commentary is what I would have expected including plans for for production in 2024 now validated by govt official
Good news.
J

Speed f , I don’t understand your view. The anchois well has confirmed 100 meters of net gas pay in high quality reservoirs, double that previous established and no water found in the current well and the seismic profiles of the gas have been validated.
Chariot report that the previous reserve estimate for the meters found in the anchois 1 well would generate a net $1.5 billion , and estimate that should now be doubled.
What is that you don’t understand about the company you invested in , or are you just trying to rack the share price down in order to load up.
I added significantly this week as I can see the potential and consider the peel hunt valuations to be well below the assets true worth.
Load up, I did.
Jimmy

The December 2018 presentation reported that chariot had a 10% back in right post drilling in respect of its acreage in southern Namibia.
This acreage will now be upgraded by these well results from shell.
Jimm

Interesting article on the geology of the shell prospect.
In reality the prospectively area goes from the orange basin to the luderitz basin offshore walvis bay.
In particular the prospect area is likely to be in the west of the basin.
Chariot also seem to have a 10% back in right to an 8tcf prospect north of the kudu field.
See.
https://www.geoexpro.com/articles/2021/11/south-africa-poised-for-exploration-greatness

Jimmy

An interesting article on the current Namibian wells at.
https://www.geoexpro.com/articles/2021/11/south-africa-poised-for-exploration-greatness

I think this could reawaken interest in Namibia.

Jimmy

Hi Sc
I would need to do some spreadsheet work to model the scenarios you mentioned and unfortunately I have a day job to do so perhaps later.
But roughly calculating , we have $3 billion of undiscounted free cashflow from the current reserves so a farm out for 10% should be worth $150 million, I know that’s more than chariots market cap, but it’s very doable, particularly if it’s then used to drill anchois north and o sand footwall.
I would typically hate to see a farmout but if it adds reserves and provides market validation of the anchois value, then it should be looked at.
For reference Peel hunt valued the current reserves at £1 per share or $1b before applying a 50 % risk factor for financing, even though chariot have letter of intent to finance from two banks.
Jimmy

Hi professional
I agree that there is potentially a lot more gas to add. There is enough proven gas now to move into a development which is debt financed.
The very exciting thing about this result is that it has validated the direct hydrocarbon indicators in the 3D seismic and hence the probability of the footwall O sand being gas filled and the anchois north prospect being gas filled.
These will add circa 435 bcf to to current proven reserves.
The priority is to get to cashflow ASAP. Design the facilities and pipeline to cater for higher volumes of at least 1tcf to be produced in 10 to 12 years, hence tax free and higher value. When rig is being mobilizer to come back and convert and hook up anchois 1 and 2 for production, drill and complete anchois north and O sand reservoirs.
The chariot previous estimate of net free cash flow of $1.5 billion , undiscounted , from the a and b sands can be approximately doubled based on what has been found to date.
Page 24 of the December presentation for reference of 1.5b
This share price has a long way to go.
Jimmy

35 million shares traded to day, the overhang is diminishing fast.
J

29 million shares traded to day so far according to the London stock exchange site, the overhang is reducing fast
Jimmy

I appreciate that brokers like to hold back valuations particularly if they are very far away from the current price.
So, investors should note the peel hunt valuation of £0.54 per share comprises of 0.50 for the anchois field, after they apply a 50% commercial risk discount, so if you believe that chariot can secure debt finance and an offtake contract the current price should be double at £1.00 .
Applying £0.04 per share for the anchois satellite after the 50 meters confirmed in the B sand is shockingly low.
These valuations are definitely being pulled back.
Jimmy

Chariot previously reported they had the rights to back into the southern acreage for 10% after a well was drilled. I don’t know if they still retain that right.
Even if they don’t, the shell result could indicate that’s it’s in deeper water sub basins where the oil is to be found, away from geological volcan activity which killed off the source rock.
Need more detail but potentially significant for farming out
Jimmy

See latest drilling news oil
https://www.upstreamonline.com/exclusive/breaking-updated-shell-hits-oil-in-closely-watched-namibian-wildcat-market-sources/2-1-1142213

Hi Larry, the information is in the July 2020 presentation, b sands net reservoir in gas 35 meters with another 25 meters below the Gwc.
It would be good to know the thickness of the O sand reservoir because with no water it looks like the prospect size is circa 18 km sq. I think we are looking at higher end of reserve expectations, certainly enough to fast track development to first cashflow.
J

Hi Larry.
I take your point that the A sand were expected to pinch out and indeed the seismic indicated that’s perhaps I was too cautious reducing the a sand reserve. I had believed the B sand was previously reported at 25 meters and there is a reference to it a previous presentation, just can’t find it now. Obviously the anchois 1 discovery found the gas water contact for the b sand and indeed that water wet reservoir is now gas filled. But chariot report a new sand in the b reservoir and this appears to be new. More detail required from chariot.
I am excited by the O sand result with no water , so the footwall O sand must be looking a near certainty as it’s updip.
Iif the O sand has no water the 2c estimates for the anchois 2 were approx 900 bcf and then add in the O sand footwall. With little extra capex this can result in very much higher daily production and hence a much higher npv
It would be really interesting to know if the pressure readings in the O sand confirmed the previous seismic estimate of the gas water contact.
Anchois north with another 300bcf must be looking very good now also.
Jimmy

Just doing some more detailed review of the results. The A sand was encountered but was not a primary target of the well, so let’s just use the proven 1c amount of 65 bcf, however the b sand came in at 50 meters compared to 25 meters in the discovery well, so let’s double the 2c reserve from 247 to 494bcf. Assuming the other reservoirs came in on prognosis then total revised reserves could rise to 1.1tcf . Obviously back of the envelope calculation but I think this the ballpark. The O sand footwall prospect is now also very high chance of success as it lies above the O sand in the anchois 2 well and is confirmed by the seismic hydrocarbon signature.
This is now very valuable.

Not only is this a great success with over 100 meters of high quality gas filled reservoirs, but this has validated the Avo signature in an exploration target being the O sands, this has substantially derisked the exploration targets in the rest of the lixus licence. We will definitely need a bigger pipeline than 10 inches, particularly as first ten years production is tax free.
At 120 k mcf per day this will generate $960 k per day gross revenue, or $694k net to chariot, capex payback in one year generating $200 million per year for chariot.
You might think such large numbers are wild, but see page 24 of the chariot corporate presentation where they reported A and B sand net cashflow to chariot of $1.5 billion.
We now have double the reservoirs at least of the A and B sands.
This is due a major re rate and there will be many revised broker estimates to upgrade price targets. Production cashflow is two years away with capex fully funded!
Jimmy