Member Info for Jimmy23

DST are not performed now days as they have been replaced by sidewall cores to get permeability data, pressure reading and gas sampling, all of which can be used to calculate a flow rate pretty accurately.
Great discovery, derisked sattelite prospects hugely
Jimmy

100 meters of reservoir to generate $3 billion of free cashflow to chariot , based on or rata adjustment fro December presentation. capex funded by two banks.
Load up.
Jimmy

I just added at 11p
The chariot December presentation reported that the free cashflow from 55 meters of the a and b sands will be $1.5 billion, we now have 100 meters of reservoir gas so roughly speaking that’s worth neaundiscounted.
There will be little extra capex and first ten years of production are tax free.
Amazing value now
Jimmy

Hi JR
You are correct the presentation does report that free cashflow from the proven A and B sands are indeed reported at $1.5b
And then there is the upside from deeper zones some of which will certainly come in.
The current drilling plan would indicate that the anchois 2 well will produce from the B sand and anchois 1 from the A sand.
Hard to believe this can be purchased at £60 million market capitalisation. Due for a serious re rating.
Jimmy

Hi JR
Your assessment is correct. . If A and B confirmed then it’s commercial and chariot have letter of intent to finance the capex from two financial institutions with payback within two years of first production.
The two wells being drilled will be used as future producers thereby increasing time to first cashflow in 2024.
The reported 10% npv of the project was $500 million for A and B sands. I expect the free cashflow from that to be around $1b , I will check your reference to $1.5 b
All additional deeper targets are a bonus, requiring little additional capex to develop.
In addition, a positive result from this well will substantially de risk the anchois satellite prospects which would require relatively little capex to develop.
Jimmy

Snott
Good analysis. I would add that there was probably a few days taken to log and take samples from A and B sands before casing was set . I would say we will reach TD in next three or four days, then logging, so news by end of next week, all going well.
J

An investor in chariot is primarily investing in the anchois field appraisal and development as it’s such low risk and has a fast route to production cashflow without the need for further equity dilution.
The hydrogen project I think is going to be huge particularly because the combination of very high average winds offshore Mauritania and high solar radiation onshore combine to produce a very low cost of power and importantly provides a capacity utilisation factor for electrolysis of 70% that will yield a low cost of hydrogen . This is a huge project that will cost circa $10 billion in capex and can be substantially debt financed if there is a large partner who signs up an offtake contract. Chariot December presentation reports there will be a partnering announcement sometime between the commencement of acnchois 2 and the re entry of anchois 1 , so within the next three weeks.
While I really like the hydrogen project the near term potential of anchois is 45p to £1.00 plus the derisking of the anchois satellites.
It’s an amazing investment opportunity at only 7p

As we wait on the anchois well results, investors may care to be reminded that the previous estimate of potential production was set out in the 2019 investor presentation at 90,000 mcf per day for the a, b and c sands which at the recently secured gas price of $8 per mcf, generates revenue of $3.1 billion gross for the field in first 12 years.
See.
https://www.chariotenergygroup.com/wp-content/uploads/2021/09/Chariot-presentation-Africa-EP-Summit-May2019.pdf
Page 8

Jimmy

My guess is that we can expect an rns announcement on completion of anchois 1 in around two weeks time.
We have probably drilled the A and B sands by now, so watch the chariot trading volumes.

Jimmy

On page 12 of the latest corporate presentation in very small print at the bottom of the page is a reference to a news article on hydrogen economics.
It can be found here

https://www.rechargenews.com/energy-transition/giga-scale-green-hydrogen-developers-are-being-unrealistic-about-levelised-costs/2-1-1046646

Now what’s interesting is that the planned cost of another green hydrogen project in Mauritania is $2.22 per kg. The article states that the current cost in Mauritania is $3.20 per kg. The difference being the expected fall in the cost of electrolysers

The key to lower hydrogen costs is a higher capacity utilisation when both wind and solar power are combined to generate hydrogen along with cheap renewable electricity.

The offshore acreage secured by chariot has average wind speeds in excess of 10 meters per second which will make for very low costs, despite the higher cost of maintaining offshore wind. In addition chariots onshore acreage has a particularly high solar intensity, likely to be similar to Saudi Arabia.
Chariot announced that it’s target market was mobile mining equipment that has a breakeven hydrogen cost of $4 per kg based on a hydrogen council report.
Chariot report they plan to produce 600,000 mt of hydrogen from this project. It could easily make$1.50 per kg on selling to the mining market in Africa.
That’s $900 million per year.

Importantly the report confirms Mauritania has=the best economics in the world and I think chariots acreage is the best in Mauritania

No wonder Ap put his own money into chariot.
Jimmy

Once we know that the reservoir quality of each zone is good and gas bearing we can work out the likely new reserves and assign an estimated value. The certification process is required to unlock the project finance for development. The key message to look out for is that the well has been suspended for use as a future production well.
J

If we increase the. Average gas price by $2 an mcf it’s worth appr £0.70 per share undiscounted or circa 35p extra in npv terms, per share
Nice upside

I understand we will be getting an update at the end of each well
J

Thanks Larry, the 2019 presentation shows three separate gas water contacts between A, B and c&m which surely indicates, three separate seals, three separate pressure zones . The distance between the reservoir tops and the Gwc look about 190 meters , so the question, is there a change in the O sand top seal from that seen above the three other reservoir zones .
Obviously got to drill to find out but wouldn’t it be bizarre if seismic direct hydrocarbon indicators also did not work in the O. Sand .
J

Thank you for your insight Larry.
With a proven gas source rock, a four way dip anticline and a strong Avo seismic anomaly in the O sand what are your views of the O sand . I appreciate its exploration, but what could go wrong .
J

Anglo American to convert mining fleet to hydrogen.
See.
https://www.bbc.com/news/business-59576867

Cost of green hydrogen falling rapidly , will be cheaper than diesel shortly.see
https://www.rechargenews.com/energy-transition/-we-will-reduce-the-cost-of-green-hydrogen-to-1-kg-by-2025-says-electrolyser-maker-chairman/2-1-1133034

I think the green hydrogen project is going to be huge, and investors get it for nil value in chariot.
Jimmy

Bbb
Please read the corporate presentation, the price of gas in Morocco is based on the oil price energy equivalent of a gas unit, it’s calculated at $8. Mcf .

The USA price of gas has nothing to do with the price in Morocco . Gas prices are different all around the world

Chariot has never had revenue.
The anchois development is already the subject of a financing letter of intent and an offtake contract . This will move to development and cashflow very fast.
My previous calculations were
£0.45 for A and B sand proven gas
£1.00 for all zones being gas
£1.45 for all zones and the derisked. Prospects in the anchois block as a result of drilling.
In addition, rough estimate of hydrogen project post announcement calculated at about £0.35 as follow on potential.
With proven gas and a gas field development the ii will invest in volume to drive the price forward.
Jimmy

The anchois development loan would be repaid from production casgflow within two years, it will be a strong cashflow generator.
The current two well programme will provide two production wells so this will get into cashflow quickly
J

Europe is desperate for gas, and there is a pipeline from Morocco to Spain with spare capacity as Algeria cut production. Success at anchois will derisk the 3tcf of targets in the remainder of the block. The big boys will want some of the action and with the first ten years of production tax free this will be a real focus area.
J