Member Info for Jimmy23

Hi Sefton,

Yes Ap put his own money on the line and saved chariot.

The acquisition of the moroccon lixus licence that contains anchois 1 was initially acquired under ceo Larry bottomless, who was subsequently replaced by Ap . The big difference between Namibia and Morocco is the new geo team.

Yes, chariot were an early mover in Namibia, but the big oil was in deeper water, but the concept was correct that Namibia had oil source rocks offshore.

The difference in strategy now, is that there is a strong awareness that it’s urgent to get to cashflow and stop diluting shareholders , particularly as the exploration farm out market effectively died.

In addition, the geo team have unlocked the seismic signatures of gas in morroco in the Miocene gas reservoirs, hence their emphasis on the 80 to 85% success rate.

Jimmy

857 meter thick Jurassic carbonate does not tie in with the 224 meters of Jurassic carbonate previously identified on seismic by predator.

The mou 4 well location is shallower than taf 1x well because it was uplifted by faulting not because it formed a continuous reservoir of 857 meters.

Let’s remember only 2 meters of the Jurassic were reported as gas bearing at the bottom of the reservoir, so it’s all about what is above mou 4 not what is below it.

Still exciting though.

Jimmy

Hi fernan,

The licence was due for renewal and SDX did not have the funds to commit to another drilling programme covering a number of licences in Morocco.

They did find gas, which flowed at relatively small rates.

The key is to find thick reservoirs and that’s where chariots database offshore can be used to calibrate the onshore seismic and log analysis as well as applying the offshore geological model for thick turbidite deposits to onshore.

Jimmy

Yes, I remember mud, just about.

Anyhow, reading the SDX competent persons report identified two issues for onshore Morocco in the rharb basin.

1. Local rock conditions can adversely interact with drilling mud to prevent logging and drilling. This has happened in the lnb 1 well in chariots new acreage and in the predator well mou 2. Predator indicated it was due to traces of natural potassium in certain clays that adversely interacted with drilling mud to form thick low viscosity mud . I believe Duncan has an eye for detail and will sample the lnb1 well cuttings to identify the issue and select the correct mud.

2. The SDX competent persons report noted that formation water samples were not available to calibrate the resistivity logs which identify hydrocarbons, so an assumption was used. Now chariot collected a huge data set offshore including 12 reservoir samples and sidewall cores, so it can recalibrate the onshore logs. In addition, chariot used seismic spectral decomposition very successfully offshore which can now be used onshore, hence the confidence of a 80 to 85% success rate.

As previously posted, the lnb 1 well encountered 300 meters of gross reservoir with seismic amplitude anomalies and flat spot above the drilled well, that group of clustered prospects were reported to have 26 bcf of reserves, however I believe that was based in 10 meters of reservoir, so if 300 gross meters have a net to gross of 60% , expect 180 net meters, which incidentally is close to the 150 meters encountered in an anchois 2. Now look at the seismic profiles in the chariot presentation showing anchois and guefrette side by side, very similar seismic profiles. We know that the average flow rate onshore rharb basin is 1.1 mmcf per day per meter, so for net reservoirs of 150 to 180 meters gives a daily flow rate of 165 to 198 mmcf per day, at a gas price of $10 to $12 mcf, very nice indeed.

The good old boys in Texas would call that a Barn Burner.

Jimmy

My post is a strong positive, sorry for poor English.

I am highlighting an issue whereby logs may show a low gas saturation, typically not economic, but which are in fact gas zone that flow gas,.

I am excited by chariots onshore acreage.

Chariots new onshore Morocco licence contains the lnb 1 well which is reported to have encountered a lower gas reservoir of 300 meters gross sand interval. The logging tool got stuck and the interval was not logged accordingly. Same happened to predator in its mou 2 well.

Chariot have identified the area up dip of lnb 1 well as a primary target for its forthcoming drilling program.

An independent experts report for SDX, page 126 to 131 at

https://www.sdxenergygroup.com/wp-content/uploads/2020/01/SDX-Energy-YE-2018-Reserves-and-Resources-Report_Client-Release_22-March-2019.pdf

Reports that this zone has an 80% chance of success,

We do not know the net to gross ratio of the 300 meters of unlogged reservoir, but offshore at anchois in similar geology its 60%, in which case there is a very good chance of some substantial upside . Particularly, since chariot have used advanced seismic analysis offshore so successfully.

Looking forward to the drilling, hope they use the right mud system to avoid drilling and logging problems.

Jimmy

The predator prospectus in august reported a desk top study that confirmed that onshore gas in the rharb basin with poor log results and 35% gas saturation can flow gas.

This may could also apply to chariots onshore acreage.

Jimmy

Mou 3 encountered 50.5 meters of sand in the mou fan, yet only a 43 meter gross interval is being tested, is the 43 meters all sand or a gross interval.?

If a net sand interval then a flow rate of 47 mmcf per day could be expected based on average flow rates per meter in the similar rharb basin nearby.

The is almost enough to meet the high end volume cng market in morroco.

If the agreement to sell gas at the well head is reached there will be very little capex,just revenue with very little opex.

No sure the market has grasped this.

Jimmy

Never mind,

Just to clarify, my calculations did not include mou 4 carbonate results, which could be substantial.

Jimmy

Never mind,

Good points, however with a relatively wide seismic line spacing, we cannot assume that the mou fan is laterally continuous at 43 meters. The last cpr is very much more cautious than the previous cpr, particularly regarding whether the turbidite sands are in fact channel sands instead of fan sands.

Jimmy

Hi wacky thanks for posting the analysis of the mou fan gas in place of 1.1 tcf.

I have two observations,

1. The gas in place is calculated based on 43 meters of reservoir encountered in the mou fan in mou 3, however, this is applied to a structural area of 30km2 which includes mou 1 where the mou fan reservoir is only 10 meters. So it’s unlikely 43 meters of reservoir is common through out the reservoir, particularly bearing in mind that this area includes a stratigraphic pinch out of the reservoir. If there was 3D seismic it could be calculated very precisely, otherwise I would reduce the 43 meters to an average of 26.5 meters based on known drilled reservoir intersections.

2. As you pointed out the calculation is for gas in place, whereas economic value is recoverable gas , usual to apply a 60% recovery factor at this early stage of appraisal.

This would adjust the calculation to a recoverable reserve of 400bcf, still very commercial for the mou fan reservoir.

In addition, we have the mou a sand reservoir , which appears to be prevalent at 11.5 meters in mou 3 and a similar 12 meters in mou 1, which predator report as being seismically correlated over an area of 58km. I have not done the calculation, but estimate it to be circa 350 bcf recoverable.

Then there are the other reservoirs, to be included, particularly the shallow gas reservoir in mou 3.

Still very valuable as soon as pg can flow test and confirm it’s gas and not possibly gas.

Jimmy

2.

Cattleman,

For many offshore wells, testing is not performed because the wells are extensively sampled and measured, gas and pressure readings taken from reservoirs along with side wall cores, provide information to calcualate a flow test that is usually acceptable for farm out and banking project finance, supported by an independent report.

There is no indication that I have seen that predator did any of this, so hence flow testing is nvery important.

Jimmy

Hi Brv,

Thanks for your analysis of the current prd situation.

I agree that Pg has a focus on drilling, I believe that the engineering and reservoir performance are not areas that Pg gets excited about, as I believe he is very much an explorationist.

The analysis you presented further confirms that to me ,as indeed the Jurassic target is indeed very exciting and a major breakthrough.

However, I believe that the pg analysis of the market is flawed. The market is looking for flow test data to confirm the three significant discoveries already made. Prd has raised funds three times to carry out flow testing and has yet to do so and a further delay will raise suspicion that something is not right . Based on the published data prd is likely to made substantial onshore discoveries, yet it has a market capitalisation of of £60 million instead of £180 million which is easily justified , because the market is fearing further dilution. The cng plan is an excellent way to address that, and then drill the hell out of the area from production cashflow, it’s a good plan and they should stick to it.

Pg should be aware that raising funds for one purpose and not using them for such purpose may have legal implications and it’s now time to flow test.

Jimmy

Yes, the boom gun only works after 16.30

J

Hi fernan

The green hydrogen project is currently being funded by total, in due course as the project progress and assuming the economics stack up, then the European investment bank have signed an agreement with Mauritania to provide project finance , expected at 90% of capex , with the balance funded by chariot diluting down its current equity interest of 50%.

The green renewables are financed on a jv basis with Total at a minimum of 50% , with project debt also provided at estimated 70% , so the equity components are relatively small so far.

Chariot have stated they are going to get equity funding at the subsidiary level, so hopefully no more equity dilution at top company.

Jimmy

Hi fernan,

I believe chariot has previously indicated these subsidiaries would be funded by equity placing into the subsidiaries and de merged in due course.

J

Great article in upstream, some very important insights on the business.

Firstly with regard to the suggested target of 250 mmcf per day, this is very achievable from three production wells and the proven gas reservoirs in anchois 1 and 2.

So what does that mean in terms of production ebitda.

Using the $12 mcf guided price this is $3 million per day gross, less royalties is $1,056,675,000 per year. Assume opex at $60 million gives an ebitda of $996,675,000 gross. Per year. At a 37.5% interest to chariot its $373, 753, 125 per year, at a 25% interest its $249,268,750 per year.

If the plan is for higher capex, carried interest, but lower carried working interest, very attractive.

Chariot currently valued at less than 6 months future ebitda assuming a very low 25% working interest.

Strong buy

Jimmy

The gas has been in place at anchois for approximately 8 million years with a very effective top seal that stops gas escaping during earthquake events over that time.

Not a worry at all

Jimmy

Hi surfit,

My comments on the cash sweep are based my negotiations for a project financing with a uk consortium of banks, perhaps a farmin partner may be accommodating, but there would be a price.

Jimmy

My view of the move onshore is for the following reasons.

1. By taking out the onshore licence it prevents potential farm in partners doing due diligence offshore and investing onshore . Narrows the farm in options.

2. Chariot have unlocked the geophysical signature of gas offshore and are now applying this onshore , I personally think they have identified areas of thick reservoir likely to be gas bearing and the potential reserves are bigger than previously announced.

3. A farm out deal for offshore may include a non recourse loan for the capex, this usually includes involves a “cash sweep” of the net production cashflow to repay the loan quickly, so that leaves chariot needing production cashflow from elswhere to cover basic ongoing corporate costs. With an 85% success rate, going onshore is the right solution to get into cashflow asap.

It’s a good move.

Jimmy

Predator down 3% after rns, chariot with no rns is up 0.4%

Jimmy