Member Info for Jimmy23

I have read the annual report and my conclusion is that it’s highly unlikely they will be looking for equity finance, which in my opinion has held back the share price.

At a minimum , it appears to me they will get a lump sum cash payment ,probably $50 million to reimburse past costs,

There will be project finance, but not maxed out, as they will want funding with security in place to finance the expansion of the gas processing plant from 105 mmcf per day to at least 150 mmcf per day to allow for the inclusion of production from the O sand reservoirs.

The farminee will then finance the remainder of the capex, through a combination of cash contribution and non recourse loan.

Farmineewill also fund and and carry chariot in drilling at least two additional wells on the lixus licence, including the very low risk anchois west.

I don’t know how much equity that chariot-will be left with but my guess is that a major would not want a junior oil company to control 50% so my thinking is chariot will end up with 40 to 45% .

While one can only guess as to what the precise farm in terms are, it’s likely to be within an overall production payback of 3 to 4 years for a farminee.

We know that production will be 105 mmcf per day , initially, and based on the forward price of gas in Spain for 2024 and the discounted price for take or pay gas for power generation, an average gas price of $11 to 12 mcf would not be unreasonable.

While investors can only speculate on the outcome, you can be sure that the broker reports know the deal outline, so it’s likely to be more than the 55 p per share they are guiding.

Huge re rate is due.

Jimmy

Wizard,

With more than fourty companies interested in farming in, I think your suggested outcome is unlikely.

Jimmy

To day announcement is great news, unlikely to be the feared equity dilution that’s so discounted into the share price. If all goes according to plan , large cash injection to company tax free, and capex carry to get to production cashflow including the drilling of two development wells that are highly likely to double proven gas volumes.

If we can keep 40% licence interest, very happy days.

Jimmy

Page21 of the corporate presentation shows a seismic cross section across the basin that includes the shallow seismic reflectors.

https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2021/09/29105657/Webinar-Presentation-website-Version-28092021-Corrections-15.40pm.pdf

One can clearly the stacked reservoir reflectors from the shallow gas recently discovered to target depth.

I expect they will have reached Td by the end of this week.

Exciting times

Jimmy

Hi surfit,

My posting was in answer to your question does anybody have any examples of takeovers of companies with undeveloped discoveries.

The value of chariot is dependant on three factors, reserves and probable reserves , production flow rates and gas prices.

Jimmy

Surfit,

It seems you are unaware of the takeover of cove energy which had a small interest in a large undeveloped gas discovery off Mozambique and was purchased at a huge premium.

Jimmy

I expect that the delay in announcing a farm out deal was due to fall in European gas prices which has now reversed due to the announced closure of the giant Groningen field in Holland.

The huge potential of the licence area will have attracted the interest of the major oil and gas companies.

There is also threat that Russia could cease exporting gas to Germany , due to its support for Ukraine, which would cause a huge shortage next winter.

Gas prices for 2024 currently $17.25 mcf so anchois will be a strong cashflow generator which will support substantial project debt.

I estimate a takeover bid, if it were to happen at £0.75 to £1.00

Jimmy

In summary predator have identified a new gas bearing reservoir of 11 meters that has indications of high porosity and permeability and because the gas in the reservoir is overpressurized it’s likely to be connected to a high volume of gas. It appears that this sand interval was not previously mapped but appears to have a areal extent of 6km2.

Keith has calculated that this is likely to result in reserves of close to 14 bcf,

That is enough to get into compressed natural gas production in 2024 .

The forward price of gas for 2024 in Spain is currently $17.25 mcf so the local price of such imported gas is likely to be over $18 mcf.

Based on the average flow rate per meter of 1.1 mmcf per day in the nearby basin the expected flow rate is about 12.1 mcf per day , but could be a lot higher as the reservoir is over pressurised.

As there is also another 10 meters of overpressurized gas in the tgb2 reservoir in mou 1 we are looking likely to have a combined daily production, so far of over 20 mmcf per day, enough for a very profitable cng operation in 2024.

Strong buy.

Jimmy

Just for clarity, the calculation of the forward price of gas for 2024 in Spain is as follows.

€54.50 per mwh divided by 3.412 = €15.97 mcf x fx rate to usd $1.08 = $17.25

Jimmy

$17.25

Typo

Error in calculation.

Closed this evening at €54.50 mwh

Equal to approx $12.25 mcf for 2024 forward price

Jimmy

Yes mwh.

Approx $14.20 mcf

Jimmy

Forward price of gas in Spain for 2024 has increased from €40 kwh to €50.4 per kWh.

Looks like the market is finally realising there is a future shortage.

Jimmy

Initially when reading that an unexpected high pressure shallow gas reservoir has been encountered, one thinks great as at least there is likely to be enough gas for cng, but also there is a concern that perhaps deeper reservoirs reservoirs could have a top seal failure.

In considering this matter, it’s worth noting the following.

1. The basin has undergone at least two periods of inversion.

2. There is a large gas cloud in the seismic to the east of mou 2 indicating gas seepage in volume into that area.

3. The tgb2 deeper reservoir in mou1 is also overpressurized.

4. There were no/little gas readings in the shallow reservoirs encountered by mou2.

So what does this all mean?

Obviously, we have to drill to Td to find out.

However, during basin inversion gas expands as the reservoirs are uplifted and depressurised , this could cause migration of gas at the spill points of each reservoir structure and also cause gas migration up the fault migration pathways.

This opens up the interesting possibility that the over pressure in tgb2 at mou1 and the overpressure of shallow gas in mou3 may indicate a common overpressurized gas migration fault migration pathway. The lack of gas shows in mou2 in shallow reservoirs could be the result of the very thick mud seal in mou2 stopped upwards migration. As there does not appear yet to be a thick mud seal in mou 3 there was no restriction on gas migration up the fault.

Obviously, as more data becomes available there could be other explanations, but interesting possibilities for gas in six more reservoirs.

Jimmy

Wafflen

I think there should be a comma inserted for clarity.

“Drilling ahead, on schedule and within budget.”

Jimmy

£203 million ebitda per annum, for 17 years

Thanks dicko,

Yes , I agree these new shallow sands at mou 3 are separate from the shallow gas sands at mou1,

The Pdr valuation of two such accumulations over a 6km2 are still relevant.

Lots to look forward to.

Jimmy

Page 21 of the Pdr presentation is a useful reference for the potential of 10 meters of shallow gas in respect of an area of approximately 6km2 at

https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2022/09/Proactive-Presentation-Final-8-September-2022-LATEST.pdf

Now I cannot tell if these are the same sands as at mou 1, shallow gas, but they are at a similar depth. Anyhow from a valuation perspective it looks like we are dealing with two shallow gas reservoirs which Pdr assigned a a value of $249 million to each. X 2.

These shallow gas reservoirs may be connected and flow test pressures will inform that analysis.

Jimmy

If

Great news this morning.

Looks like this unexpected shallow gas zone is at a similar depth to the 10 meters of shallow gas encountered at mou 1 and audited at that location. We can expect a flow test from these zones at both wells.

Shares due a major re rate.

Jimmy

Should read nearly 10%

Jimmy