Member Info for Jimmy23

Gerbil,
£2.5 million to £25 million in two years is 1000% not 100%.
J

My post yesterday should have read if the top seal fails to the east of mou 2 then the field is a lot smaller. ……. Not to the east of anchois 2

Older and wiser,
You are correct , I am for the 20 mmcf per day result from mou 1 and 2 which gets predator to rapid production cashflow. The higher volumes of 150 to 250 mmcf per day are in my opinion based on the best case results. SDX energy reported success from 9 of 10 wells drilled in rharb basin over 2021/22 and predator claim their acreage is a continuation of that basin.
The upside case depends on a sedimentary fan extending from mou 1 to mou 2 and being gas filled. We know the reservoir was over pressurised at mou 1 and to the east of the proposed mou 2 well location the reservoir appears to pinch out against a fault. Above that pinch out point there appears to be a gas cloud which indicates that there has been some top seal failure at some point. We know from anchois 2 results that thin top seals can be very effective. If the top seal fails to east of anchois 2 then the gas reservoir will be smaller and restricted to the four way dip closure and the p50 resources, but still very economical , subject to flow rates confirmation.
So what will it be. Pdr seem to me to be promoting the best case result when they refer to production volumes of 150 to 250 mmcf per day. So what’s the evidence.
Firstly, we do not know the gas water contact, but Pdr did hint that there was a seismic flat spot, indicative of a gwc between mou 1 and mou 2 , I have seen a possible flat spot in the seismic, but it was twt seismic and not depth converted which is required to validate the flat spot. Got to drill to find out.
Jimmy

Worth. We know that The project is intended to produce 700,000 mt of hydrogen per year and that’s its going to be one of the lowest cost producers in the world. To be conservative let’s say it makes a $0.50 cents per kg net profit that works out at $350 million gross per year and let’s say chariot reduce down to 15% for a capex carry, then ebitda to chariot would be $52 million per year, x6 ebitda gives a value of $315 million. A recent stock market flotation of a green hydrogen company on Euronext would be supportive of such a back of the envelope valuation.

Just my thoughts and other investors may have other views but it gives an idea of the journey we are on.

Jimmy

Hi wizard
Some good questions in your post . I will give you my views on the matters you raised.
1. Have we reached the 1 gw of green power deals by end 2022.
Not yet, 485 mw announced so far, the presentation says heading towards 1 gw by end 2022. The recent announcement by chariot of an interest in an electricity trading company in South Africa is hugely important as chariot can now offer mining and other clients the ability to sell surplus electricity into the market. Strategically this is very important. As chariot have minority interests in the projects which in turn are highly leveraged, this is a long term strategy that will create high values , but will take some time to generate surplus cashflow.
2. I believe AP meant that each pillar could be worth $1b to chariot, will take time but gas is the fastest rout to the first $1b .
3.A why not go it alone at 75%. With high gas prices likely to prevail for some time it’s likely that chariot could go it alone. The ability to go it alone depends on the gas price that can be fixed for the first 2 years of production. At 100 mmcf per day the project is very profitable even at higher capex and lower gas prices, so it could take on subordinated debt if required, with no dilution of its 75%.
4. What should a stake be for a 25% partner. It really depends whether it includes exploration drilling or not. Assuming 100 mmcf per day and a local price of $8 ( very conservative as predator are planning $16 mcf) and a Spanish price of $20 ( very conservative as the forward price for 2023 is $32 mcf) and $40 million opex gives an ebitda of £285 million for chariots 75%.
If the value is 4x ebitda because it’s pre capex the value would be 285x4 /3 = £380 million for 25% less 25% of capex say 25% £125 would give a value of £255 for 25%. The field has a life of 17 years so buying 25% on a four years production payback is very attractive to an investor. Note, if such a deal occurred some of the funds may be used to drill the extra low risk prospects. However, the implied value to chariot is that it values chariots 75% at £765 million. Just a back of the envelope calculation but it very much depends on the gas price.
5. What else should a partner bring to the table, in my view chariot need gas trading or offtake skills which could be provided by the likes of glencore or trafigura but they drive a hard bargain and the devil is in the detail with such parties.

What % of profits should be reinvested, in my view once debt levels are reduced to a comfortable level then the cash flows could easily handle a £40 million annual dividend, with the remainder of cashflow used to drill and prove up the very low risk prospective resources of 4.5 tcf reported in the lixus licence area.
6. What’s project nour green hydrogen worth . This will depend very much on the cost of electroylsers which chariot are pilot testing with Oort energy at the moment. This project is a number of years away from production so what c

Older and wiser.
I understand your confusion. Predator have not separated the names of the prospects to be drilled from the name of the well.
The mou 3 well was previously attributed to the undrilled Jurassic carbonate oil prospect, now it’s being repositioned as an additional production/ appraisal on the prospect that is drilled by mou 1 and 2, to be drilled shortly.
I know it’s very confusing.
It’s best to focus on getting the gas proved up and into production before looking at the oil prospect,.
Jimmy

The reason for ordering now for mou3 is that you do not want to pay rig standby rates after mou 2 while waiting for equipment for mou3 to arrive.
It now looks like mou3 will be a gas production well, assuming all goes to plan with mou 2.
We still do not know the location of mou2 and I trust it is within the four way dip anticline and not the stratigraphic trap locations.
Jimmy

150 mmcf per day planned for the field. This will satisfy all Morocco current requirements and export surplus to Spain where the futures market for gas for 2023 is $32 mcf.
This could be a huge cash generator very quickly.
Jimmy

https://www.moroccoworldnews.com/2022/11/352569/newmed-energy-eyes-moroccos-natural-gas-renewable-energy-markets

Interesting article confirming total take over of chariot partner Total Eren with a focus on chariots project nour in mauritania.
https://www.upstreamonline.com/energy-transition/totalenergies-to-take-100-control-of-total-eren-in-2023/2-1-1360070

Jimmy

Total to drill appraisal of its giant Venus discovery in Namibia which if successfull would increase reserves to 10 bn bbls.
https://www.upstreamonline.com/exploration/totalenergies-plans-ultra-deep-water-probe-on-massive-extension-of-venus/2-1-1359200
Jimmy

Hi wizard,
The tradition is that a boom is declared if the price closes up 10% on the day.
A new high 10% may take some time as the chariot price exceeded £3,00 historically.
J

It’s been a long time coming but we have an official Booooooom with a close of more than 10% on the day.
Jimmy

Yes , the gas price cap should have read €275 Mwh still equivalent to approx $83 mcf

Eu has proposed a gas price cap of €275 kwh equivalent to about $83 mcf.
Chariot prepared it’s economics at an average price of $10 mcf
Jimmy

A possible buyer for predator when it flows gas.
https://www.jpost.com/business-and-innovation/article-722899?utm_source=jpost.app.apple&utm_medium=share
Jimmy

Chariot is currently at an advanced stage of negotiations with onee , the morocco state power generator who is currently importing natural gas from Spain.
The current market price for natural gas for 2023 in Spain, is $32.5 per mcf.
Chariot prepared it’s economics at an average price of $10 per mcf. With Gasprom announcing they intend to cut off gas exports to Europe via the Ukraine pipeline it’s likely there will be further pressure on gas prices.
There is a strong incentive for Morocco to replace natural gas from Spain at $32 mcf with lower priced morocco gas.
Even if chariot can lock in a gas price that’s 50% less at $16 mcf, this will generate $1.2 million in revenue to chariot per day.
Jimmy

Hi wizard,
That well to be drilled by total in the orange basin is some distance away and just south of the border with South Africa.
Jimmy

Chariot has signed a joint venture with Oort energy to pilot test its new innovative low cost electrolysers which it claims will revolutionise hydrogen production.
Oort energy have just appointed a chief commercial officer to lead the commercialisation of the technology.
Looks like good progress is being made .
Jimmy

Interesting comparison to chariot, who has economic volumes of proven gas in relatively shallow water offshore Morocco and substantial nearby exploration prospects with chance of success of 49 to 64% .
No wonder Ap stated there was a lot of interest to farm in.
Jimmy