Member Info for Jimmy23

To remain for several years.
See.
https://www.theguardian.com/business/2022/aug/29/european-gas-shortages-likely-to-last-several-winters-shell-chief-rationing-europe-russia

Jimmy

Hi Kingbilly,
I am a big fan of ichimoku system. It’s particularly good for indices and and high volume stocks.
Jimmy

An $11 mcf gas price will generate $7 billion of undiscounted gross revenue.
Jimmy

Medlar
Fat finger syndrome, you are correct $1 per mcf is worth $637 million in undiscounted revenue for the field.
Jimmy

Hi surfeit,
$9.34 mcf is for natural gas in the USA, if that gas is converted to lng it’s at least double that price delivered to Europe.
An extra $1 per mcf will generate an extra $6.37 billion in undiscounted gross revenue for the field over its lifetime.
There is a 3.5 % royalty to be deducted and then 75% is due to chariot.
Expect a big increase in the anchois npv value.
Jimmy

Chariot did its economics off at an average price of $10 mcf.
Looks like price has moved up.
https://atalayar.com/en/content/sdx-energy-announces-new-gas-well-be-drilled-morocco

Jimmy

Hi fernan,
I do not have any information from the company regarding the pipeline size. I do seem to remember that chariot were to review the development in light of the new cpr proven gas volumes.
In the may 2022 corporate presentation at the very back is a comparison of other gas field developments and it appears in the case of a gas field offshore sicily that an 18 inch pipeline could deliver 200,k mcf per day.
Jimmy

Correction to farm out reserve calculation.
I previously stated incorrectly that if chariot farmed out 25 % for a five well exploration program and cash it’s proven gas volumes would increase if three of the low risk wells were successfull from a current net proven gas volume of 477 bcf. To 507 bcf. That should in fact should read 696 bcf net to chariot for 50% after a farm which successfully drills the low risk sattelite prospects.
So you may ask what’s the value of chariots anchois field after a farm out and if the three very low risk exploration well are successful and proven the audited prospective resources.
I previously calculated that a 25% of the risk weighted reserve and resources was 25% of 1014 bcf , being 252 bcf with a calculated value of $421 million or $1.67 million per undeveloped bcf of gas.
After a successfull three of five wells exploration drilling the proven 2c gas volumes would increase to net 696 bcf which if valued at $1.67 million per bcf is worth $1162 million plus the cash consideration of $212 million is $1374 million.
That’s the implied value of a farm out and successfull low risk drilling program.
That’s still valuing the undeveloped proven gas at 50% of its npv value.
Jimmy

Chariot has previously announced that its Mauritania project nour green hydrogen will be one of the lowest costs producers in the world , this is due to a combination of long daylight hours and strong winds make for a high utilisation rate of electrolysis equipment, hence efficiencies.chariot have stated they are putting together a consortium for this project.
Chariot are partnered with Total Eren to bring renewables enerygy to the African mining sector.
Total eren have green hydrogen projects in Australia and chile.
In a recent article total eren announced they are about to announce a major green hydrogen project outside of Europe
See.
https://www.rechargenews.com/energy-transition/another-aussie-green-hydrogen-hub-in-the-works-as-total-eren-eyes-1gw-darwin-project/2-1-1278144
See the end of the article.

Jimmy

Hi SF
What daily production capacity do you think an 18 inch pipeline could handle without compression
Jimmy

Hi fernan,
I agree with you that chariot need to look at increasing daily production of 70,000 mcf per day in light of the extra proven gas. Particularly to take advantage of the tax free first ten year period and the higher gas prices that are likely to prevail for the next few years.
Since the initial design studies have all been performed based on the 70,000 mcf per day, I think the priority is to get to production cashflow asap, at 70,000 mcf per day, then proceed to double production by doubling by installing another pipeline and doubling the processing facilities.
Traditionally one would redo the design and optimise the capex with consequent delays, in view of the huge price of gas in Spain, the priority is get to cashflow asap and finance the extra capex from production cashflow.
Jimmy

Hi fernan,
The phase 1 development plan will be at 70,000 mcf per day, if we assumed an average gas price of $15 per mcf per year it would generate revenue to chariot after 3.5% royalties of $277 milllion for chariots 75% interest.
Jimmy

Gas prices continue to rise.
The USA gas is currently $9.33 mcf
The Spanish gas price for 2023 is approximately $62.5 per mcf.
The anchois field gas economics announced by chariot were at an average of approx $10 mcf.
Jimmy

Hi fernan.
The gas volumes reported are for the 100% of the anchois field
J

Hi Dave,
Was typing too fast, yes the current share price does not reflect the risked value of the assets.
Jimmy

I should have added that if the three well program is successfull and has a pro rata npv of $866 million that then means chariots 50% is worth $1732 million plus the $212 million in a cash payment , so that’s $1,944 million, and unrisked that value is approximately £1.69 per share.
Each investor should apply their own views on the risks, but the current share price of 20p does appear to reflect the risked value of these assets.
Jimmy

Hi Sasha, good question, I used to be in serica but I lost patience waiting and missed out on a 10x return , so will not be making that mistake with chariot.
To do a back of the envelope farm out calculation let’s start with what we know from recent announcements.
1. Before the cpr resources update chariot stated that their 75% interest for 361 bcf had an npv 10% valuation of $900 million.
2. The 2c proven resources have increased from 361 bcf to 637 bcf and the undrilled derisked nearby resources are 754 bcf in three prospects with a chance of success of 49 to 61% . Using a 50 % risk factor the risk weighted resources is 1014 bcf.
3. The first calculation is to determine the adjusted npv for the risk weighted gas volumes, which is 1014/361. X $900 million = $2, 527 million for 75 % . Its a % of this that a farm in partner will see as value. My guess is that chariot would want to be operator and not go below 50% working interest so farming out 25% which is $842 million.
4. So what price would a farm in partner pay for this. I assume they will want to at least double their money so that’s a value of $421 million.
5. The farm in partner will want drill the low risk satellite prospects, let’s say three such wells and two other prospects in lixus. The cost of the last well was approx $20 million, so to be conservative let’s double that cost, would be a five well drilling program at a cost of $200 million and a cash payment of $212 million.

From chariots perspective if the three well low risk drilling was successfull it ends up with net reserves of 507 bcf compared to the current 477 bcf and a cash payment of $212million.
From the farm in perspective if the low risk drilling is successfull it end up with 25% of the enlarged proven gas volumes which would have a pro rata npv of $866 million, plus the value of the other two prospects in lixus, which I assumed to be nil for valuation purposes. So the farm in partner at least doubles its npv investment in a very short time.
Win, win.
Other views welcome, as lots of ways to skin the cat. I have not taken the higher gas prices into account in these calculations, just based on chariots published information.
Jimmy

Can replace coal.

Interesting development by an Australian company that claims that using hydrogen and its technology power stations can replace and be cheaper and greener.

https://starscientific.com.au/applications
Jimmy

Hi norskbear
I agree the FEED should be quick because they have done the pre feed studies early and this is a standard development concept.
The next key issues is the gas offtake contracts. There are two power stations in Morocco currently importing expensive gas from Spain, which is enough to take all of chariots intial daily production of 70, 000 mcf per day. Just got to agree the pricing formulae.
Then it’s full steam ahead.
Jimmy