Member Info for Jimmy23

Hi fernan,
Chariot have not published the resource estimates for sub nappe and for the rissana licence. All we know for certain is an additional 4.5 tcf potential at lixus and that the geology is expected to result in a 85% success rate.
The rest is upside, yet to be announced. Although the geology of the rissana area leads me to believe there is a very thick reservoir section north east of the lbs1 well which had gas shows. Obviously I don’t know if there is structure there but potentially another 2tcf, but it’s very early days and chariot did say they were looking for anchois look alike prospects in rissana licence.
Jimmy

Hi fernan
I agree the focus is getting to production cashflow asap. Then use that cashflow to drill out the 4.5 tcf of gas potential in lixus licence with an expected 85% chance of success, export surplus gas to Europe,
Happy days
Jimmy

We now know chariot are planning to produce at 70,000 mcf per day. At $8 mcf that’s a field gross revenue of $204 million . Double that for the forward price of gas and its $404 million per year. That’s the range. Based on a two year project loan payback, which is very fast, in simple terms it can support debt funded capex of between $400 and $800 million. So capex is not the issue it’s the gas price. Take your pick.
Jimmy

Ceo b
I see no evidence for your unsupported assumption that capex for anchois has risen from $300 million to $1billion.
What we do know is what’s stated in the rns is that the npv for 361 bcf of proven gas is $900 million net to chariot.
Let’s stick to verifiable facts.
Jimmy

Ceo b
I very much like the low risk potential of anchois north.
I just do not see the need to farm out, it’s always an option I accept.
Jimmy

Ceo b
What we do know from the last rns is that the anchois field is planned to at 70,000 mcf per day.
What we also know is that the forward price of gas for summer of 24 , a low gas period, is $16.50 mcf,
That’s is capable of generating $421 milllion gross revenue per year.
Obviously various stages to get there, but I am confident they can do it and that the gas market is supportive, which in turn secures the debt finance.
By the way that’s based on 361 bcf of gas, so the upside on new gas reserves just gets better.
Jimmy

The ice forward future gas price for the summer of 24, a low gas period, is $16.5 mcf
Chariot economics prepared at $8.00 mcf
Jimmy

Ceo b
Chariot have options to deliver this project to cashflow, farm out is indeed one such option, but it most likely also gives away the upside from low risk folllow on exploration in the lixus area.
The other options are
1. Project finance,
2 project finance and venture debt,
3, infrastructure finance as as Macquarie bank build and lease the the pipeline, plus project finance debt.
Lots to choose from jimmy

Hi ceo b
Chariot have a strong track record of delivering on time and on budget. The sub sea alliance who will project manage the development are experts in this area and they will be funded by project finance put together by Soc Gen , experts in that area also.
All normal, great project, no need to farm out. Just take note of the updated npv value of chariots interest at $900 million for only 361 bcf of proven gas from A and B sand. Or approx 74 p a share,what’s not to like.
Jimmy

Hi fernan,
75% of funds raised are for the anchois field project, so that’s value enhancing . I don’t fully understand the economic payback of the renewables , but project nour is going to be huge so happy to spend money on that and then bring in partner.
Jimmy

Fernan,
The heads of terms with the Sub Sea Alliance, who are performing the Feed and previously did the pre Feed , was that they will project manage the project and operate the field afterwards, which I agree with, as it’s best to leave this to the experts.
Jimmy

Hi CeoB,
To answer your questions,
1. I don’t know when chariot prepared the $300 million, but it would certainly have included the cost of the producer anchois 2 which has now been drilled and suspended as a producer. Certainly saving $20 million of the $300 million capex. What we do know is that chariot updated its npv for 361 bcf recently to $900 million based on 70k mcf per day.
2. Chariot recently stated that they intended to get to production as quickly as possible using two existing wells. I expect that in time they will add a third well but will be paid from cashflow and will increase daily production above 70k mcf per day.
3. I expect the pipeline costs to have increased , would not expect capex to increase more than 25% to 30% , easily manageable
Jimmy

CeoB
Your cost increase of $200 milllion on a project capex of $300 million is a 60% rate of inflation which are not seeing. Furthermore the increase in daily production to 70 mmcf will generate an extra $55 million per year.
So no problem with realistic capex increases.
Jimmy

SpeedF,
With regard to the cpr there really is a lot going on.
My reading of the situation based on the limited published data for each reservoir is as follows.
1. The A sand had been expected to pinch out towards the anchois north fault, but in fact was encountered at the anchois 2 well location and recovered gas . The last map showed the reservoir extending to the anchois north fault and continuing into anchois north. Increase from audited reserve expected.

2. Sand B , an extra 25 meter net gas pay sand encountered not previously included in audited reserves. A review of the seismic profile does indicate to me that extra B sand is not latterly extensive across the field, so will need to be re mapped and possibly seismic reprocessed to map fully. Extra reserves not included in audited reserves .
3. The C and M sands have more sands packages than prognosis , likely that some of the extra 50 meters of net pay are in this package zone. Seismic to be reprocessed to laterally map thin reservoir packages. Extra reserves not included in audited reserves to be added here. Clearly these sands also extend into anchois north and can be classified as probable proven reserves in anchois north.
4. The sand comprises of two reservoirs instead of the forecast one reservoir. While gas was found in a small part of the O sand, it looks like it encountered a gas water contact. A review of the seismic profile indicates that the anchois 2 well located may have entered the O sand in a separate fault compartment , and hence down dip the O sand has a separate gas water contact and is mostly gas filled as per the Avo And spectral decomposition maps. I suspect this is the area that reserve auditors require additional work before signing off on gas downdip.

With seven reserveroir sands , it struck me as odd that they mapped seven gas water contacts , which would indicate sealing shales between each reservoir, I suspect they have been too conservative in their interpretation but more time and analysis us required before signing off on further upside.
So lots of good news but more work to do to finalise .
Jimmy

Yes it’s true there was dilution of 13% but the npv of the pre drill proven gas reserves of 361 bcf has increased from $500 million to $900 million , so I am ok with that.
Certainly , I am puzzled why they did not update the cpr before this fundraising, I suspect they need to re process the seismic to pick up the 50 meters of gas pay that was initially below log resolution.
Jimmy

Hi Schiemel,
As you say the $3 price you reported was three years ago, now the USA price is $8.30 mcf as per
https://www.nasdaq.com/market-activity/commodities/ng:nmx
So 1tcf generate $8 billion in undiscounted gross revenues
Jimmy

It’s not just the 1tcf of gas we want to keep , but the 4.5 tcf upside nearby anchois.
J

Npv of anchois to chariot is now $900 million for 361 bcf pre drill 2c reserves.
If anchois is 1000 bcf, as I estimate, then npv is $2.5b or about £1.48 per share, adjust for risk and exploration appraisal upside.
Jimmy

https://www.geoexpro.com/articles/2020/06/understanding-the-true-hydrocarbon-potential-of-the-lixus-offshore-licensing-area-morocco

Hi palmsport,
Excellent question.
Post well analysis to find out why a well failed is really critical . Previously chariot drilled in frontier areas with little well control ( nearby previous drilled wells) to reduce risk. Much of the previous wells were based on 3 d seismic and were based on a best estimate of the source rock from which the reservoirs were expected to be charged with oil and to retain it. In my opinion Chariot wells mostly failed the source rock and oil migration stages and hence were not oil discoveries.
ANCHOIS IS DIFFERENT.
Firstly, the anchois 1 was an old discovery, so it proved that the gas had migrated from the source rock and was trapped in the reservoirs and stayed there. Before chariot got involved they analysed five wells in the licence four of which did not find gas . Chariot analysed why the wells failed and why anchois was a discovery. In addition it looked at the where the reservoirs were likely to be gas filled and was able to identify seismic signals which were the same as where the gas was proven. For me what I find particularly exciting about the anchois and lixus areas chariot worked out correctly the timing of of the gas charge was when Africa collided with Europe which pushed Morocco up causing the gas to migrate from the source to these shallow reservoirs . What makes this area of north Morocco special is that large quantities of mud and salt also moved up basin faults thereby sealing the gas that previously migrated.
When the proven gas is used validate a seismic direct hydrocarbon indicator it very substantially de risks the area. The recent anchois 2 well validated this geological and seismic model . The drilling success rate onshore the same basin is 85% and that’s really important because chariot has identified prospects in its 3D seismic area in the lixus licence area with an estimated 4.5 tcf of recoverable gas.
With high gas prices and Europe and Morocco both urgently needing gas and long term security of supply, chariot really is in the right place at the right time.
Please read the geo expro article written before the anchois 2 well was drilled, for reference, will post separately.
This is a special opportunity, and I am invested for the long term.
Jimmy