Member Info for Jimmy23

n1
Undoubtedly chariot share price is massively undervalued, however due to huge number of shares issued last year there will be profit taking as we move up. That’s the opportunity for the patient investor.
150 meters of net pay gas reservoir is huge,
Jimmy

Listened to the pro active interview with Duncan Wallace.
Obviously a lot of restating what was in the rns .
I particularly noticed that chariot report that following the anchois 2 well results the nearby prospects are substantially derisked and that chariot will now be examining the continuation of the extra 50 meters of gas pay reservoirs into the adjoining prospects.
So further de risking and additional net pay to increase nearby prospective resources.
Jimmy

Hi tw, the question you asked is an extra 350mcf worth an extra £1.5 billion in market capitalisation, the quick answer is no.
Chariot previously disclosed that 361 bcf of proven gas would generate $1.5 billion in free cashflow to chariot, at $8 an mcf and that the npv value of this was $500million net to chariot. So in very simple terms just double the numbers to get current value for double the reserves. However, that excludes the impact of higher gas prices which are currently over $33 mcf, so being conservative using $11 mcf I previously calculated was worth an extra 50 p per share based on 750 bcf, that probably now an extra 75p on top of the base case value now at £0.91 per share for 1 tcf at $8 an mcf.
Jimmy

An extra 50 meters of proven gas pay is a lot. This will most likely have been signed off by netherland Sewell as it will be a key factor in the upcoming audited reserve report.
What’s really important in to days announcement is that chariot are now revising the development plan based on this information. That most likely means much higher daily gas production , as the first ten years of production are tax free this will have a huge impact on the project valuation, expect it to double to £1 at least.

My previous estimate of 750 bcf now upgraded to over 1tcf. Project economics being re run, expect very much higher production volumes, my guess is double risked value from 50 to 100p
Jimmy

150 meters of net pay reservoir in anchois 2
Wow

Hi buggboi,
I had been working on 750 bcf so we are pretty close for 2c reserves.
I am excited by anchois north which I estimate at 600bcf including the o footwall, not sure how it will be classified for audit purposes, but it’s certainly very low risk due to its proximity to anchois 2 and it’s seismic hydrocarbon signatures.
Jimmy

Hi nordell
The o sand was penetrated by the anchois 2 well and found both gas and water. My interpretation of the technical presentation is that the anchois 2 well encountered the o sand in a compartment and hence the gas water contact was limited to the Compartment.
Cenkos do state they expect the prospective resources of 543 bcf for the c, m and o sands to be converted to 2c prospective resources on page 28.
In all honesty I did not expect the O sand downdip of anchois to be 2c reserves which is why I have been working on 750bcf, but clearly cenkos will have the latest updated information
So nearly 1tcf looks likely per cenkos.
Jimmy

Buggboi
I think you may have added an extra 0 in your calculations.
I believe 1tcf @ $38 per mcf is $38 b value in the ground, undiscounted.
The chariot gas price economics were based on $8 mcf and the forward market is approximately $11 mcf.
Still huge numbers and market capitalisation is nowhere near recognising the value of the proven and low risk gas volumes that have been established so far.
Jimmy

Chariot has found large volumes of proven gas close to a major market pipeline.
In prior years it was pure high risk exploration with high hopes which failed to materialise.
Interestingly there have been two giant oil discoveries offshore Namibia in the last six months. In addition a Canadian company is exploring onshore Namibia where it has found no commercial oil but has interesting potential, it’s currently valued at circa $1billion.
By comparison the cenkos report, which is certainly very detailed assigns little value to the follow on gas prospects in the lixus licence area.
Chariot have reported a number of large gas prospects, below the the anchois reservoir horizons , sub nappe, which have not been quantified in size, unspecified upside with no reported value, but certainly of interest to the farm out market.
Jimmy

Hi fernan,
The anchois reservoirs have very high porosity and permeability so they will flow at very high rates. The development plan calls for three production wells, two of which are pre drilled already. Initially the economics were prepared on the basis 70 million mcf per day would be produced primarily for the local market at $8 an mcf.. a 14 inch pipeline was planned to bring the gas to share.
Previously, the limiting factor on daily production was getting enough customers in Morocco . Now that the Ukraine situation has created demand in Spain and Europe they need to maximise production in the first ten years which is tax free.
At 90 million mcf per day the capex will be repaid in less than 18 months , so the project is very economic and profitable.
I believe the limiting factor on production is the pipeline capacity and the capacity of the onshore facilities. Chariot have previously announced that they had carried out detailed development engineering studies and the initial production profiles would be based on that capacity with additional capacity added later as required, rather than delay first cashflow by re engineering the project,
I expect that the proven gas at anchois will last in excess of 20 years at 90 000 mcf per day.
This is going to be a really strong cashflow generator for a very long time.
Jimmy

With these high volumes, it looks like we have finally got a big buyer taking notice. This is just the start. The cenkos report of 51p value was at an old gas price of $8 mcf, if you value chariots proven 750bcf at at $11 an mcf , about one third of the may gas price then you can add another 50p to the cenkos valuation.
This move upwards is just the start.
Jimmy

The price of gas on the uk market this afternoon for may delivery is $32.37 an mcf .
Chariots comics were based on $8.00 mcf.
Even if we assume the long term price is $11 an mcf that worth the extra $3 an mcf is worth an extra £0.50 per share, as follows.
750bcf x$3= $2250 million x 75% working interest = $1,687.5 million x 96.5% adjust for royalties=$1628 million divided by fx 1.30 = £1252 million discount to present value reduce to 1/3 = £417.5 divided 830 million shares in issue = £0.50 per share.
This share price has a long way to go.
Others can calculate using their own assumptions. Regardless it’s a long way north of here.
And that’s just the value of the higher gas price not taking account of huge potential for low risk reserve additions.
Jimmy

Remember the broker notes are based on the pre drilling reserve estimates and the pre drill chance of success. We know that the brokers assigned a 36% chance of success to the c, m and O sands in their valuation yet the anchois 2 well proved these gas sands with 50 meters of net pay, exceeding expectations.
In addition the anchois north and satelite prospects are substantially derisked as stated by chariot and chariot stated the average success rate for these reservoirs onshore in the same basin is 85% and yet the brokers valued those satellite prospects at a 4% chance of success.
The brokers state they expect the reserve estimates to increase.
So plenty of opportunities for the broker valuations to be restated upwards strongly.
Jimmy

The unrisked value of the proven gas at anchois is worth £1 per share, so as the project progress through to first production at the end of 2024 there is plenty of opportunity for thebrokers risk weighting to be unwound.
There are very few aim listed oilers with proven gas and pathway to cashflow.
Plenty more growth opportunities.
For example, the cenkos report states that the Mauritania green hydrogen has an unrisked value of 85.5 p a share but at the pre feasibility study stage and with a 50% interest after farm out they apply a chance of success of 3% . With time this becomes another unicorn project worth close to $1 billion, in time.
Jimmy

Chariot prepared it’s anchois field development economics at $8.00 per mcf.
The summer time is typically a low price period for natural gas prices, the forward market for uk natural gas prices for the summer of 2025 is $10.90 an mcf.
Huge upside here.
Jimmy

The cenkos report is certainly detailed, the risked value is 51p and unrisked is 320 p.
They clearly state that they expect the additional gas found at anchois 2 at approx 588 bcf will classified as contingent 2c reserves bringing total 2c reserves to 904bcf.
Till it’s audited they are valuing it at less than geological chance of success, crazy.
The unrisked value of chariots discovered gas is approx £1 per share, per cenkos.
In addition, the cenkos report states that they expect a hedged price to be part of the gas sales contract, this in turn unlocks the project finance.
Chariot should disclose the name of their investment bank advisor to re assure the market they are getting appropriate skilled advice to maximise shareholder value.
Jimmy

Sf
Don’t get me wrong, what putin is doing is truly horrendous and my comments about chariot should be not considered to overlook the war crimes in Ukraine.
Jimmy

I read about that deep drilling project previously.
There are huge drilling problems when you go very very deep as the equipment can melt .
I think it may well be along term solution to global warming
Jimm

A new scientific paper has just demonstrated a new electrolyte for generating green hydrogen resulting in huge increases in efficiency and a reduced cost of generating green hydrogen of $1.50 per kg.
This is vastly cheaper than at present at high oil prices would potentially be cheaper than hydrocarbon fuels.
For chariot with a licence for wind and solar in Mauritania which is incredibly low cost this would be transformative technology.
See.
https://www.nature.com/articles/s41467-022-28953-x
Jimmy