Member Info for Jimmy23

The hydrogen council prepared a detailed analysis of hydrogen costs at.
https://hydrogencouncil.com/wp-content/uploads/2021/02/Hydrogen-Insights-2021.pdf
Page 13 shows a chart of the costs of hydrogen production, the gas price assumptions averaged $4.70 an mcf to generate hydrogen from natural gas. The forward price of natural gas in Europe for 2025 is approx $12.15 an mcf, which makes green hydrogen and ammonia very economic.
Jimmy

It’s not just the proven gas at anchois that’s more valuable but also the derisked gas prospects around it in the lixus licence.
In addition, the green hydrogen project is now economically variable as the production of hydrogen and ammonia from natural gas is now very very expensive, making green hydrogen and ammonia now very economical . Will revert with some numbers over the weekend.
Jimmy

The transitional power bisiness is certainly the long term future, but it will need equity cash to finance the huge capex, this can be provided from anchois alone, as well as paying out a substantial annual dividend. Plenty of cashflow to drill the lixus licence prospects and add a low risk 3tcf of gas.
Jimmy

The forward price for natural gas is rapidly moving upwards, the uk price for the summer of 24 has moved up £110.00 on ICE, that’s roughly speaking £11.00 an mcf or $14.85 an mcf.
Note that’s for the summer period and winter periods are approx 40% higher.
This compares to chariots forecast price of $8.00 an mcf.
With proven gas of approx gross 750 bcf the increase in cashflow of $6.85 an mcf is as follows
750 million x $6.85 per mcf x (1-3.5%) = $4957 million x 75% to chariot = $3,718 million, estimated present value say 1/3 = $1,239 million = £ £918 million per share 830 million shares= £1.10 per share for just the higher forward gas price.
For reference the forward price is approx 1/3 of the current spot price.
Jimmy

The supply of electoylsers appears to be limiting factor, if we are looking at 10gw of green power it makes sense to build an electrolysed factory on site.
Jimmy

Fernan,
My experience of take or pay gas contracts is that a minimum volume must be purchased by buyer each year and the price is usually fixed by reference to the contract price calculated as the average for a particular specified month.
For the balance of the gas supply as long as chariot have an offtake contract it can be used to secure debt finance, the price of the gas is usually referenced to a specified benchmark price , which in turn can be hedged for the duration of the loan repayment period . Depending on who the purchaser is the purchaser may well hedge the price and fix the price in the contract, in this way the gas purchasers balance sheet is used to hedge the price. Sometimes there can be a combination of such pricing structures, for example sell forward 1/3 , put option 1/3 and call option 1/3 , gives two thirds upside to gas prices with a two thirds downside price protection.
This is standard stuff for a good investment bank.
Jimmy

It’s certainly crazy when the cfo states on the record that there is to be a substantial increase in the reported value of the anchois discovery because of the increase in proven gas found at anchois, and the share price moves up by 1.37 % .
Time to get a listing in Canada.
Jimmy

Important that chariot are absolutely focused on getting to first gas production ASAP.
If SHC is correct that anchois is looking like 1tcf + then increase pipeline size to allow 200k mcf per day, as first ten years tax free, high gas price in both Morocco and Europe.
Need to get banks to fund anchois north, very low risk .
Jimmy

Just listened to Julian interview again. My highlights were.
1. Major increase of previous npv $500 million to be announced on the back of well results which now include 5 extra reservoirs totaling 100 meters of net pay.
2. Working with a major international investment bank to debt finance the anchois development.
3. Previously announced heads of terms agreed for 40,000 mcf per day take or pay gas sales contract for twenty years that underpins the debt financing. Also looking to partner this same company further dow the value chain .
Rissana licence now issued with commitment for a 2d seismic work programme to cost circa $1 million. Chariot have a substantial area in the south of the licence covered by a 3D seismic programme. Looking to see if direct hydrocarbon indicators are present in similar geology to anchois.

Comment.
Delighted to learn chariot are working with a major international investment bank, debt financing for anchois will be second nature to those experts.
I am a little puzzled by the further partnering down the value chain. Sounds to me like an offtake contract and marketing agreement with that large private commodity trader in Switzerland. Watch the small print , they will make more money trading off the sales contract than the marketing fee, very important that chariot controls the hedging contracts , they should take independent expert advice in this specialist area.
Interesting to note Julian said chariot are committed to returning cashflow to shareholders. I expect that with a very strong ebitda they will have a high annual divedend.
Forecast ebitda ranges from £80 to 140 million per year. If we assume a £30 million annual dividend that works out at a dividend yield of 41% based on the current share price.
Load up for the journey
Jimmy

The 2021 underwriting has finally finished with shares in issue now totalling 827 million.
See chariots website for rns
Jimmy

By the way the licence was previously held by repsol of Spain. With a severe gas shortage in Spain you can be sure they are talking to chariot.
Jimmy

Good presentation by Julia,
The key message was getting to production cashflow ASAP.
The new rissana licence is very interesting because to the south of the licence chariot actually have a large 3D seismic coverage. Note that just beside that licence is a well which had gas traces in it.
Julian stated they are reviewing the 3 d seismic for anchois look alike. Shareholders should review page 5 of the September 2017 presentation, geology slide top right. At
https://www.chariotenergygroup.com/wp-content/uploads/2021/09/Rabat-Deep-1-well-implications-for-prospectivity-March-2018.pdf
Note the yellow reservoirs to the right. Julian stated they are looking to see if they have similar seismic hydrocarbon indicators to those proven at anchois 1 and 2 wells.
Jimmy

The 3.5 royalty was included in those numbers.
The capex might be higher , but not a lot, chariot reported $1.5 billion free cashflow from 361 reserves from just a and b sands and we now have 5 additional reservoirs with gas estimated to bring reserves to 750bcf, which would generate over $3 billion in free cashflow, enough to cover a capex increase easily from 300 to say $400 million allowing for contingency.
In addition the forward price of gas on ICE for 2025 is approx $12.15 so this is going to be a huge generator of cash for gas on Europe’s doorstep.
At some stage the market will take notice
Jimmy

We should expect an Rns to morrow or tuesday, announcing the last payment under the underwriting agreement
Jimm

It looks high gas prices are here for a long time. Europe will look to move to non Russian supplies, good article at.
https://www.theguardian.com/business/2022/feb/25/how-can-europe-wean-itself-off-russian-gas
Jimmy

2.9million shares traded at 8.95 in one lot, looks like we are getting institutional support.
Jimmy

Hi nord,
Many years ago, when chariot was growing strongly, the share price had a technical chart pattern, called cup and handle, the pattern being a base price , currently 8p which rise past the recent high of 12 p and reach a new high of 16p , before repeating the process to fall to 12 and then 20p.
Typically would apply where short term traders buy into a strongly undervalued share and take profit as the share price rises to its fair value.
Interesting to see if it develops here on the back of the huge increase in long term gas prices.
Jimmy

It’s now official from total
https://totalenergies.com/media/news/press-releases/namibia-totalenergies-makes-significant-discovery-offshore-block-2913b

Interesting that total energy is a major shareholder in total eren, who chariot has partnered with for its renewable power business.
Will total now be looking at chariots acreage in Namibia. For starters the 3D seismic coverage must have cost $30 million, that’s a nice way to start negotiations.
Jimmy

On Reuters now also
https://www.reuters.com/business/energy/totalenergies-makes-large-hydrocarbon-discovery-off-namibia-sources-2022-02-24/

The geology setting for the two reported giant discoveries in Namibia are described at.
https://www.geoexpro.com/articles/2021/11/south-africa-poised-for-exploration-greatness

The key discovery was oil in the wing at well in Namibia, which is just north of chariots acreage.
Jimmy