Member Info for Jimmy23

See details of reported giant discovery in Namibia at.
https://12ft.io/proxy?q=https%3A%2F%2Fwww.upstreamonline.com%2Fexclusive%2Flife-on-venus-totalenergies-namibia-wildcat-hits-reservoir-amid-rising-optimism%2F2-1-1169372&fbclid=IwAR2W2C0B3iiHcThWCYONV7j2XzcvcjUptkhZ4lgOqnm9iSeYSNr27_QxRjw

Hi surfeit,
Chariots acreage is in the luderitz basin which is a continuation of the orange basin in the far south offshore Namibia.
The key issue is to find regional source rocks mature for oil. The two giant discoveries in the south Namibia are in deep water where the source rocks are generating huge amounts of oil.
Chariots prospects can seen in the sept 2017 presentation, page 11, small map in top left of page shows the deep water prospects. With a huge 3D seismic coverage this makes it ideal for farm out.
See.
https://www.chariotenergygroup.com/wp-content/uploads/2021/09/Oil-Capital-Presentation-Sept2017-1.pdf

Chariot major focus should be getting anchois into production ASAP.
Jimmy

This is the second giant oil discovery offshore Namibia. The key has been the widespread presence of oil source rocks to the west of the volcan ridges offshore Namibia.
Chariots blocks are located in the luderitz basin is a continuation of the orange basin where these discoveries have occurred.
Chariot has a number of prospects that can be charged by this oil source rocks.
Jimmy

Interesting that our new broker recently fubraised and listed a hydrogen technology company on uk market. CPH2.l
They currently have a market capitalisation of £170 million.
Their technology is described at.
https://www.cph2.com/our-technology/

Interesting potential partner for Mauritania project.
Jimmy

Bigguboi,
At a hundred meters above, ground or sea level the wind in Mauritania blows at 10 meters per second, consistently, as it’s a wind from cold Atlantic into the warm Sahara desert, this make it incredibly cheap electricity , hence suitable to make cheap hydrogen or ammonia.
In the short term high gas prices are very good news for the anchois field development and to farm out the exploration acreage around anchois.
Jimmy

Increased cost of hydrogen gets passed on to the hydrogen user.

Bigguboi
You are correct that hydrogen producers from natural gas will pass on the increased price of gas to to the hydrogen producer, for as long as they can.
If it costs a lot less to produce hydrogen using renewables, the price of green hydrogen to the end user will be cheaper , hence there will be a market which does not currently exist, hence value for green hydrogen, where no value is currently attributed to the project.
Jimmy

Hi bigguboi,
As most hydrogen and ammonia is produced using natural gas as its feedstock and major raw material cost, a large increase in natural gas prices results in a large increase in hydrogen and ammonia prices to the end user.
A high hydrogen and ammonia price makes the production of such products using cheap green power now economical in Mauritania.
I hope that’s a little clearer.
Jimmy

With the Russian move into Ukraine the Germans cancel the nordstream pipeline and are desperate to find alternative sources for the 30% of its gas it imports from Russia.
The current price of gas has risen to $26 mcf and the future price for two years hence is similar. Europe is now desperate for alternative sources of gas.
Chariot can provide part of the solution with its anchois gas field development, which was based on a gas price of $8 mcf . The local Morocco price is based on the oil price and it’s now approx $10.50 mcf which has a huge impact on the value of chariots proven gas reserves.
With circa 750 bcf of proven gas the share price for the proven gas is worth approx £1 per share.
With 3.25 tcf of gas nearby derisked by the recent anchois 2 well there is huge value here only 40km from shore and close to the pipeline to Europe.
I cannot believe that the market has not taken notice .
In addition, the high natural gas price is the main driver of an increase in hydrogen and ammonia prices, this now makes the Mauritania renewables strongly economical.
The European forward markets are pricing in high gas prices for years. The banks will be lining up to lend chariot the money to rapidly develop the field and drill the satellite low risk prospects.
We need our new broker to issue a broker report ASAP to update the market.
Incredible value for those who care to look at the facts.
Jimmy

Henry,
The starting point for production cashflow is the well results, and the last presentation gave a detail run through of such well results which exceeded expectation. Chariot also laid out a roadmap for first revenue by end of 2024, which is very quick indeed for the oil and gas industry.
Prior to the well results, chariot appointed specialist subsea completion engineers to perform the engineering and design, agreed a heads of terms for the sale of gas on a take or pay basis , secured letter of intent for capex development financing.
After the well results, they got a commitment from the state oil company to rapidly progress the development of the field.
The next stage is to integrate the well results into the field reservoir engineering model, design the well completions and produce a production profile that will be audited and reported as the proven reserve, from which funding, construction contracts and offtake contracts are based.
That’s the roadmap, and there is a commitment to get first gas by end 2024.
We are coming up to a month since the presentation, so it would be good to get a further update in early March on progress, and in particular the new best estimate of 2c reserves.
Jimmy

Hi John,
Good questions.
I too am a long term holder of chariot shares.
Clearly chariots exploration in Namibia failed. The exploration team and advisors to chariot at that time were very strongly focused on using cutting edge seismic technology and advanced geochemistry to identify oil source rocks and geological traps to identify large oil accumulations, and to have this verifified and funded by the farm out process. It did not work.
In my opinion what was missing was a thorough basin modelling to show the deposition of the source rocks, it’s maturity to generate oil and for it to migrate into oil fields. We now know after drilling that presence of volcanics effectively killed the oil source rocks . I remember talking to Namibian oil experts who reassured me that volcanics were not a problem, they were wrong.
Unfortunately, oil source rock maturity was also a problem for chariot in its first well in Morocco which also failed.
So what’s changed that we should now have faith in chariots latest discovery.
Firstly, chariot took out acreage in a geological basin that has proven commercial gas production, so the source rock maturity to generate gas is not in question.
Secondly, it took out the lixus licence which contained anchois 1 discovery and using its advanced seismic analysis skill set evaluated it as being bigger than previously thought and then got this independently audited by world experts.
Thirdly, it set about developing a detailed geological model to explain why gas was found at anchois and indeed onshore and most importantly why it was not found in four other dry wells in the licence. It then integrated this information into the seismic analysis and using seismic spectral analysis identified those areas near anchois and elsewhere in the block that were predicted to have gas reservoirs, and also identify reservoirs with water. This was then validated with the anchois 2 well very successfully. That process has yielded a commercial gas field that is targeting first gas by end of 2024. Chariot reported the success rate onshore in the same basin is 85%.
What’s truly exciting is that we have proven sufficient gas to develop the discovery and that chariot have derisked circa 4tcf of gas 40km from shore.
Yes, it’s been a long and expensive lesson but we are on a road to generating circa £80 million ebitda per year, with huge follow on potential
I certainly expect that chariot avoids equity dilution , and debt finances this huge development that can generate circa $3 billion of free cashflow from the current proven gas.
Chariot have previously had high expectations but have always reported its drilling results correctly, even though they disappointed.
The well results from anchois 2 were professionally reported and were thorough and the information has been detailed and consistent .
Obviously the next steps include an independent experts audit of the gas that’s been discovered which then forms the basis for the project financ

Hi bugguboi.
Technically gas is a reserve when it’s either in production or all the conditions necessary to bring it into production are in place. So this includes the financing, construction contracts etc.
The 2c classification applies when the quantity of gas is verified subject to the economic and commercial contracts to develop it being put in place. I am expecting that following the anchois 2 well results the 2c quantities will be approx 750 bcf compared to a pre well prognosis of 900 bcf.
The increase in proven gas from 361 bcf to to 750bcf is as a result of proving gas from 2 reservoirs to 7 reservoirs.
The prospective resources are the expected gas volumes that are potentially recoverable but are subject certain geological risk and need to be drilled to be verified.
The results of the anchois 2 well have validated a seismic direct hydrocarbon indicator that predicted the presence of gas with a very high confidence rate. Chariot report that the results of the anchois 2 well derisk the similar prospects in the lixus licence that total approx 4 tcf of gas . Chariot report that the drilling success rate for gas onshore Morocco for the same geological setting is 85% .
This discovery is truly transformative for both chariot and Morocco , and is likely to be important for Spain also,

Then there is the potential of the deeper gas and oil prospects from where the gas originated.
This willl be very interesting to big oil. Either to farm in or takeover chariot.

Jimmy

What’s becoming very clear is that Europe needs to replace 30% of its gas imports, currently from Russia to a safer secure nearby supply.
Chariot have proven reserves of circa 750 bcf of gas and derisked gas prospects of another 3.25 tcf .
Chariot will be taken over for these assets.
I would prefer if it developed them with the bank finance it has lined up, but big oil will be taking notice of these low risk assets on Europe’s doorstep.
Jimmy

The namcor press release announcing the shell discovery discloses that both the primary and secondary reservoir targets found oil.
Shell have promptly moved to drill a second well , extraordinarily quickly.
See.
https://www.namcor.com.na/wp-content/uploads/2022/02/NAMCOR-Press-Release-The-Graff-1-Deep-sea-discovery-_Final_3_Feb_2022.pdf
The Total exploration well Venus 1 is reported to have also found oil, the well results scheduled to be announced by end of this week.

Jimmy

Namibia
Report by Reuters on shell discovery.
https://www.reuters.com/business/energy/namibia-aims-first-ever-oil-output-by-2026-after-shell-discovery-2022-02-07/
Jimmy

Speed f
I do not agree that chariot is a pipe dream, they have audited reserves of 361 bcf from two reservoirs, and now have seven gas zones. That’s proven. That’s a firm asset that will be generate £80 million ebitda from end of 2024, with a high probability of generating 3b dollars of cash from those two wells.
If Russia does go into Ukraine European gas prices will rocket and that makes chariots very low risk satelite gas prospects relatively close to the gas pipeline to Spain, very very attractive to oil major farmin , or indeed a takeover of chariot, I will take a £1 per share.
Jimmy

I am expecting a further significant drop in equity markets next week but remain long in chariot and not selling . It’s probably best that chariot do not release good news in a bad market.
Jimmy

Namibia is now the focus of big oil, with shell discovery being followed up immediately with an appraisal well and total reported to also have made a discovery at its Venus 1 well
Good summary at.
https://energycapitalpower.com/top-international-oil-companies-exploring-namibias-hydrocarbon-basins%EF%BF%BC/
Jimmy

The facts are very simple.
1. We have had a very successful appraisal well which exceeded expectation and a declaration the company is moving to first production by end of 2024.
2. We have a letter of intent signed to sell gas to the Moroccan market.
3. We have a world class alliance of field development experts appointed.
4. We have letters of intent to provide project finance from two banks.
So this is all very good so why has the share price risen and then fallen back
A) the number of shares has doubled in 8 months with significant profits being cashed in .
B) the general markets have been declining due to increases in inflation, expected rises in interest rates and geo political risk involving Ukraine.
C) institutional investors yet to take a significant position in a company that has proven reserves to generate $3 billion of free cash. Most likely waiting on audited reserves.
D) the final tranche of the underwriting is due for payment by end of feb, so institutions can buy from underwriters cheaper than buying in the market. Only 11 days before this finishes.

I can’t say when the price will rise to the 54 p price quoted by brokers, but the fundamentals justify that price and higher. This is an extraordinary opportunity, I invested further and holding for the long term.
Jimmy

Here is a pre well description of the geology of the Venus and graff exploration wells that are reported to be discoveries.
https://www.geoexpro.com/articles/2021/11/south-africa-poised-for-exploration-greatness

Jimmy