RE: Simon Thompson - Investorschronicle12 Jul 2023 16:20
And part 3Moreover, with rigs available in-country, the plan is to kick start a drilling programme for four wells as soon as possible, targeting high-graded prospects ranging from 8-18bn cubic feet (Bcf) of best estimate prospective resource potential (Chariot preliminary internal estimates). Each well will cost $3mn to drill and should provide an important read-through to the offshore prospect portfolio due to the reservoir fairways that extend across the areas.
Value accretive to shareholders
First gas production from the new onshore Moroccan licence could commence ahead of Anchois development cashflows, too. House broker Cenkos Securities estimates that a 10Bcf onshore prospect at an industrial gas price of $11-12 per million British thermal units could generate gas revenues of $100mn. Analysts at Auctus Advisors estimate that each onshore prospect under the new license has an unrisked value of 2p per share, assuming a similar value per barrel of oil equivalent as for Anchois and a 25 per cent working interest held by the Moroccan state company. The fundraise clearly makes strategic and commercial sense.
Furthermore, with Auctus risked valuation of $630mn (44p per share) for Anchois’ 2C contingent resources of 637Bcf three times the company’s existing share price, then a successful farm-out and financing of the flagship project should act as a major share price catalyst. Both broking houses have a 60p per share core net asset value valuation. The open offer is worth taking up and the shares, which are marginally below the offer price in my last article, continue to rate a buy.