Member Info for Surety

As bets go, Surfit. I don’t think your buy today is a bad one

The downside risk as you say is they go bust, but I think there will be another roll of the dice first FWIW. They have assets they can monetise, and power may boost the price enough when the funding comes in. It would give you time to get your money back on today’s investment even if they raise (last thing anyone wants - but in the context of your buy). So I think in the short term it’s fairly low risk - other than day to day fluctuations.

Conversely to the upside. They have to sort funding. In my view there are 3 options - 1. Back costs on Loukos are the obvious if they can farm it out. It also secures an income stream which removes the need to raise if economic. 2. Anchois to fid with Enog or a sale of more of Risanna. 3. funding for power gives them some kind of kickback or they monetise a stake in Etana . If they do get the Namibia licence - as long as the G&A is self sufficient and Anchois moving forward / Loukos starts producing the share price will start to build rapidly. Lot of ifs - but not impossible and if it directionally plays out that way then there is a lot of upside from today ..

IMHO

Be interesting to see what they have to say tomorrow am

IMHO

Short paragraph out from Cavendish this morning, basically paraphrased as 'now is the time to buy;

DYOR

Harry - in your last post (prior to the one below) you state Loukos wont happen anytime soon - but you seem to be therefore saying you think it will happen

I'm totally confused about what you're actually saying ?!?

How about you provide us with some detailed analysis or rationale to back up your thinking - like most others do on here - e.g. Surfit, Fernan, Jimmy, Ianfer, etc

DYOR

Ps I am assuming you have soc gen, and other corporate advisory on power in there..

JT : Other administrative expenses of US$8.7 million for the year ended 31 December 2023 are higher than the previous year's US$8.5 million due to employment costs from scaling up the team to progress the Anchois gas and Loukos developments, as well within the Transitional Power and Green Hydrogen teams.

Generously described as an 'Absolute shocker'

They need to get some form of income from Loukos, and Power - and dont need to raise because the next steps are then getting Loukos quickly to production and Anchois to FID (with a further payment if it's Energean). It's a disaster if they raise at 5p.. and obviously even worse below

DYOR

All,

Had a fairly brief look at their accounts for end Dec 2023 and the comments / associated forecasts made with these in June (RNS)where outgoings were assumed over a forecast period (May-Dec).

At that time they had $7.9m cash (this was after the $10m injection from Enog on farmeut completion) and were projecting outgoings in the forecast period of $25m, made up of :

Anchois $6.5m, but subject to recovery from partners (in part?), Loukos $6.7m, Power $3.6m, hydro $1.4m and Corporate $7.2m

In August they raised $9m, and that was added to a balance of $3.6m at the end of June - so they had spent about $4.2m of the forecast period in that window.

In the Interims they state they have taken some action on cost.

If you assume that they

Recover most of the Anchois Cost Overall as it's covered by Enog, leaving them with say $1-2m

Have spent $4.0m of the $6.7 on Loukos as they havent tested it, and drilling costs probably slightly under

Have reduced power costs with deferral costs to say $2-2.5m

Mainly deferred Hydrogen costs to Total, so say $0.5m

Reduced corporate by 30% to $5m

Total cash out would be $13.5m over the forecast period

On this basis, at the interims they had spent roughly $4.2m, leaving about $9.0m spend to go in 2024

If they had a balance of $12.6m (cash end June and raise completing August) it would have left them with 3.6m end December. Allowing for adjustment and further deferral its probably fair to say cash now is $3-5m

Given roughly 6 weeks ago they endorsed an ST article that said 'not in a distressed cash position' I am assuming they are at the higher end of the range, or were beginning Dec

If this is right they probably have enough to get to end March/end April

In that period they need to:

Farmout Loukos with back costs - maybe worth $5-8m

Agree FID with Energean - or sell something to them (more of Risanna) - maybe worth $15m

Recover costs from Power funding? Depending on how Chariot have structured the funding that they have been given to Etana some may be recoverable ?

The IC (ST) talk about the near term triggers as Loukos and Power Funding - with an smaller Anchois development very possible. Again - management have endorsed this...

All of this purely speculative (and a view) and totally IMHO. Thoughts and discussion very welcome

HC. When you say it’s not happening quickly - you obviously think it may happen. It’s implicit within the words you’ve used

If it may happen - then why not quickly?

Doesn’t make any sense ?!?

Hi both.

They appear to have gone to an African farm out forum and said OBA1 is low risk and also highlighted the overall exploration potential of Loukos following the remapping described briefly in the interims.

I suspect they think OBA1 is ‘low risk’ but inherent within that comment is the fact that risk exists.

Given recent history with A3 - and the broader credibility point, they can’t say that unless they genuinely believe it has potential - otherwise they are personally liable for misrepresentation

My money is that Loukos is viable, but following the remap it’s accepted a partner may need to drill further beyond OBA1 which feels like a ‘probably’ On those numbers Fernan with the farm in partner taking 35 to 45 percent and onhym holding 25 it feels viable given the likely low capital investment from the partner - with payback in 1-2 years.

Loukos and Anchois have to be the short term key to avoid another dilution.

DYOR

Fernan

Whilst different in scale, you have to believe that the same broadly logic applies to Loukos (except the international export).. which needs to be their 'reduced G&A' funding instrument

If they can get Loukos 'farmed out' and Enog fast tracking an initially smaller Anchois this starts to look different..

IMHO

JT - where was that, on the recorded Webinar? In the body - or the Q&A after?

MP0818 - been is this for a long time as well (2019) so have got used to not expecting anything quickly - although these things often surprise you…

Fully accept that from SQZ - and not expecting anything T/O wise until there is relative clarity over i) future taxation, and ii) the implications of the Finch ruling, unless it’s a highly speculative approach

I hope they dont (and trust they won’t) take a low ball offer, but I imagine in the £3.50+ range it would certainly open initial talks..

Always interested in DU’s perspective - so hence the question..

DYOR

Btw, DU - would be very interested in your personal view on SQZ acquiring JOG.

Hope the health is as good as it can be!

du - you are right. it looks like some form of overview of the serica statement that is due next week (as you point out)

https://*********************/events/sharesoc/signet-follow-up-meeting-on-serica-s-trading-update-sqz-4-february-2025/2594/6e1ff62f-b67d-451c-84ac-c268c678a4e1

Surfit, agree

They need to get both Anchois 2 and Loukos sorted - as they stated. If they are right and Loukos is just about testing (they surely can’t make a low risk statement to an African Farmout forum unless they believe it, and can back it up - coupled with a credible remap of the area).

In my opinion that’s all they should be worrying about right now. Everything else is jam! If they can achieve that this will start to move permanently northward..

As you say though… tick tock!!

IMHO

Notice that one has gone in for 4th Feb for Serica .. so expecting an update from JOG around that time. Their operational update was around end of Jan LY, so this broadly tallies timing wise

Any thoughts DU?

DYOR

Thanks JT, comparing it looks like just the last 3 paras which would make more sense re: Anchois..

Yep -Broadly same for me Surfit. I use the RNS, news feeds and the analysts broker notes (at least 3 or 4 to get an attempted balance)

I’m interested in if anyone has spotted a change to the Anchois info on the website - which they have clearly updated since A3 drill - specifically the quoted gas estimates. The Soc Gen comment caught my attention as it seemed current - I know they were v active pre Farmout.

Jimmy - any observations, or same as before - I know you tend to read these.

On Loukos, interesting that Vivo was signed just after OBA 1 ..

All,

Had a quick Look at the Anchois section of chariots website. They have updated this to show the A3 drilling outcome, if you scroll down the to the section headed ‘Anchois Gas Development Project’ inc the soc gen reference with financing being worked on. These all sound current (not historic). There is also a reference to ‘resources’ now standing at.. albeit against the A2 ratification.

They have either updated this so part of it is current, or they have updated the whole thing with what they believe..

How do other read this? In fairness, I hadn’t read this section before so it may be unchanged

Would be interested in a view

https://chariotenergygroup.com/operations/transitional-gas/

Loukos Onshore License – Morocco

Chariot Transitional Energy presented the Loukos Onshore license area in Northern Morocco, representing a near-term, low-risk and high reward appraisal opportunity. Operator Chariot has identified multiple drill-ready opportunities, which offer long-leads in existing inventory and rig availability in-country, along with competitive fiscal terms and license flexibility. These include the RJB-2 Re-Drill, OBA-1 Discovery Appraisal and Material Exploration opportunities.

Note comment on low risk OBA1, and the ‘material exploration opportunities’ which correlates to the previous interim statement I assume

According to Farmout Angel, the event housed 300 delegates (from where who knows..)

Before anyone jumps on this, I am not endorsing it.. just sharing the information in the public domain!!