Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Good reminder, thank you BDC.
Intresting on re-listening to that and reminding fully funded to FEED, wonder what the "We are going to be smart about the funding" of the project will entail?
But the reaffirmation about not reducing from core company value/worth is of importance (obviously after the recent significant share dilutions to date).
I think FEED completion looks to be the next RNS as JMW confirms gas sales is "signed" and not just an MOU?
NOTE: A memorandum of understanding (MoU) is a type of agreement between two (bilateral) or more (multilateral) parties. It expresses a convergence of will between the parties, indicating an intended common line of action.It is often used either in cases where parties do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement. It is a more formal alternative to a gentlemen's agreement.
Wiki definition
The project looks good, he also reinforces that the infrastructure is simple and been done many times before.....so maybe we will get FEED completed 2022 as initially hope?
Rgds Sft
The potential for CHARs gas development in Morocco are VERY significant as has been reinforced by the quality posts made by Jimmy, Scott, BDC and others.
Parking the addtional work with their ongoing Renewables and Hydrogen projects (of real importance but requiring addtional investments that are not there presently);
1. What do posters think will be the next RNS that we can expect regarding the "the project": FEED completion, farm in partner or signing off a gas supply contract?
As members have identified plant conversions to gas would take some time.
It's looking very interesting with lots of opportunities bot short term and medium/long (Anchois 20 years supply). I would be hoping that at the very least clarity on a time line time on development of Anchois is needed, but appreciate FEED needs to be confirmed completed.
2. I also ask does any one know how long it takes to build a shore based gas CPF as required for Anchois. Only know a bit about Bacton (Norfolk) but that caters for a lot larger supply and 4 separate companys.
Rgds Sft
Had to check in at short tracker to see if any vultures were having a circling: results 0.0% shorts
That it remains a 0% gives some additional confidence.
Although caveat: "We no longer track disclosures after they drop below 0.5%. It is possible that the manager still holds a short position even if we are showing it as zero"
https://www.shorttracker.co.uk/company/GG00B2R9PM06/
Intresting info:
https://www.shorttracker.co.uk/company/GB00BMBVGQ36/
Why?
Rgds Sft
Good find and post LB (and supporting post Jim).
If you look at ALL the fundamentals that support and underpin this Anchois-1 /2 project the current SP is ludicrous and completely baffling.
I would love to speak to a professional broker within a large energy investment company as to what is their view just to understand what are the investment thresholds /triggers on WHEN they do invest in such companies. Wish I new one to talk with on when this project is suitably derisked from such an point of view.
Does any one out there have ANY such contacts in the "City"
Rgds Sft
A good read is: final results report issued June 22
https://www.chariotenergygroup.com/wp-content/uploads/2022/06/Chariot-2021-Final-Results-Final-22.06.22.pdf
Technical Director’s Review of Operations
Transitional Gas Overview: (ref page 10 onwards)
Extract page 11
" Activity for the remainder of 2022 will include FEED engineering on all aspects of the development, including drilling and completion, subsea production systems, offshore flowline and umbilical, onshore gas processing plant and the onshore export pipeline..."
(Page 12) Gas Market:
Domestic markets in Morocco offer attractive gas prices to both the industrial and power markets; the current pre?drill economic model is supported by audited 2C 361Bcf estimate base case resource, with 70mmscf per day potential at US$8-15 per mcf to power and industry.
In October 2021, Chariot signed a gas sales agreement with a leading international energy group for gas offtake
NOTE: Do we know who that is, I keep forgetting about this comment?
"...The MoU will underpin the development as part of a long-term partnership, which offers an important opportunity to sell surplus gas above domestic requirements into the European market, utilising the connection of the Maghreb-Europe (GME), which provides direct access to Europe via Spain."
Best rgds Sft
BetamaX or VHS......IT'S a engery change like wood to coal to oil..change and one will be right....the alternative is what.
Personally is does not matter.....over population wins, untill China decides depopulation through biology is the way forward.....a covid type has given them the future path.
Homosapian dedicated...perfect.
)-:
Rgds sft
Thank you BDC.
I just can not shake my concerns over going it alone, and would welcome the assurance that an experienced operator would provide.
As you point out they have already partnered with Total Eren and see a similar fit (TE) for developing Lixus and Rissana as the ideal.
Time will tell.
Best rgds Sft
Hi BDC, thank you for taking the time to clarify.
Greatly appreciated.
In your opinion (or others) how important is having such agreement(s) in place in relation to getting a farm in partner?
My thought process was without having confirmed what your selling for, it would impact such? I am guessing that the like of TotalEnergies may want an input in such dicussions and signed / confirmed assurances.
I have an understanding of FEED, FID sanction but am trying to have a clearer understanding of other factors, where they fit in with regards to importance and time line of a project development
Note: I appreciate that there is a break even build cost and an operating costs that would be the baseline.
Also I would like to ask how important do you think it is for Chariot to get a farm in partner onboard?
As you have probabley picked up from my posts I think it is very important, due to the concerns I have posted before.....especially further share dilution or unknown creditor deals.
Again thanks for the replies. It's good to get dialogue (Jimmy's been very informative) and corrections to any errors made.
Best rgds Sft
Hi DCB, maybe I am if you or Fernan can help me out has a gas contract been signed off? I do not think the current MoU covers it?
I was on the understanding that the supply price was to be formalised.
Please advise.
Kind regards Sft
Hi HD,
The report info below was posted by Fernan in September I do not have a link for the report so I do not know the source.
All that Chariot HAVE stated as per the Sept interim issued report
https://www.chariotenergygroup.com/investor-centre/financial-reports/
Extract: "Transitional Gas:
We are now developing a significant project which has 1.4 Tcf in 2C plus 2U total recoverable resources at
Anchois and our team is fully focused on the FEED elements of the development plan, working alongside
Schlumberger and Subsea 7 who we appointed in June. With Societe Generale leading the project financing, a Tie-In agreement signed with OHNYM post-period end providing access to the major Maghreb Europe Gas pipeline, ongoing offtake AND strategic partnering *DISCUSSIONS and our Environmental and Social Impact Assessment underway, we are looking to reach FID as soon as possible to start generating material cash
flows thereafter."
"Material upside:.........We are committed to developing and realising the value of this gas field and moving it into production to help meet the growing demand within Morocco’s domestic market as well as *POTENTIALLY supplying surplus gas to Europe.
*Note: indicates they do not know yet i.e. "the contract"
I also note there is no written comment that FEED is on track for completion in 2022
AS has been proven (suprise fund raise) we do not know which way the BoD will go.
As said before the fundraising and BoD share allocation has resulted in a 50.5 % (according to Simpley Wall St) share dilution in a year.
2.5 month to end of year, we can only sit, wait and hope whomever is selling out (SP has again been heading down further) is wrong and there is no unwarranted surprises.
Rgds Sft
Hey Fernan,
I think you may recognise the below as it is from your post in September (-:
Anchois economic model. Angus research report
Excerpts from Auctus advisors´ report:
"Financing: The key steps to funding the project include the securing of gas sales contract (see above), debt funding (Reserves Based Lending) and equity funding. 70% of the project cost to first gas is likely to be funded with debt (~US$245 mm). Société Générale has been appointed as lead bank with the potential participation of Moroccan banks. The balance of the cost of the project is likely to be funded by a combination of pre-pay and industry participants. Given the strategic nature of natural gas, the very strong economics of the project and very large running room with regards to the resources volumes, we have assumed that the company would secure a farm-in partner, where a stake (we have assumed 25% WI) in the company’s licences would be sold in return for a carry and a refund of past costs (~US$40 mm). The overall net equity funding exposure of Chariot post farm-out and pre carry and past costs refund is only US$55 mm. In 2019 and for a project with smaller resources (410 bcf for IOG compared to 637 bcf for Anchois) and lower gas prices at the time, IOG was able to sell 50% of its UK SNS gas development to CalEnergy (Warren Buffet) for £40 mm in cash plus a net carry of up to £125 mm. Given the strength of the economics of the Anchois, we believe Chariot should be able to attract a 25% farm-in partner on terms sufficient to reduce its net equity exposure to zero."
"We are forecasting 70 mmcf/d gross production at Anchois from 2025 increasing to 100 mmcf/d in 2027. Fiscal terms in Morocco consist of 3.5% royalty, and 31% corporation tax but there is a 10 year corporation tax holiday from start of production. "
"With heavy fuel oil being the main substitute for gas, domestic Moroccan gas prices are very high. We note that SDX Energy’s gas realizations are ~US$11-12/mcf in Morocco. "
It was a good find/post, remains VERY valid and still all are unanswered or confirmed.
Kind rgds Sft
Hi Fernan,
First have a read of:
Gas Market MOU Signed in Morocco
Tue, 2nd Mar 2021 07:00
RNS Number : 7439Q
Chariot Oil & Gas Ld
02 March 2021
"The MOU relates to the Ministry's support of Chariot and ONHYM's Anchois Gas Development project as a POTENTIAL provider of significant gas to the Moroccan gas market........."
Simpley put Fernan: What is the price that gas is to be sold to the Moroccan Gov?
We still need a confirmed and signed contract detailing price, minimum supply deliverables yearly and daily, surplus sell on etc etc
I would think these play quite an important position when considering the financials: investment vs return vs timelines
Any thoughts ?
Kind Rgds Sft
Hi KB,
If we look at CHARs timeline FEED was reported to be completed 22; and it October now so 2.5 months left.
It will be a good indicator on management to see if that timeline is adhered to.
I am expecting to see some significant RNS's comming in the remaining time available.
I wrote to CHAR and it was confirmed there is no intent for Hydrogen production on the back of the gas project in Morroco: better financials from straight sale of gas. They were a bit vague on making the CPF totally powered from renewable energy. It is my opinion that as they are promoting their renewable path in particular mining, its not a good advert that the plant is not carbon neutral. There was (before Ukraine and accoring to Andrew Austin in Kistos) a financial benefit in selling such carbon neutral gas I.e. at a higher premium. So if they can not, it may be down to cost (and existing infrastructure) of developing a NEW CPF. I can imagine its not any cheap investment to get a plant to run totally green. So it's something for expansion once they are generating revenue and expand the field?
The next 2.5 months will be intresting and will see if management can meet their stated timelines or start giving out excuses.
I personally belive that they are spinning a lot of plates to get this moving forward very quickly.
And again, if they get publish the signed "contract" and (fingers still crossed) operator farm confirmed the market will react VERY positively. Adversely if there is no operator farm in: look out as I do not think the market has much faith in the BODs.
I am sure the BoDs will get a farm in as they can expand other blocks under their own terms later.
The ideal would be that some one like Total want in the farm in to partner on BOTH Lixus AND the undrilled RISSANA but CHAR are holding back (pure speculation of course) to keep control and future options open.
Lots of variables out there and the market will react accordingly to the decisions our BOD make.
One thing I do think is AP has plenty of negotiation experience from a tough mining back ground, I just hope he is not going to turn us small RT investors over during the journey. Time will tell...2.5 months to be exact.
GLA
rgds Sft
Hey KB,
I just can't see any approach without knowing what the Moroccan Gov deal will be. Everything (imo) hangs on that, no third party can step in with out getting that signed off.
What intrigues me is it how long signing off is taking?
Know one can balance the books without it?
Re the burn rate, was with RKH for a good while and the terrible deal that the BoDs signed into with PMO after reciving 250mil farm in meant RKH nearly paid back that in FEED costs back to PMO to complete FEED! PMO fleeced them and then went bankrupt due to other debt (and the a significant part of that debt got sold onto a Hong Kong based company called ARCM) when PoO collapsed. Parts of PMO debt got sold on to a company that helped bring it down.
https://www.reuters.com/article/uk-britain-shortselling-fine-idUKKBN26Z1AZ
Not ARCM (sharks are sharks) fault but PMO management fiscal control..and fall in oil of course. The Falkland oil is still in the ground.
This is gas hence my move across but the BODs need to get it right.
I respect that AP raised the cash to get past FEED which on the "face" of it puts us in a strong position for negotiations...but as above...why is the contract with Morocco taking so long? and remember AP got a bargin deal at 18p...would have cost more if it was after the issue of the (again) delayed CPR.
So trust is thin on the ground and (again imo) any ii's want to see the contract and a mature and experienced operator in the mix as well???
Without an operator who knows what finance deal AP could do...more dilution or a bond, as I said before his mining history and what financing he has done plus the above may be route cause on answering our "why"
@Builder, true.
Rgds Sft
Hi KB,
None the less the fundamental buy/sells are not "ideal"
No of Trades 89
Vol Sold 1,192,282
Vol Bought 642,166
I have no idea what is going on with this share, other than ii reducing their exposure in turbulent overall UK stock market. As we have just completed a fund raise it should not be that? Again just yet???but remember consider how much free cash vs expenditure vs time does CHAR actually have: 1 year?
I assume it was SocGen set and organised the last set of funding and set the raise at 18p, would have thought they could (SHOULD HAVE) have set it at a significantly higher price than 18p post drilling conformations, but before the long awaited (delayed???) CPR. Who benefited from 18p a share as a raise price.
As you can see I am a bit of a pessimist with regards to AIM directors or maybe snr managers in general (Tony Durrent PMO and Sam Moody Rockhopper) who are on $500k+ salaries, especially when it leads to very significant share dilutions.
It looks like this sp stagnation could continue as (imo) there going to be little hope of a farm in (if the HOPEFULLY go that way! figures crossed) before completion of FEED.
ALTHOUGH
What COULD give significant hope is an RNS confirming the contract with the Moroccan Gov on supply details be issues before hand, which MAY THEN allow a prospective partner to step forward (i have fingers crossed one does) before FEED completion with a letter of intent? As FEED with a experienced project development partner can be calculated relatively closely.
PATIENCE is the word of the moment.
HOLD FAST bosun
Rgds Sft