Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Just retweeted by Chariot.
https://twitter.com/chariot_energy/status/1679136440310026243?s=61&t=n_2hkWpElgdgvzOpn_RbHg
Chariot (CHAR:15.3p), an African-focused energy group developing and delivering transitional energy projects, has raised $15mn through an oversubscribed placing of new shares at 14p. The goal is to fund a drill programme on a new onshore Moroccan licence and for working capital. On the 11 July 2023 record date, existing shareholders are entitled to participate in a one-for-58 open offer that will raise an additional $3mn. I would certainly take up your allocations by the 31 July deadline.
As I noted a fortnight ago, the directors are in the final stages of selecting a farm-out partner for their flagship Anchois gas development project in Morocco. I can now reveal that an announcement will be made shortly, which could materially provide the financing of the development capital to first gas and significantly reduce the risk of dilution to shareholders. I can also reveal that investment bank Societe Generale is in ongoing discussions with a consortium of European and Moroccan banks which have “indicated their appetite to provide debt finance.“
Starbanker1, I’m not sure I understand either the rationale or the meaning behind your post?
Why would AP want to give someone/an entity 9% of Chariot at 14p, dilute his own holding by that amount, then want to accept/force through a lowball offer for the business?
Apologies if I’m missing something obvious, but that seems nonsensical. AP is many things, but stupid ain’t one of them, and neither is he in the habit of accepting lowball offers (something which we have actually found out to our cost in previous farm-out negotiations).
Also a possibility that granting of the on-shore licence may have been dependent on ‘proof of funding’ to progress development immediately. The numbers kind of fit $3m x 4 wells plus planning and peripherals?
Farm-out has/is taking longer than hoped (possibly due to farminees playing hard ball on up front payment as mentioned last night) so proof of funds maybe had to be dealt with this way.
Bit painful, but that’s AIM for you. If it ultimately bring productivity forward, I won’t argue with it.
I don’t believe the “new onshore opportunity” is to be purchased. As below, from the RNS, it will be a license award (by the Moroccan Govt). Yes, there will be drilling costs (I don’t know how much it costs to drill on land in this area, or depths etc) which Chariot may or may not end up going it alone on, and also development costs, and some other “commitments” but we’re not buying it.
“The net proceeds of the Fundraise will be used as follows:”
For near term onshore drilling and development planning on a new onshore Moroccan Licence, expected to be awarded imminently;”
Agreed redeyemines
“ Our overriding objective remains to build further value for shareholders and we are therefore looking to raise funds for a new licence onshore Morocco as we continue to expand our strategic footprint in-country. This licence will give Chariot near-term drilling opportunities with the potential to accelerate Chariot's timeframe to first gas. The acreage shares geological similarities with our offshore assets so we benefit from unique insights on existing 3D seismic and on-block well data and have already high graded targets for a first phase drilling campaign.”
With respect Trans, “No” is pretty much the only answer that they could give that wouldn’t been viewed as inside information. If they said yes, that’s market sensitive and would land someone in deep trouble.
I’m not doubting your integrity, but even if the real answer was “yes” they’d still have to say “no” lol.
Hi Surfit
I agree, I think we would all like to see some numbers around the renewables/hydrogen parts of the business, but as you rightly said in one of your earlier posts, at least some of the proceeds from any Farm Out will undoubtedly be filtered through to progress those other 2 “pillars”.
I feel there is a ‘running order’ tho, in that until we/the BoD can quantify what proceeds are forthcoming from the farm out, it’s very difficult to allocate portions of it elsewhere to other areas of the business, meaning it is impossible to quantify what further funding is required (and available) to make up balance.
I think we need to be patient on the gas side, in order to then budget (and negotiate) correctly on the rest.
Regards
Morning Surfit
You said “ I am hoping he as learnt a lot but he is has changed ract on loans and used share raising as the way to get us over the line thus significantly diluting the SP.
Will he use the same time of fundraising for developing the energy elephant in Africa.”
Let me start by saying I know nothing about the Petra or it’s finances, but what I would say is, “ “dilution” although often much maligned and not popular with share holders, is, more often than not, the safest (if not the only) route for a company in exploration/development stage.
Let’s say for example Chariot had (even managed) managed to persuade someone to fund/loan Anchois exploration and development 2-3 years ago, with the expectation that 1st production would be mid 2025? How much collateral would be required to secure the loan, at what interest rate would it have been agreed at, how would interest be paid for, but MOST importantly, what would happen if timescales slipped by a year (due to something like another Covid) and the loan couldn’t be repaid on time? What happens to the asset? At what price, and how big a dilution is then required to fund/pay off the loan (even if someone’s willing to invest)?
I’ve seen plenty companies take out loans, see timelines slip, share prices tank, and then have to resort to CLN’s aka Death Spiral Funding to stay afloat.
I appreciate dilution isn’t pleasant, but the alternatives can be catastrophic imo.
Hi Surfit.
I take your point(s) but isn’t the “lack of knowledge and expertise” where Total Eren (at least partly) come in, and why we partnered with them on both projects?
Re the siphoning off of funds to other areas of the business, yes, I expect that will be the case to some extent, but unless you/we are expecting a one off divi from Farm Out funds (which I’m not), that seems the natural and sensible use for those funds, ASSUMING no further funds are required to bring gas into production. Or am I missing something?
Regards
Whimax
We’ll have to agree to disagree there Surfit.
For me, the focus for 99% of investors at this point is the gas, and as you rightly say, although we’re not quite out of the woods in respect, I think it’s a ‘stick on’ that funding/farm out/FID will be sorted very soon.
AP said that the gas is the focus for the next 6 months, and that’s the catalyst for new money to come in to this imo.
The rest will follow in due course, but it’s not what’s deterring volume.
Both statements are equally true and correct, and the time line hasn’t changed since either or this statements were made.
Your infatuation with the micro movements in the SP is ridiculous. When we get the news we are expecting, the price will change. There is nothing you, me or the BoD can do about it until they hit one of the milestones they have set out and announce it.
If the Farm Out news is announced and the price doubles to 30p, will you sell?
I won’t, because the risk is gone and it’s a waiting game again, until it either doubles again on the next milestone announcement, or it drifts back to mid 20’s as people get bored and chase rainbows elsewhere for a while. I have targets, but they’re all significantly higher than 30p.
I dare say you will start another countdown tho, and keep us posted on the SP movements every hour or 2 in the meantime.
Anyway. GL
Yes, he is wrong, because he says “ Gas project is the only near term cash generator and that is aprox 2 years from realising production and cash flow.”
That’s simply not true. A Farm Out, which we’ve just been told is pretty close, is an obvious “cash generator”.