Lixus development scenario Excellent discussion and hopefully will start to lift our gloom. We close the week blue with still so much to come. We must try and see the positives here…Nothing has changed according to the last email I received from Celicourt a few days ago, everyone involved with the company is working extremely hard to actualise the clear strategy set out … The main and overriding difference between Chariot and how and when they release news compared to many other AIM companies is Chariot will NOT ( never have) release news stating terms or HOA, agreed just waiting final ratification and sign offs, .etc… They only release the news when full and binding legal work is complete and partnering is ratified by law. ( in the past anyway) I think if they updated with a positive update, the market would get very excited, however if there are still legalities to get through , we will have to be patient and believe it is all coming together As per the strategy. The complexities of what is involved here ( far more than an exploration drill partnering process) will take time. This is complex, it will involve multiple partners, equity outlets, equipment selection, in the whole dynamic of the UP to MID to DOWN stream E & P operation chain… We are all hoping the next red RNS dot brings shareholders long overdue and much deserved positive news. I have wound my neck in ( for the time being anyway ) from being over critical Of the lack of news and progress and will give the company further time to achieve what will hopefully be a company changing outcome in all the discussions that are going on right now .
Lixus development scenario Excellent discussion re the field metrics, so thanks PM (great find on the conference presentation) and Spitfire for your input here. My reading of Larry’s chat with Malcy last month was that terms for a deal have already been agreed but that it’s now just a waiting game for the deal to be ratified by the farminee. Larry mentioned (if my memory is correct) that previous farm-ins have taken between 8 weeks and 8 months to be completed at which time they could be announced to the market, so my feeling is that we’re now in a similar such period and it’s just a waiting game until a formal and hopefully very positive announcement can be made. The $204 annual revenue (with significant running room) for 10 yrs is potentially huge especially as the market cap of Chariot remains a paltry £12M at the current sp.
Lixus development scenario So, conservatively, if I read your figures correctly, the company is estimating an outlay on the project of $300 million over ten years. The returns being $2 billion over that 10 year period. That is a compelling economic case, if it is correct. Larry should have no trouble getting a partner/financing if he can demonstrate the validity of thos figures. My shareholding is just in profit, I don’t hold many, it is the ‘lottery ticket’ of my portfolio. Good luck.
Lixus development scenario You’re correct Spitfire and the numbers are mouth watering especially considering that you have taken conservative estimates. Just need that RNS to come in and improve sentiment, The majority of the information is in the presentation below so you’re spot on with your analysis. The point in regards to confidentially agreements is very important IMO, this will explain the 70 “… it (the project) is technically feasible” 7:22 “… can be developed using off the shelf technology” 7:35 “… excellent gas prices within the region” 7:40 “… commercially attractive project” 7:55 “… the upstream partnering process which is progressing very well” 89 “… we’ve got discussions going on with 2 mid-stream, down-stream strategic alliances” 8:35 “… we have initiated discussions with finance providers” 9:21 “… the proven and probable is slightly more than 300bcf that has the capacity to deliver 70 mmscf/d for 10 years” 9:30 “… that generates $204m of revenue per annum” 9:40 “… the first 10 years is tax free”
Lixus development scenario Hi, Those development figures and the annual income from a base case production scenario from the proven reserves only in Anchois , with out any additional running room of the additional low risk resources in the satellites and other targets in the Lixus licence, ( of which there is an additional 1.6 TCF or X 4 proven gas reserves in Anchois A and B sands. Those figures are either in presentations or out of the mouth of our CEO in various interviews over the last 6 months, which are in the public domain. I have probably been conservative if anything on best case annual income if all reserves prove up to resources and they are developed to tie in … The very least case development scenario without any Running room of additional feed , is 10 years and $204 mm per annum based on current and forward index pricing into the west African supply chain . What makes you think Chariot would not be able to raise the funding from the consortia it is in discussions with and / or the financial sector ? I have a reasonable background in subsea development , costs are the lowest they have been in a long time, a billion dollar project 12 years ago , now has become a 400- 500 million project in the current drilling, subsea , template, manifold , tie in , pipeline to shore world.
Lixus development scenario Hi Spitfire, Are those economics your estimate or have you sourced them from a third party? If they are accurate a partner should be no problem, I wonder why none of the bigger operators were interested when the Moroccan authorities were touting the licence? The £8m or so in the bank wouldn’t pay for a round of drinks on a project of this size. The best we can hope for is a benevolent partner who gives us a token 10% non operating interest. IMHO
Lixus development scenario On the minimum case of scenario of proven reserves ( without any further of the probable resources being drilled in satellites and nearby tie ins. The tax free income per year, over 10 years well life, based on current gas pricing going into the Morocco Supply chain is circa $204 mm per annum . When you add in successful tie ins , satellites and other targets in Lixus , this could well increase to over $400-450 million per year over 20 to 25 years. Field development , Capex and opex, including all the downstream , is I am led to believe estimated at circa 250-300 million dollars over the lifetime of the field. It would be an off the shelf proven subsea development concept requiring no new whistles and bells. Those are the economics… Discuss…
Lixus development scenario My take and my take only… Chariot are going to take a sizeable chunk of the development of Lixus on themselves as the upstream operator of this licence. I think the hard work is going on re mid to downstream partnering. Complicated stuff going on behind the scenes. All IMHO. There is no way they can go to market ATM for cash for equity ,so I’m thinking there is going to be debt facility in place which will cover a big portion of the upstream costs… I think we will have an upstream partner but we will be operator. I think the big partnering will be mid to down stream… This was also hinted by bottomley when he discussed patterning on last few interviews, he heavily emphasised confidentiality agreements with mid and downstream consortiums ( 2 off) Again all IMHO Let’s discuss , there is a reason why the company is in radio silence, According to Celicourt , their IR outlet, everyone at the company are all working extremely hard on the strategy they have set out for Lixus and nothing has changed on this. If there had been a change of strategy they would have had to have RNSd this.
Lack of... EVERYTHING? No I haven’t had a response yet. I copied the email to the incorrect email address and it bounced. I’ll give it a couple of days for the others to respond, if there’s no response I’ll send another email copying him in. I always copy in email@example.com so he should have received all emails from me.
Lack of... EVERYTHING? PM, my bad, Yes you are correct with that email addy. Have you received his standard lip service reply ?
Lack of... EVERYTHING? Spitfire: Mantelme@celicourt.com I think this was a typo Spitfire, its actually firstname.lastname@example.org
Lack of... EVERYTHING? I agree with your points TM and that seller is a concern for me too but I’ve seen some decent sized buys recently as well. There was a buy of 624,000 on Tuesday, which is quite high compared to normal volumes. Lately it appears that there’s a 100,000 buyer too. I don’t know what to make of this and of the small trades of 4, 5, 9, 18, 22, 28, 39, etc shares but something seems to be going on. It may be an attempt to get rid of the weak holders, someone could be trying to accumulate or some other reason. Thanks Spitfire, I’ll copy Mark in to future emails but like you say the response will most likely be a waste of time. We’re both likely to be of the same opinion that pressure needs to be applied constantly to ensure that our views are taken on board. It does bother me that they don’t respond to me but as long as they fully understand my concerns and try to act upon them then I think I have succeeded. Without being able to give details, in late 2018 I was told that discussions took place at a senior level as a result of my emails to an individual. Spitfire, I agree with you that the next RNS could be a game changer one way or another. I think it will come soon though, I believe that we had an initial 12 month licence that started in April 2019 in Lixus that included: “… a technical programme of 3D seismic reprocessing and evaluation to access the additional exploration potential of Lixus. Chariot will also further evaluate the gas market, test development concepts through a feasibility study and seek strategic partnerships and alliances to progress towards a development of the Anchois discovery.” A decision needs to be made to extend this licence and the only matter left is to conclude the strategic partnerships. We should know the outcome by April IMO, lets hope it’s a positive one. The fact that LB mentioned the 2 consortiums in October and again in January is great news, it shows consistency and also tells us that these discussions are significant as they have been going on for a while. Hopefully it’s just the contracts that need to be finalised between all parties. I’m still cautious but the 121 Oil & Gas presentation has brought some optimism back
Lack of... EVERYTHING? Spitfire, be reassured, we will know either way 48 hours before the next RNS… just keep an eye on the share volume !!
Lack of... EVERYTHING? PM, just do what I do, keep resending exactly same email every single day at same time, until someone replies … Suggest you direct to Mark Antelme as well, he normally replies, although tbh, what he replies with is a waste of typing energy ! Mantelme@celicourt.com Can’t help thinking here, next RNS will be big one way or the other, when ever it actually comes.
Lack of... EVERYTHING? theoryman: Today, however even that changed to 200,000 I could try and take credit for that TM 🥴