Valuation Jimmy What other drills are due in near future to the E of chariot drill in Namibia ?
Valuation If the farm-out market improves then I think we will need to look closely at who is paying what for what % and where. There were some deals done in the last batch that published what % had been transferred but not for how much - not that I could track down. The other issue is the number of licences that need drilling in the near future in the frontier regions. I will be watching for how many ask for an extension in order to buy more time and how many are just handed back with a penalty payment. This will be the real test IMO as to whether companies are still in love with the idea of chasing elephants in these regions.
Valuation As much as I hate to admit it, it is now very clear (to me) that CHAR is just another dodgy AIM company. The management should explain the unusual trading volume before 1) fundraising 2) Morocco failure 2) Namibia failure… the management should explain why they decided to raise funds at 13p when the share price was at +20p… the management should explain why they are still keeping (and paying) staff when there are doing absolutely nothing!.. the management should explain what they are actively doing to resurrect this company… but we get nothing from CHAR management… I now believe they will continue to BS the market until the company dries out.
Valuation Good post Jimmy,but you left out one important consideration for where Chariot goes now. Simple.SACK BOTTOMLEY , A SPECIALIST IN FAILURE.
Valuation With a current market capitalization of £10 million , chariot now trades at below its year end cash balances for 2018, thereby valuing exploration assets at nil. What has gone wrong.? The entire corporate strategy has been based on success through the drill bit which was supposed to be financed by farm outs with a close to zero net cost to chariot for drilling. With a broad portfolio of high impact prospects the farms in would recycle cash invested in 3D each time a farm out occurred thereby avoiding equity dilution. In theory holding acreage in high potential basins at net nil cost would allow chariot to wait for others to drill first and derisk the area. Success would come with the drill bit. That’s the theory as to how it should have worked out. What actually happened, is that the stock market valued exploration assets at close to zero because the farm out market closed down effectively for five years due to volatile oil prices. Major oil companies have falling production levels, such as shell, and have been using cash to buy back shares instead of explore for oil. Rig rates declined by 66% and chariot used shareholder funds to drill high risk exploration because they could not recover past seismic costs and because license commitments forced them to drill or drop the licenses. It looks like the exploration market is recovering, as reported by Bloomberg to day as acreage is being taken up offshore west Africa. The chariot market capitalization is less than one fifth it’s seismic and other geological costs, so chariot is ripe to be taken over if only for its huge seismic data bases. Where to know. ? We need to understand why did Namibia fail and based on the acquired data from drilling is the rest of the acreage good and can it be farmed out with this data. Failure in Namibia occurred because either the oil was not generated in that area of the basin or top seal failed, possibly due to inversion. We simply do not know, and shareholders need to be told. At the moment the market has assumed the worst and gives chariot nil value for exploration. What was missing from the strategy was the asset backing and cash flow to avoid equity dilution for exploration when the farm out market died. Either relinquish acreage or accept poor farm outs with leverage to upside success, such as was done in Morocco. The mistake chariot made was when it had a market capitalization of 200 million it should have bought production cash flow which would cover basic overhead costs and simply wait out bad exploration farm out markets. With a market capitalization of 10 million chariot now has no option but to wait for someone else to find oil nearby, could happen in any of its basins. Chariot needs to reconsider if it should hold such high per cent age of licenses and instead hold smaller percentages in a larger portfolio to increase drilling chance of success overall rather than be dependent on a well or two every five or six years. In the meantime they should continue to farm out to recover past costs in what is a recovering farm out market. Do not drill as operator again as geologists can fall in love with prospects and small companies need third party validation by farming out. Jimmy
Larry Bottomley as CEO It’s looking more and more like CHAR is just another aim gravy train. Just a load of rip off merchants taking nice salaries for sweet football association. TP
Larry Bottomley as CEO Why hasn’t this “Specialist in Failure” been sacked yet?
Damn Deramping Traders …manipulating price down to 2.25p, 25% below YE18 estimated cash - so tired of them! See ya all in January and good luck with your trading strategies - not! Over & Out.
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Larry Bottomley as CEO Correct PM, six years of misery… the worst thing is that - as confirmed during our very recent conference call - it is business as usual at CHAR HQ!!
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Brazil – 57 blocks have exploratory periods expiring in 2019 In Barreirinhas Chariot is the only operator having secured an extension until 2021. All other operators have exploratory periods expiring in November 2019. With 11 deepwater commitment wells to be drilled in the basin it will be worth watching out contracting for new drilling rigs in blocks of the Barreirinhas. BG, acquired by Shell, paid about US$200 million in signing bonuses and committed to investments of about US$700 million to drill seven wells in the Barreirinhas Basin. brazcha.png805x803 528 KB
Question to this forum HOT, the CHAR RNS after the duster was very downbeat when it came to the geological bits, so I am back to where I was several years ago; assigned value to Namibian assets is zero. Morocco is interesting, it’s a new idea in an emerging region, so it might appeal to someone but we need to wait for the CPR. Brazil looks like a potential nightmare from the geopolitical/economic standpoint IMO, never mind the geological as well. The best hope there, again IMO, is that someone who missed the boat will look at what CHAR paid for the licence and data; and given the very high risk environment still sees value in acquiring it. Who would want both bits? Maybe an old style asset stripper would buy both, keep the one they want and sell on the other…
Question to this forum Don’t forget Mauritania… If I were a potential buyer the option to buy back in for 10-20% of Block C-19 in partnership with Shell might just be the most attractive thing we have to offer.
Question to this forum TM, I guess you are referring to Namibia… don’t you see any value in Brazil or Morocco?