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Hopefully Duncan has found another winner...
"In securing the Loukos licence, we have continued to build on our unique position within a basin-scale opportunity and we are committed to developing this asset as quickly as possible."
I think todays RNS is good news - great resource potential and a positive step extrapolating tangible value that s drawn from the deep relationships we are told the company has in this area - all good there.
I remain here until Anchios delivery at a minimum, but the "we are committed to developing this asset as quickly as possible" comment just sticks in my craw - the glacier-like speed development at Anchios being our guide as to likely progress - as Chariots go, this one is not a fast mover!
This wasn’t the “next news” that we wanted.
Anchois is the only real next news that we need.
I think the market will shrug its shoulders at this amazing RNS.
Henry, I have read back on your history and together with Surfit Char have yet to prove either of you wrong.
I can see a few sell offs this morning as patience is wearing is thin.
6% man did not have the impact a lot of us was expecting.
New presentation on Char site by Duncan Wallace
https://stream.brrmedia.co.uk/broadcast/64bfd25bbd4f8d76ddc59eb9
It is positive licence news which suggests the govt and Chariot are on the same path which bodes well for Anchois. I suspect once the development funding is secured the licence will be issued
It all depends how quickly they drill and how much the find.
If the investment needed for this new development is much less then anchois might take even longer to complete since they will spend more on 3d etc..... Positive would be that we have cash flow. So the quicker they get on with these drills the better
Personally think Chariot are bang on with this easily accessible licence and the potential it offers.
It can be drilled, evaluated, appraisal drilling and development can be achieved is as little as 1/10th the time and for as little as 1/5th of offshore.
They have clearly been offered this on a plate and seem to have done a decent amount of due diligence on the licence and related, available information to establish this as a fantastic "infill" to the highly significant offshore discoveries.
I think it is really on the money, as any reasonable success will help to get the domestic market closer to saturation, and leave more of Anchois to potentially go to export at much greater prices.
So try and double up on the bigger picture, along with infilling whilst they glue the far more significant longer needs & leads of Anchois.
Hopefully all will come good to generate a perfect storm !!!!!!!
Add to that, it will provide A LOT of near term drilling, results, analysis, and hopefully additional discovery and CPR news flow, which if successful will really help to get Char MC/SP moving instead of sitting in the tight range it has been in since Anchois.
It will help draw in a lot more attention, which should help when they bring in updates on Anchois too.
It almost indicates that they are now rather keen at last) for a revenue stream of their own?🤔
Is this new and "suprise" offer seperate to current negotiations.
Having squeezed the lemon(s) fully dry, I wonder if the banks or farm in partners (more likely a bank, which tells a story) have demanded some sort of financial and project ring fencing in what they are buying into? and AP needs spending money for his transitional 🤫magic trick(s)?
GLA maybe it's the next RNS
Rgds Sft
A new research note from Cenkos today. The firm state: “The combination of significant near-term newsflow and upside to our target price makes for an attractive proposition – BUY”. Cenkos have increased their TP to 65p (from 60p), a c4.3x the current SP.
https://twitter.com/chariot_energy/status/1686268288228012034?s=61&t=n_2hkWpElgdgvzOpn_RbHg
Surfit, IF “the banks” (or anyone else for that matter) lend Chariot money for Anchois there will be very strict guidance in the contract as to what that money can be used for. Unauthorised use of funding (if that what you are suggesting) would/could result in funding being withdrawn, along with severe penalties.
Banks will also only be “lending money” for Anchois, on the basis of due diligence on Anchois. IMHO
Hey Whimax, fully agree.
I specifically asked this question (BUT regarding gas profits I admit) in a QnA that they held a year ago. AP's reply was vague.
But it does indicate that there may have been some tighter controls applied than managament hoped for?
Which is a very good thing of course.
It's still going to be VERY intresting to see what deals will be signed eventually farm in, banks, bonds or combination of both as before I genuine hope its a large operator that comes in, I think the market will react a LOT more favorable to that than banks and Chariot running / operating it themselves (imo).
Rgds Sft
Possible Surfit, but I think unlikely the bank would require Chariot to obtain a new licence which may or may not come into production before the one the funding is actually for. If the Bank are lending money for a project of this size, it is on the merit/basis of that asset, and on their assumption that it’s a stand alone safe investments.
Also, re market reaction, the market will react when the deal is signed (in whatever format that will be) and the uncertainty of it NOT being signed is removed. At the moment there is still uncertainty, and, as discussed before, institutional investors will really only get involved when there is zero risk, even if that means waiting till SP has doubled. As long as they know it will double again, they don’t care.
The 3-4 wells that Chariot will be drilling in Loukos will also de-risk some of the high-probability, but as yet untested resources that Chariot have identified within the larger Lixus licence block.
Which ties in with my theory that this raise was necessary in order for Chariot to ultimately keep a larger stake of Lixus.
If chariot drill Loukos this year and don't announce a partnership on Lixus prior – then I'd say this theory would be pretty solid at that point.
https://stream.brrmedia.co.uk/broadcast/64bfd25bbd4f8d76ddc59eb9
BDC, I don’t think Chariot will, or can afford to either wait that long, OR take that chance. More likely the signing of the Farm Out has been delayed slightly, until this license was awarded, as the 3D has more than likely validated, even further, Anchois/Lixus.
Whimax,
We'll see.
If they were to announce mobilization of onshore rigs next month for subsequent drilling the month after - as an investor - would you be prepared to wait a bit longer Re: Anchois partner news?
I think they're going to move very quickly on Loukos. They appear to have been studying the data on it for quite a long time and there are onshore rigs currently available in Morocco.
Hi Wimax, are you thinking the onshore side will be bundled in to the whole package? In what ever form that will be?
I am leaning to a seperate play (onshore) made by Chariot, but obviously they need the onshore processing plant to be built and operating.
Reasoning is why raise for drilling costs if it was to be incorporated?
Rgds Sft
Surfit,
I've been thinking about that and for 70bcf, I think they could probably build their own smaller onshore processing plant.
If they were to get $40-$50 million in back costs from an Anchois farm-in, that would probably be enough for 4 producing wells and a small processing plant onshore.
Hi BDC.
I think my concern would be, what if they drill and miss? This section from this mornings RNS could be construed as both positive and negative during and on shore drilling campaign imho.
As a layman, if the new license is “geologically similar to Anchois” and the first 2 onshore drills “miss” what does that do to farm out negotiations?
“overlooked, shallow, conventional gas play, which has already produced gas in other areas onshore Morocco, and which is geologically similar to Chariot's offshore projects including the adjacent Anchois gas discovery”
Surfit, no, not really, more that the 3D already shot on the new license would/could simply add even more validation and confidence to potential Anchois/Lixus Parners. Again, in the paragraph I posted from the RNS in response to BDC, this adds validation because the new licence is “geographically similar” to Anchois. Might be worth a an extra 5% retained by Chariot on a Farm Out? Just guessing there tho.
Whimax,
Yes, it's a risk. But the possible/probable upside probably outweights the downside by a significant margin. Anchois could be 7Tcf, which is big.
Loukos is in the same basin as Anchois, has the same geology and is at the same depth.
And let's not forget, Anchois was also an 'overlooked' asset when Chariot first took control of it.
If the onshore drilling of Loukos were to be a failure, then I guess Chariot will have to do a deal on Anchois as it is now. 0.7-1Tcf.
Page 5 of the presentation reports a large prospect updip from the LNB 1 well.
That well encountered 300 meters of reservoir with elevated gas readings.
The average flow rate in the onshore rhab basin is 1.1 mmcf per meter.
Very exciting.
Jimmy
Yeah, I think we’re in agreement. It’s risk v reward as always.
Because of the Geographical Similarities, would a “miss” derail or be more detrimental to existing negotiations on Farm Out, then a “hit” would be viewed positively on future negotiations. Bird in the hand, all that lol.
Also, good luck telling KB and Smyth that the SP might go down (perceived delay) before it goes up. Can you imagine the number of “jam tomorrow”, “happy clapper”, “JD and Gender Jokes” and “soon/imminent” posts we’ll have to troll through before we get Farm Out news 🥴