Chariot Oil & Gas
Today’s AGM statement from Chariot contains little new news but it does provide a useful analysis of quite how important the securing of the Lixus offshore licence in Morocco could be for the company. After all this is a significant gas discovery close to one of the highest priced, strongly growing gas markets worldwide and substantially re-balances the portfolio without taking away the upside.
The May CPR gives over 1 TCF of gas to the Anchois discovery and its satellites which should deliver ‘strong returns and significant cash flow’. With 75% of the asset Chariot are in a strong position and will partner up on the deal and data rooms are open and the level of interest is pleasing. Indeed, unlike farming-out a well or even a drilling campaign this exposure to the fast-growing Moroccan domestic market gives a much wider potential audience of partners which could extend to utilities and other power and infrastructure providers.
Opportunities remain in the rest of Chariot’s portfolio and their other Moroccan licences, Brazil and Namibia all carry interest from industry and should not be forgotten about. Chariot has a very healthy cash position, $19.8m at the year end and with no debt and with minimal commitments of under $1m and low G&A having reduced costs substantially over recent years. This cash position almost carries the share price on its own leaving virtually nothing in there for the exciting recent asset acquisition or the existing sizeable portfolio of high quality assets and the shares should be considered remarkably cheap.