Energy Stock Gearing Up for Drilling
Research Report

In an April 10 research note, Auctus Advisors analyst Stephane Foucaud stated that Chariot Ltd. (CHAR:AIM) was gearing up for drilling both off and onshore, with the "farm-out transaction with Energean" now finalized. 

Chariot has been paid an upfront sum of US$10 million in cash. The company maintains a 30% ownership stake in the Lixus license, which encompasses the Anchois project, situated off the coast of Morocco. Additionally, Chariot holds a 37.5% interest in the nearby Rissana license, also located in the Moroccan offshore region, Foucaud reported. 

The report also stated the company has a signed contract with Stena Drilling to drill "the high impact Anchois-East appraisal and development well" in the third quarter of this year.

Foucaud commented, "Anchois East is a very important well that could increase the size of Anchois to >1 tcf (300 bcf net to Chariot). Our overall unrisked NAV for Anchois, including Anchois East Footwall and Anchois East North Flank, is £0.42/sh. This represents 4.5x the current share price."

Energean, another company, has the choice to buy an additional 10% of the Anchois project. If they decide to do so, they will have to:

1. Pay an extra US$50 million, either in cash or shares.
2. Cover US$850 million of the project's costs.
3. Pay a 7% royalty on the project's income.

When considering the cash payment and the cost coverage, Foucaud reported that a 10% stake in the project is valued at US$220 million. This means that Chariot's remaining 20% share is worth US$440 million, which is equal to £0.31 per share.

Additionally, exploration drilling is set to commence soon on the onshore Loukos license.

With this, Foucaud wrote, "We re-iterate our target price of  £0.50/sh."

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Disclosures for Auctus Advisors, Chariot Ltd., April 10, 2024

Copyright and Risk Warnings Chariot Limited (“Chariot” or the “Company”) is a corporate client of Auctus Advisors LLP (“Auctus”). Auctus receives, and has received in the past 12 months, compensation for providing corporate broking and/or investment banking services to the Company, including the publication and dissemination of marketing material from time to time.

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Author The research analyst who prepared this research report was Stephane Foucaud, a partner of Auctus.

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