Chariot Oil & Gas Results FY 2014

 

   *    Woodside in Rabat Deep Offshore permits, Morocco - 25% equity for reimbursement of all back costs and a carry on additional data acquisition (Chariot retains a 50% operating interest)

 

   *    AziLat Limited ("AziLat") in four offshore permits, Brazil - AziLat to acquire a 25% stake in licences (subject to various approvals) in return for paying back costs and 50% of upcoming 3D seismic programme (Chariot retains a 75% operating interest)

 

 

·      Long licence periods with low commitments and advantageous commercial terms secured across all licences

 

·      Addition of the Mohammedia Reconnaissance licence ("Mohammedia"), Morocco, covering play extension to Rabat Deep and Loukos; relinquishment of high risk Northern Blocks, Namibia, with a final impairment of US$33.6 million on this licence

 

·      Fast follower positioning achieved throughout the portfolio:

 

o  Re-award of Central Blocks 2312 & 2412A and Southern Block 2714A, Namibia

 

 

·      Debt free with a cash balance of US$53.5 million as at 31 December 2014:

 

o Placing completed in August 2014 raising gross proceeds of ~US$15 million

 

o Farm-out to Woodside brought Chariot close to "zero cost" in Morocco with US$10.7 million of cash received to date and remaining funds to be received in H1 2015

 

o Fully funded for all commitments with sufficient cash to pursue additional opportunities

 

 

·      Bill Trojan and Dave Bodecott appointed as Non-Executive Directors - enhancing the Board's breadth of technical expertise

 

 

Continued Development of High Potential Portfolio

 

 

·      Farm-out completed on Rabat Deep - near zero cost expenditure for Chariot achieved to date

 

·      Award of Mohammedia Reconnaissance licence

 

·      All licence commitments fulfilled:

 

o  Reprocessing of legacy 2D seismic complete; 1,700km2 new 3D seismic acquired, interpretation  underway

 

·      Giant prospectivity and priority drilling target JP-1 in Rabat Deep permit described with follow-on Prospect JP-2 identified in Mohammedia

 

·      Dataroom due to open in Q2 2015 to seek partners for Mohammedia and Loukos

 

 Mauritania

 

·      Specialised processing and iterative interpretation of the 3D volume has yielded an extensive prospect portfolio including four prospects, each in excess of 400mmbbls gross mean prospective resources (internal estimates)

 

·      All licence commitments fulfilled

 

·      Dataroom opened for potential drilling partners

 

 

·      Farm-out to AziLat on all four licences (subject to various approvals)

 

·      Completed reprocessing and interpretation of legacy 2D seismic data across all licences - initial lead inventory identified

 

·      Submitted Environmental Impact Assessment ("EIA") for the upcoming 3D seismic programme

 

·      Dataroom opened to introduce an additional seismic partner

 

·      Used lower cost of seismic services in the market to enhance shareholder value

 

 Namibia

 

·      Southern Blocks - all licence commitments fulfilled following acquisition of 2D seismic in order to optimise 3D seismic programme location

 

·      Central Blocks - acquisition of 1,700km 2D programme completed to define key targets to optimise 3D seismic programme location

 

·      Dataroom reopened on Central Blocks to secure seismic/drilling partners

  

 

·      Continuing new venture screening process for value accretive assets

 

·      Focus on diversifying the portfolio by broadening and balancing risk profile

 

 Outlook

 

·      Continue to develop and de-risk the portfolio in line with the strategy:

 

o  Seek additional partners to share in the risk and costs of exploration

 

o  Further define and mature asset descriptions to optimise the chance of success with the drill bit

 

·      Refocusing of the New Venture effort to capture opportunities coming available in current business environment

 

·      Adhere to strict capital discipline

 

o  Continue stringent cost control on G&A and operational expenditure

 

Larry Bottomley, Chief Executive of Chariot, commented, "Chariot has continued to deliver on its focused strategy by partnering in Morocco and Brazil, maintaining a strong balance sheet through capital discipline, maturing its assets and demonstrating high margin, giant potential prospectivity at the same time as positioning the entire portfolio to ensure low commitments and long licence periods.

 

Current market conditions in the oil and gas industry are challenging, and we will look to manage those that affect our business accordingly, but we also see this as a time of real opportunity for well funded and well positioned companies such as Chariot. We will continue to progress our existing portfolio, as well as look to capitalise on our position of strength and take advantage of prospective assets that have the potential to create shareholder value over the longer term."