After the disappointment of the Tapir South Well in May of this year and then the Kabeljou Nimrod Well in September, investors in offshore Namibia focused Chariot Oil and Gas have seen their investment plummet over 75% during the last year to settle around 30p.
Chariot Oil & Gas today announced that it had entered into an agreement with Maghreb Petroleum Exploration for a 75% equity interest in the Loukos and Casablanca/Safi exploration permits offshore Morocco. The deal is a first step in rebuilding its exploration portfolio after the setbacks of 2012.
The Loukos licence is 1,925km2 in size and extends from the coast to some 50km offshore with water depths between 5m and 110m. The Casablanca/Safi licence is 3,500km2 in size and is similarly situated to Loukos in terms of its extent offshore with water depths between 5m and 165m.
Following approval, Chariot will be required to reprocess 835km of 2D seismic data within the Loukos licence and 1,200km of 2D seismic data within the Casablanca/Safi licence, a total of 2,035km within a six month exploration period. Once complete, Chariot will have the option to move forward into further exploration phases which would involve the acquisition of 3D seismic data and the subsequent undertaking of exploration drilling activities.
Despite the progress, don’t expect an ignition in Chariot’s battered share price any time soon. The lack of luck with the drill bit has set back the company’s ambitions and a significant re-rating will probably be elusive for some time. For those with short time scales, there are better bets out there right now.