By Ian Lyall
July 04 2014
The prime drilling candidate at the moment is JP-1, estimated by independent consultants Netherland Sewell to hold an unrisked 618mln barrels of oil equivalent.
The prime drilling candidate at the moment is JP-1, estimated by independent consultants Netherland Sewell to hold an unrisked 618mln barrels of oil equivalent.
—ADDS BROKER COMMENT AND SHARE PRICE—
Shares in Chariot Oil (LON:CHAR) rose 10% after it revealed it had brought in a big-hitting partner in the form of Woodside for its Rabat Deep permit off the coast of Morocco.
The Aussie explorer has agreed to pay the back costs of a 3D seismic survey on the acreage and pay for further data acquisition for a 25% stake, leaving Chariot with 50%.
It then has the option to acquire another 25% and operatorship for funding an exploration well up to an agreed price cap.
The prime drilling candidate at the moment is JP-1, estimated by independent consultants Netherland Sewell to hold an unrisked 618mln barrels of oil equivalent. There are six other leads in this Jurassic fairway play, according to a recently-compiled independent audit.
Chief executive Larry Bottomley said: “We are pleased to have signed this farm-out agreement with Woodside and look forward to working with them in order to identify a priority well location for this giant prospect.
“Woodside is an experienced basin opener, firmly focused on large scale projects with material production potential. This transaction is an endorsement of Chariot’s view on the opportunity and also our strategy to mitigate risk and introduce levered partners in order to validate and finance the development of our assets.
“As well as progressing our Moroccan acreage we will be using the funds from this farm-out to expedite our work programmes throughout the portfolio.”
At 8.15am, the shares were changing hands for 20.64p each, for a rise of 1.76p. In the past three months the stock has fallen 12%.
The shares rose 5% to 19.89p. Broker RFC Ambrian told investors: “We believe that this farm-out should be viewed very positively by the market.
“In our most recent fair value estimate we had given no value to this permit as it had only just been acquired and the 3D seismic survey had not yet been shot. Given Chariot’s low market cap, we think the market is also giving little, if any, value to these licences.”
