Chariot Oil & Gas Limited (LON:CHAR) chief executive Larry Bottomley told investors that the focus for the remainder of 2018 is on the delivery of safe and cost-effective drilling operations in Namibia.
The company also continues to seek partnerships throughout its portfolio, mature its exploration prospects and ultimately deliver further funded drilling opportunities.
It highlighted the partnership opportunity with Shell, offshore Mauritania, as one example of the kind of potential value-accretive opportunities that it has been screening.
On Monday, Chariot revealed that it had been given an option to acquire between 10% and 20% of a Shell-led exploration venture in Block C-19, an area previously held by Chariot.
In today’s statement, ahead of this morning’s AGM in London, Bottomley reflected on recent events and achievements.
“While we have seen some recent stabilisation in the oil markets, Chariot elected to use this period of subdued industry activity to initiate the drilling campaign to benefit from the maturation of the portfolio over the last year and to capture the bottom of the cost cycle,” Bottomley highlighted.
Rabat Deep well offshore Morocco
Offshore Morocco, the Rabat Deep 1 well was drilled at zero cost (thanks to farm-out deals) though the well was not a success, albeit Chariot says the data has proven key play components for targets in its neighbouring permits, Mohammedia and Kenitra.
Both those areas were the subject of seismic data acquisition last year and Chariot highlighted that the insights have allowed the company to develop, de-risk and mature its drilling inventory.
Countdown to new Namibia drilling
New drilling is now scheduled for the fourth quarter of this year, offshore Namibia.
Ocean Rig Poseidon is to drill Prospect S, a possible high impact well targeting an estimated 459mln barrel prospective resource, with an estimated probability of geologic success of 29%.
Prospect S is one of five new prospects, all of which are estimated between 283mln to 459mln barrels each, and, the explorer said that success could de-risk more than 2bn barrels of further prospective resources.
Elsewhere, Chariot has worked to evaluate acreage offshore Brazil and it has put together a portfolio of seven prospective targets, each seen up to 366mln barrels, and, significantly, there’s potential to test multiple ‘stacked’ targets with single vertical wells.
Summing up the financials, meanwhile, Bottomley added: “Chariot has maintained focus on financial discipline, ending 2017 with US$15.2mln in cash, well in excess of its commitments, and raised US$16.5mln net post-period which funds the company's share of the drilling of Prospect S.
“Overhead costs remained tightly controlled, whilst the management has been successful in leveraging the overall industry downturn to negotiate favourable seismic and rig rates, thus allowing for counter-cyclical investment in the portfolio.”