Chariot Oil & Gas Limited (LON:CHAR) has launched drilling preparations at its Morocco assets as it looks to shift focus towards delivering an exploration well in the country.
The oiler has identified an inventory of prospects in the Rabat 1 play, offshore Morocco, and is targeting the drilling of the Mohammedia licence prospect MOH-B, which has a gross mean prospective resource of 637mln barrels in two targets.
The group has also worked to evaluate acreage offshore Brazil and has put together a portfolio of seven prospective targets, each seeing up to 366mln barrels with the potential to test multiple ‘stacked’ targets with single vertical wells.
In a pre-close operational update in December, the company said it had begun the preparations through the approval of the drilling environmental impact assessment, long lead items identification and other operational arrangements. The company’s management believes that this preparatory work will enable Chariot to avoid unnecessary delays associated with its plans to drill in the near term.
The company, which retains a portfolio of highly prospective assets in Morocco and Brazil, said it is keen to take advantage of rig rates, which are currently at historic lows. Its in-house subsurface team continues to develop an inventory of drill-ready prospects with material follow-on potential and has initiated partnering processes in Morocco and Brazil.
“Importantly, the Rabat Deep 1 well has demonstrated a new petroleum system in the offshore sector of Morocco, one [of] which may be significantly more robust than that previously extensively explored by the industry, which materially de-risks the Mohammedia and Kenitra licences,” said Chariot chief executive Larry Bottomley.
“Looking ahead, we are focused on delivering an exploration well in Morocco utilising our established in-house drilling team to deliver this programme safely, efficiently and cost-effectively.
“With all licence commitments now met across the entire portfolio, the company is fully-funded to progress our assets in Morocco and Brazil whilst remaining vigilant to other value accretive opportunities," the CEO added.
The company has a strong cash position, with unaudited year-end cash estimated to be US$19 million. The company remains debt free with no licence commitments across its entire portfolio.
Prospect S disappointment
The refocus followed a disappointing result for the group’s Prospect S exploration well, offshore Namibia, which did not encounter any hydrocarbon accumulation and was plugged and abandoned.
However, Bottomley said data gathered from the prospect had provided the firm with “valuable information about the reservoir potential of these turbidite systems which form the primary targets across many of the prospects within the Central Blocks portfolio”.
“In Namibia, Chariot also demonstrated it is capable of safely and efficiently operating a deep-water well, delivering the operation within a short time-frame to capture the optimum point of the cost cycle,” he added.
Thanks to partnering arrangements and the low-cost nature of the drilling off the coast of Namibia, the cost of the failure was not too onerous, allowing the firm to progress with its other assets.
With shares trading around 2.7p as of 8 January, Chariot carrier a market cap of £9.9mln.