They said they would, do the people on the other side of the table believe it?
Whether anyone actually wants them to depends on their personal game plan.
Basically I see two extremes in terms of survival and then everyone will be somewhere on the continuum.
Some people with very diverse portfolios will have bought into CHAR for just the two good value drills in 2018, if both fail it does not threaten their survival one bit - they will want no farm out.
On the other extreme, CHAR will be the only holding they have. Their need is for CHAR to be involved in as many drills as possible, in order to maximise the chance of return from the whole portfolio. In order for them to survive they do not want the company to get into a fund raise, drill, fail, fund raise, drill, fail cycle - they will want a farm out on as good as terms as Larry can get.
In terms of probabilities, theoretical expectations versus actual outcomes, the above merely reflects the differing needs of those who are in the "calm" and those who are "in the eye of the storm"
Major Oil Companies Embrace Latin America
Mexico, Brazil and Argentina lure biggest oil firms, though some political risks loom
By Robbie Whelan, Paulo Trevisani and Bradley Olson
May 21, 2018 9:00 a.m. ET
MEXICO CITYThe worlds largest energy companies are placing enormous bets on Latin America, a region rich with oil that many avoided in the past due to restrictive economic policies and the threat of resource nationalism.
Exxon Mobil Corp. , Royal Dutch Shell PLC and others have flocked to offshore auctions in Mexico and Brazil, fracking prospects in Argentina and big discoveries in the small nation of Guyana.
The wave of interest comes as several countries, including the regions two largest economies, Brazil and Mexico, have liberalized their energy markets in a bid to offset declining oil production or fiscal constraints. The changes have lured most major Western oil companies.
The companies have little choice. Latin America has become one of the few areas in the world outside the U.S. where they can find profitable drilling opportunities. Many countries with significant oil and gas reserves, such as Saudi Arabia and Iraq, generally offer their best prospects to their own state oil companies, while U.S. sanctions have put Russia and Iran mostly out of reach.
All the supply boom in the world is coming from the Americas, said Amy Myers Jaffe, an energy expert at the Council on Foreign Relations in Washington. The center of the universe in oil is moving that way.
The timing of these early investments in newly opened Latin America is critical, as concerns about supply shortages are emerging.
Brent crude topped $80 a barrel this month for the first time in four years, and daily world oil demand is expected this year to exceed 100 million barrels for the first time ever, according to the U.S. Energy Information Administration.
Not everything is rosy in the region. For many companies, Venezuela is a cautionary tale. Under former President Hugo Chávez, the country seized assets from Exxon and ConocoPhillips about a decade ago. Despite holding the biggest oil reserves in the world, Venezuelas production has plunged nearly 40% in the last five years due to corruption, a debt crisis and underinvestment.
Some see similar political risk brewing in Mexico as it heads into a presidential election in July. Leftist nationalist Andrés Manuel López Obrador leads the polls by a wide margin and is an opponent of the 2013 constitutional amendment that opened Mexicos energy sector to foreign and private investors after 75 years of state monopoly.
Mexico has awarded 110 contracts to companies from 20 countries in the last three years, raising more than $2 billion in income, bonus payments and co-investments from joint ventures with state oil company Petróleos Mexicanos, or Pemex.
Mr. López Obrador has said he wont reverse the energy overhaul if he wins but would freeze new exploration and production auctions until existing contracts can be reviewed for their benefits.
At a Mexico City rally in March, a group representing Pemex refinery workers who support Mr. López Obrador hung banners in a crowded park demanding a second oil expropriation. The signs showed boots kicking the corporate logos of Russias Lukoil, Exxon and other oil companies beneath the words Russians Out, Americans Out, Other Foreigners Out.
Global oil companies are set to spend tens of billions of dollars in Latin America in the coming years, and the developments make up a significant portion of their growth plans. Exxon executives have said prospects in Brazil and Guyana are among the best assets the company has had in decades.
The region also offers cheaper opportunities than booming U.S. shale regions such as West Texas, according to James Park, chief executive of GeoPark Ltd., a small pr
The Africa summit where Larry is presenting is starting this Wednesday, which should see some interest and maybe finalise a potential deal with a partner. Some big names will be in attendance. The Petroleum Commissioner, Maggy Shino is also attending along with Tom Alweendo from the Ministry of Mines and Energy, Namibia.
Chariot is also presenting at the Oil Capital Conference in London on 14th June 2018. Oil Capital is a daytime event held in the heart of the City and sees eight listed Oil companies present for thirty minutes to an audience of 300 institutional and sophisticated investors. http://www.oilcapital.com/conferences
Africa E&P Summit 23-24 May 2018
Final Results 06 June 2018
Oil Capital Conference London 14 June 2018
The discussions for farming out the Namibian blocks will be progressing, Larry confirmed that the company are in negotiations with a potential partner.
The Namibian licence is up for renewal soon so a decision needs to be announced shortly, the management have already had the placing to pay for drilling Prospect S and have confirmed that they are targeting a drill date of mid-October so what can the delay be down to? I think a farm out could be pending hope it comes with a free carry or equivalent cash.
Larry recently stated that they're waiting for the Brazilian CPR from the independent auditor but confirmed that they have already opened the data room. I wonder what level of interest they are getting. Drilling is being targeted for 2020 but if the results of the CPR are positive then we could attract a decent partner to give third party validation and plenty of cash.
We do not have any further commitments and our current cash balance is in the region of $30m IMO, the overheads are around $5m per year.
Plenty of near term catalysts to be excited about IMO.
Lol, from your previous views, here espoused, Roga, I would have thought your surprise would be that it had stayed so high as 8? You have previously bad mouthed CHAR in the expectation that the sp was inexplicably high!
It looks like CHAR has been bogged down at 8p level, something is holding it down, very firmly, perhaps, because of my opinion, no doubt pmaj&in4pin4m will have good answer and solve that problem. Lets have it Chaps?????
''Attention is now focused on Prospect-S in Namibia (prospective resources of 459m barrels) which is due to spud in the fourth quarter this year. Chariot has a 65 per cent working interest and is seeking a farm-in partner for its Central Blocks in Namibia to lay-off some of its net cost exposure on Prospect-S which broker Peel Hunt estimates at $15.6m. Its an exploration hotspot with oil giants TOTAL and ExxonMobil entering the region in recent months. On a risked basis, finnCap values Prospect-S at 23p a share, or almost three times Chariots share price.
Not surprisingly Chariots share price slumped on the Moroccan drilling news to below the 13p price at which the company raised $21.1m in a placing and open offer a couple of months ago, primarily to fund drilling of a well at Prospect S in Namibia. However, with cash of $32m (£23.6m) in the bank equating to 6.5p a share, and a farm-in deal in the Central Blocks possible, then the chances of drilling success in Namibia is being very modestly valued by investors in Chariots current valuation.''
HF - actually our strong cash position of ~ US$30m is worth ~6p per share,
anyway what matters to the SP is the upcoming drill in Q4. Remember in January we have been trading as high as 24p in anticipation of drilling RD-1. At that time our cash position of US$15m was worth ~4p, so we were trading ~6 times cash.
Heebesfan, it's so obvious, cash in hand has no value in term of SP, cash is to be spent only assets influence rise or fall of SP. Just imagine if they have no positive results in two years, what good today cash in hand will do and how much, will it, still be there.
What do you say about broker who puts a value of 39p, on CHAR, and Market values it at 7.92p. They may put what they like, even 27p but that is not serious. I would completely ignore those charlatans. On what facts they value it at 39p, I heard CHAR has got licence to explore on Mars that may be the reason.
FinnCap lowered its price target on Chariot from 39p to 27p. The difference of 12p is exactly the risked value they have put on RD-1. So they see a value of 27p per share on current portfolio, cash, prospects, etc...
The price target will be much higher as soon as they will put a risked value on prospect S which should be much higher compared to the 12p on RD-1 considering 4 times as much prospective resources net to Chariot and a much higher chance of success. My guess is a risked value of > 50p per share.
the well had been safely drilled within schedule and budget - no problems..
We've not only raised the cash to be able to make a firm drilling commitment but also hired David Brecknock as our new Drilling Manager with over 20 years of experience:
"David, who joined Chariot in 2017, is a drilling project manager with over 20 years international experience. Most recently, he successfully led drilling teams in the execution of deep-water exploration campaigns for Ophir Energy and Perenco in West Africa. Previously he held a variety of upstream engineering, operational and management roles in the UKCS, Eastern Europe, Africa and South America with both independent and major operators. David is a Chartered Petroleum Engineer, Fellow of the Energy Institute and has an MBA from Warwick Business School."
The raise opened up the prospect of farming out to non operators on top of oil majors who might want to take over the operator role. There are small cap non operators (as Africa Energy Corporation) out there keen to build up a near term high impact drilling portfolio via farmins or acquisitions. Chariot with a firm drilling commitment for prospect S scheduled to be drilled in Q4 seems like an ideal candidate.
Again - no issue with Chariot being the operator as with Tapir but this time hope to see 1 -3 minority partners providing the cash to cover our share of costs to drill the well, for example 30% for US$10m. Retaining a 35% interest would still be worth a massive 162p per share in the success case (@US$5/bbl).
Actually I have been in all 3 and at times having been well up I was break even. I'm now slightly down based on the poor timing of the placing, but again I was well up at one stage on this pre-drill. I don't have rose tinted glasses and see it balanced whereas you seem to look for the worst case. In that situation I'd get out and ignore it, but in the near term I personally think there's positive news on the horizon and a good opportunity here once it stabilises. The share dilution funds haven't as yet evaporated and are still held as a current asset. They may be topped up with an imminent partner announcement. The drill later this year sounds reasonably confident and other exploration and partnering is ongoing. There are more shares and associated dilution now than in earlier years, but unless you're lucky finding the black stuff early, that's the price or learning and experience. For a 10% free carry I think the fall has been a bit excessive.
FWIW my take on situ is as follows:
If they could farm out to major they would. Fact that they are talking about others probably means there is no interest or no interest for the amount being offered. Being the operator takes some unique skills and I am not sure a tiddler would have the skill set. That worries me.
I think that they have a policy of farm out, talk the opportunity up, do a placing for the next but one well, then drill and so on. Its not great for the current s/holders but probably the only way to keep the company going absent some drill success.
This is such a small part of my portfolio I see it as a lottery ticket - and about as likely to come in!!
All IMHO and DYOR....
SDR - have you been a share holder through all 3 of chars failures?? Probably not.
Hardly deramping, more being a realist. Take your rose tinted glasses off just for one minute and anticipate the next 6 months with worst case scenario in mind.
What would SP be on another duster in Namibia, especially if char take lead and retain much more capes? I dread to think.
Lets say 4p.
How much money would char need to stay afloat, gbp 15mil??
Cash raise (assuming they havent already done one pre Namibia drill) at 3p to get gbp 15 mil would be 500mil shares.
Argue it all you want, call me a deramper, what ever but the stark reality is the above is potentially a very real future for char in 2018.
Granted there could be some money made between now and next drill but given what LB done pre-drill recently I wouldnt put it past them to raise cash pre Namibia.
I suppose what is crucial in the next two/three months is to see some meaningful partnerships forged which return some capex and offer expertise going into the drill.
AP / char and Namibia have long history and at one time the whole venture was based on Nam. Imo they do not want to 'over' sell their share of it. Morocco was/is support and allowed them to develop and hold what they may see as their family jewels. Imo you have to look at this whole enterprise through AP. As long as he / Char can maintain a PF structure that supports Namibia hence LB and his achievements , then AP will want to hold as much and for as long as it possibly takes given his broader interests in Africa.
Maybe LB has snagged a winner in Brazil and Char may not have to drill to realise a great outright buy from Shell but that could be 24 months of playing poker.
AP = Chariot/Namibia
Girdz - you're possibly a deramper but I don't necessarily see your point. The strategy is generally to partner up so all Chariot do is try and put an attractive exploration portfolio together, which they presently have. I've got to admit I'm not sure why they're planning to go principal on the next planned drill though I suspect that was subject to the results of the last drill and as per my last messages it has affected both Chariot and big Operators stand point in negotiations prior to this time. Prior to the ENI drill carry, Chariot were in a much different situation. I wouldn't be surprised if one of the big guns now comes on board though a partnership of some sort can be expected. Ditto for the rest of the portfolio. There may well be fundraising at some stage in the future though I think your scaremongering is a bit shortsighted and also perhaps a bit transparent in your intent. Thanks for your thoughts though.
If you can believe anything that comes out of LBs mouth then all fool you.
He may not be planning to raise now, but come Aug sept who knows.
One more failed drill and char is fooked.
Therell do another fund raise, if any one takes part, and therell be over a billion shares in issues.
Needs some smart moves soon on both Namibia and Brazil.
If go along on Namibia and fail, then may not even get a shot at Brazil
Thanks all - makes sense. In the current situation you'd expect them to review their strategy and go for something like RD-1 with a small interest. Before the last drill you could reason wanting to keep their options open and the big boys awaiting a more favourable negotiating point. The balance has changed since previous discussions and it's now here in my view.
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