leadf
logo-loader
viewChariot Oil and Gas Limited

Chariot Oil & Gas to drill Prospect S target offshore Namibia in Q4 as it secures drillship

Ocean Rig Poseidon is expected to arrive on location in the fourth quarter of this year, with drilling set to begin shortly after

oil and gas drillship
Chariot has a 65% interest in the Central Blocks licence offshore Namibia

Junior explorer Chariot Oil and Gas Limited (LON:CHAR) expects to begin deepwater drilling at its Central Blocks licence offshore Namibia in the fourth quarter of this year.

The AIM-quoted company has contracted the Ocean Rig Poseidon drillship to drill one firm well – Prospect S – and one optional well.

WATCH: Chariot Oil and Gas secures rig for Prospect S offshore Namibia

Ocean Rig Poseidon is scheduled to arrive on location in the fourth quarter, with the drilling of Prospect S to begin shortly after.

“We are pleased to have secured the high-performance Ocean Rig Poseidon drillship for the Prospect S well in Namibia,” said chief executive Larry Bottomley.

“Operational plans are now well advanced for the first deepwater drilling in our Central Blocks licence in Q4 2018.”

He added: “We are continuing to take every advantage of the current historic low-cost drilling environment as well as maximizing any further cost synergies by cooperating with other drilling operations in Namibia.”

Farm-out talks ongoing

Prospect S is estimated to be a prospective resource of 459mln barrels (mmbbls), while the Central Blocks licence as a whole has a gross mean prospective resource of 1,758mmbbls.

The results of the drilling could also de-risk two other structural traps, which have a combined prospective resource of 885mmbbls, Chariot said.

“Our farm-out discussions are ongoing, strengthened by this well having already been fully funded, and we look forward to introducing new partners to share the costs and also the significant rewards of a discovery on Prospect S, and to accelerate the optional drilling on the transformational follow on potential,” said Bottomley.

'Journey far from over'

“Chariot has been in the sin bin since its Moroccan duster and has received no benefit from the recent oil price rally, despite this improving the chances of a successful Namibian farm-out,” wrote finnCap analyst Jonathan Wright in a note.

“However, news of a rig being secured for its next major well, in Namibia, will refocus investor attention, especially in light of the attractive risk/reward skew at current levels.

“We estimate a net present value (NPV) for Prospect S of 23p per share on a risked basis, and 173p/sh unrisked.”

He added: “Moreover, there is major follow-on potential if successful. Chariot is fully funded for this well and a farm-out would allow it to drill a second. This journey is far from over.”

Shares rose 2.7% to 8.25p early on Monday.

--Updates for share price and analyst comment--

Quick facts: Chariot Oil and Gas Limited

Price: 3.495 GBX

AIM:CHAR
Market: AIM
Market Cap: £13.24 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Chariot Oil and Gas Limited named herein, including the promotion by the Company of Chariot Oil and Gas Limited in any Content on the Site, the...

FOR OUR FULL DISCLAIMER CLICK HERE

Chariot Oil and Gas secures rig for Prospect S offshore Namibia

Larry Bottomley, chief executive of Chariot Oil and Gas Limited (LON:CHAR), tells Proactive's Andrew Scott all is on track to begin deepwater drilling at their Central Blocks licence offshore Namibia in the fourth quarter of this year. Chariot's  contracted the Ocean Rig Poseidon...

on 4/6/18

2 min read