Transformational Growth Through Exploration
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Transformational Growth Through Exploration Morocco Brazil Namibia South Atlantic 100 Ma Reconstruction 1 February 2018 www.chariotoilandgas.com Disclaimer and forward looking statements These Presentation Materials do not constitute or form part of any invitation, offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities in the Company nor shall they or any part of them form the basis of or be relied upon in any manner or for any purpose whatsoever. These Presentation Materials must not be used or relied upon for the purpose of making any investment decision or engaging in an investment activity and any decision in connection with a purchase of shares in the Company must be made solely on the basis of the publicly available information. Accordingly, neither the Company nor its directors makes any representation or warranty in respect of the contents of the Presentation Materials. 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The Presentation Materials may not be used for the purpose of an offer or solicitation to subscribe for securities by anyone in any jurisdiction. 2 February 2018 Chariot – Transformational growth through exploration Chariot USP: High impact Atlantic Margins explorer: Assets in Morocco, Namibia and Brazil Morocco Drill-ready Inventory Prospective resources Portfolio of a Major in scale 768mmbbls* Nimbleness of an Independent 464mmbbls*** Emerging region Exploring for Giants - potential for transformational value Clear and focused risk management strategy: Brazil Portfolio diversity combined with focus on known geology Lead Inventory Prospective resources Expert in-house sub-surface team with state-of-the-art technology 300mmbbls+** Frontier region Endorsement and risk-sharing through partnering Active portfolio management focused on quality Strong balance sheet with track record of capital discipline Namibia Drill-ready Inventory Prospective resources 459mmbbls* Experienced in-house team focused on maximising value: 469mmbbls* Operating capability throughout the exploration value chain Frontier region Explore – Discover – Sell and return value to shareholders Market Cap ~£54m ~US$77m*** YE 2017 Cash (unaudited) US$15.2m * From Netherland Sewell and Associates Inc. (“NSAI”) estimate Gross Mean Prospective Resource 3 *** As at 23.02.18 February 2018 ** Internal Chariot estimate of Gross Mean Prospective Resource Transformational growth through exploration Why invest in Chariot: Transformational impact in the success case of the fully-funded RD-1 well in Morocco: Material upside in the adjoining Chariot acreage in the success case Downside protection through partnering and technical de-risking Cash significantly exceeds commitments and no debt Not a one-trick pony: targeting 3 company-making wells in the near-term from a portfolio in 3 countries, 4 plays, 5 licence areas * * Subject to shareholder approval 4 February 2018 ** Net from Netherland Sewell and Associates Inc. (“NSAI”) estimate Gross Mean Prospective Resource at current equity level *** Internal Chariot estimate of Gross Mean Prospective Resource at current equity level The Investment case Chariot to be exposed to the drilling of two giant potential wells this calendar year* Success in any of these wells has the potential to create transformational value Any success de-risks material running room in each licence Firm drilling commitment gives commercial advantage in ongoing partnering discussions: Reduces dilutive effect of partnering at a commercial disadvantage Partnering enables acceleration of drilling the follow-on portfolio in the success case Committing to drilling offers additional costs savings and operational synergies with 3rd party drilling Company 2P Reserve at YE2016 vs CHAR prospect net mean PR** for drilling inventory and CHAR prospect net mean PR** follow-on prospects Central Blocks, Mohammedia-Kenitra, Namibia Morocco mmboe mmboe Rabat D, Morocco D, Rabat CHAR CHAR CHAR CHAR CHAR * Subject to shareholder approval 5 February 2018 ** Net from Netherland Sewell and Associates Inc. (“NSAI”) estimate of individual prospect Gross Mean Prospective Resource (“PR”) at current equity level *** Internal Chariot estimate of Net Mean Prospective Resource at current equity level Why now? An opportunity to accelerate at low cost Drilling costs at historic lows. Down by 65-75% of the 2014 peak, but expected to increase with a return to exploration Rig day rates down from >$650k/day to < $200k/day Ayame-1X ultra-deepwater well offshore Cote d’Ivoire drilled for <$20m - similar design and target depth to the Chariot wells Worldwide Drillships (>7500’ WD) Low cost window is expected to close. Average day rate vs. total contracted utilisation Chariot captured bottom of the seismic market with extensive surveys in Morocco, Namibia and Brazil Seismic costs are now recovering from historic lows with PGS Q3 results showing growing limitations on streamer availability Increasing seismic activity enables additional exploration drilling Industry return to exploration. In response to stabilised oil price, reduced cost environment and the challenge of reserve replacement First signs of increasing drilling activity in West Africa 6 February 2018 Near-term triggers 1H 2H 1H 2H 1H Country Licence 2018 2018 2019 2019 2020 Saipem 12000 MOROCCO Rabat Deep RD-1 Zero Cost JP-1 Carried well 10% 768mmbbls**** NAMIBIA Central Blocks 2312 & 2412A Drilling* Drilling*** No remaining Well Partnering commitments Prospect S Prospect W 65% 459mmbbls**** 284mmbbls*** MOROCCO Kenitra Drilling** No remaining Well Partnering commitments Kenitra-1 75% 464mmbbls***** MOROCCO Mohammedia Drilling*** No remaining Well Partnering commitments LKP-1a 75% 350mmbbls**** BRAZIL BAR-M-292/3 BAR-M-313/4 Drilling*** No remaining Well Partnering commitments Lead potential 100% 300 – 500mmbbls***** New 100% Evaluation of New Venture Opportunities Ventures * Subject to shareholder approval ** Funded through partnering *** Subject to partnering and dependent on outcome of adjacent drilling 7 February 2018 **** NSAI estimate of Gross Mean Prospective Resource ***** Internal Chariot estimate of Gross Mean Prospective Resource Drill-ready inventory of high margin targets in diversity of plays Portfolio of drill-ready assets in emerging and frontier basins - substantial play opening opportunities • A range of play types and investment opportunities • Water depths range from 750m to 1650m in basins with benign metocean conditions and normal pressure/temperature regimes – lower deepwater exploration and development costs expected • Priority drilling candidates all have material follow-on targets and running room in the success case • Transformational scale, excellent commercial terms and lower costs result in high margin assets with robust economics Summary of high-graded drilling targets and follow-on potential: Water Drilling Inventory Target potential Trap & Play type Follow-on potential depth 4-way dip closed structure 6 leads JP-1 (RD-1 well) (Rabat Deep) 768mmbbls* 1115m Jurassic carbonate reservoir (109 to 1041mmbbls*) Jurassic source JP-2 (Moh) (117mmbbls*) Dip-closed structure 4 prospects Prospect S (Central blocks) 459mmbbls* 1650m Upper Cretaceous turbidite clastic reservoir (283 to 393mmbbls*) Aptian source Summed mean >1.75 Bbbls 3-way dip, faulted closed structure 4 prospects Kenitra-1 (Kenitra) 464mmbbls** 750m Lower Cretaceous deltaic clastic reservoir (182 to 350mmbbls*) Jurassic source Summed mean > 1Bbbls Drill-ready inventory in lower-cost deepwater operating environments in new and emerging basins with excellent commercial contract terms creating high-margin assets offering transformational potential in the success case * NSAI estimate of Gross Mean Prospective Resources 8 February 2018 ** Internal Chariot estimate of Gross Mean Prospective Resources Capital discipline Prudent financial management of funds 2013 to 2017: Reduction in Annual Cash Overhead ($m) 2013 to date: $68.3m End 2012Cash End $41.5m $15.2m* Cash position: Cash 2017YE YE 2017 cash $15.2m* Investment in the portfolio in the Investment Equity raise (gross) $15.0m** in recoveries in - $14m Farm Cash in excess of licence commitments Other than the third-party fully-funded Rabat Deep-1 well, no remaining work programme commitments raise 2014 Equity Equity No debt $108.6m * Unaudited