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Wednesday, August 30, 2017
Chariot Oil & Gas elected not to enter into the First Renewal Exploration Period of its exploration licenses covering Namibian Blocks 2714A and 2714B. The Namibian Ministry of Mines and Energy and Chariot’s partners have been notified of this decision and the process of withdrawal is now underway.
Chariot acquired approximately 2,128 km of 2D seismic data, prefunded the ION Namibia SPAN long offset 2D seismic data, and reprocessed the historic 3D seismic data over the blocks. Analysis of the integration of this seismic data with regional well data identified gas prospects AO1 and AO2 in the Aptian clastic onlap play.
The work undertaken by Chariot to define this prospectivity resulted in industry interest; however, the technical risk associated with these prospects deterred potential partners from committing to a program of exploration drilling in the current environment. The decision not to enter into the next period was made in line with the company’s risk management strategy, its focus on portfolio management and capital discipline.
Chariot did negotiate itself a way back in however. In exchange for facilitating the partnering program to be undertaken by NAMCOR, Chariot has agreed on the framework of an option for the company to back-in for 10% ground floor equity from the remaining partners. This option can be exercised at the company’s discretion for no consideration following the drilling of the first exploration well in each of the licenses. The heads of terms of the option have been agreed and the final contract remains subject to approval by both the remaining partners and Chariot.
Larry Bottomley, CEO commented: “The focus for Chariot is the delivery of transformational value through the discovery of material hydrocarbon accumulations. While it is clearly disappointing that we were unable to attract a partner on the Southern Blocks in the current environment, it is important that the Company maintain discipline in the management of risk and the allocation of capital. NAMCOR has requested that Chariot remain engaged in the partnering process through a zero cost option to back-in after exploration drilling in recognition of the depth of understanding of the Chariot team of these licenses and the quality of technical work performed.
“While supporting the remaining partners in these efforts, our operational focus is on preparing for the drilling program in Morocco, progressing preparations to drill in the Central Blocks in Namibia and launching the partnering process in Brazil.
“We would like to thank NAMCOR and the Ministry of Mines and Energy for continuing to facilitate our attempts to progress our acreage through to drilling.”
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