Namibia Pushes Chariot to Steep Loss

Atlantic margin explorer UK-listed Chariot Oil & Gas reported a first-half loss that was ten times bigger than last year's, thanks to a $51.3mn impairment reported September 13. However it is carried on its next major exploration well.

Its first half 2017 net loss was $53mn, compared with $5.3mn in 1H2016. As it has no production, there was no significant income.

Chariot decided against renewing its southern blocks offshore Namibia this August 29, and booked the $51.3mn impairment as at end-June 2017. It booked a smaller impairment charge when it elected not to renew its Mauritania C-19 licence in June 2016.

It did though receive $3mn from Eni after farming out a 40% interest in the Rabat Deep exploration permits offshore Morocco, announced January 9 this year. Remaining interests are Woodside 25%, Chariot 10% and Moroccan state ONHYM with a 25% carried interest.

Chariot additionally said in January that Eni will carry both Chariot’s share of costs in a deepwater well on the JP-1 prospect, up to an agreed cap; and the latter's geological and administrative costs in the next licence period. The drilling cap is confidential, but a source said that it is “in excess of the expected drilling cost of the JP-1 well.”

Now, Chariot says the Rabat Deep JP-1 spud remains targeted for the latter part of 1Q 2018 with “the potential to de-risk an additional six Jurassic leads ranging from 119 to 1,041mn barrels gross mean prospective resources.” Most of its prospects are targeting oil, but in areas where gas has also been found – for instance offshore Namibia, Chariot is preparing for 2H 2018 drilling with Prospect S.

Mark Smedley