TIDMCHAR
RNS Number : 0735D
Chariot Limited
25 June 2021
25 June 2021
Chariot Limited
("Chariot", the "Company")
2020 Final Results
Chariot (AIM: CHAR), the Africa focused transitional energy
company, today announces its audited final results for the year
ended 31 December 2020.
2020 and Post Period Highlights
Building an African focused Transitional Energy Group
-- Strategy updated with new mission to have a positive impact
on the environment, the countries and the communities that we
operate in.
-- Name changed to Chariot Ltd and rebranding under the
strapline Chariot Transitional Energy, with a focus on Africa
through the twin business streams of Transitional Gas and
Transitional Power.
-- Transitional Gas holds the Moroccan licences Lixus Offshore,
containing the Anchois gas development, and the soon to be formally
awarded Rissana Offshore, with operatorship and 75% working
interest.
-- Transitional Power, a second business stream, launched in Q1
2021 with the acquisition of African Energy Management Platform
("AEMP"). The recently completed acquisition, initially looks to
transform the energy market for mining operations in Africa,
providing a giant largely untapped market with cleaner,
sustainable, and more reliable power.
-- Recapitalised Company through successful placing,
subscription and open offer, raising net US$18.8 million in Q2 2021
with a further US$4.2 million underwritten by Magna Capital LDA (of
which Adonis Pouroulis is a substantial shareholder); funded to
progress both business streams.
Transitional Gas
-- Anchois appraisal drilling planned for Q4 2021 with 3
distinct objectives: (1) reconfirm the original discovery A&B
sands; (2) provide a producer well location to be suspended for
future use; (3) potentially drill the additional prospective sands
and potentially establish a larger resource base for longer term
growth.
-- Rig tender process underway; assembling key team members from
the 2018 drilling campaign that delivered a well on time and within
budget.
-- The Anchois gas development's 2C base case resource has a net
NPV10 of approx. US$500 million with an IRR in excess of 30%
yielding expected annual revenues of up to US$200 million.
-- Reprocessing of 3D seismic data across Lixus completed;
Upgrade of audited total remaining recoverable resource to in
excess of 1 Tcf for Anchois, representing a 148% increase
(comprising 361 Bcf 2C contingent resources and 690 2U prospective
resources).
-- Expression of Interest Letters to debt finance the
development received from African Finance Corporation ("AFC"), a
pan-African multilateral development financial institution with
over US$6 billion in assets, and a major multinational investment
bank, which is a leading provider of finance in the energy
sector.
-- Key terms agreed on new Rissana Offshore Licence, Morocco,
with formal award expected in 2021, capturing prospective acreage
surrounding the core Anchois development.
-- Collaboration agreement with Subsea Integration Alliance
signed in February 2021, a developer of offshore gas projects, to
progress the front-end design, engineering, procurement,
construction, installation and operation of the Anchois Gas
Development.
-- Gas Market Memorandum of Understanding ("MOU") signed in
March 2021 with partner the Office National des Hydrocarbures et
des Mines ("ONHYM") and the Ministry of Industry, Trade and Green
and Digital Economy ("Ministry") in Morocco to support the Anchois
Gas Development.
Transitional Power
-- Acquisition completed in Q2 2021 of AEMP for consideration of
up to US$2 million payable primarily in Chariot Ordinary
Shares.
-- Whole AEMP team to join Chariot, including founders Benoit
Garrivier and Laurent Coche who become shareholders in Chariot.
-- Acquisition meets Chariot's key environmental, social and
corporate governance ("ESG") values of positive impact on the
environment, countries, and communities where it operates.
-- Right to invest in up to 15% project equity at cost in
projects developed in strategic partnership with Total Eren, a
global renewable IPP to develop low-risk mining power projects in
Africa.
-- Partnership has built a pipeline of 500MW of African mining
power projects; Chariot's management is also looking to leverage
its other significant business interests in multiple mining
operations across Africa to rapidly grow the pipeline and
scale-up.
-- Recovery of overhead costs as part of the partnership
provides an immediate post-acquisition revenue stream to finance
ongoing costs.
-- First project in operation, the largest hybrid solar plant in
Africa, at the Essakane gold mine in Burkina Faso, successfully
completed and currently generating returns providing proof of
concept.
-- Funded for next project, expected to reach financial completion in the near term.
Other licences:
As announced in September 2020, the Company will likely only
proceed with exploration if nearby adjacent drilling de-risks the
basin sufficiently to generate partnering.
-- Non-cash impairments of US$66.7 million made in respect of
Namibia and Brazil and US$0.5 million. against remaining drilling
inventory reflective of change in strategic direction and
Management's approach to non-core assets in the current challenging
market environment.
-- Whilst fully written down, Chariot has retained its interest
in Namibia and Brazil with no work commitments going forward and
will continue to host data-rooms for marketing of both assets.
Corporate
-- 2020 year-end cash position of US$3.7 million, no debt, with no remaining work commitments.
-- Restructuring in April 2020 reduced annual cash overheads
from US$4.5 million to US$2.5 million.
-- New executive team appointed in July 2020 with Adonis
Pouroulis, previously Non-Executive Director and the Company
founder, taking over as Acting CEO and both Julian Maurice-Williams
and Duncan Wallace joining the Board as executive directors in
roles of Chief Financial Officer and Technical Director
respectively.
-- Moroccan Country Director, Pierre Raillard appointed and local office opened.
-- Rebranding completed with name changed to Chariot Ltd under
the tagline of "Chariot Transitional Energy" in the post
period.
Outlook:
-- Secure rig in low cost environment, drill appraisal well on
Anchois to confirm resource base and test deeper prospects.
-- Strategic partnering on Lixus to share in risks and rewards
of high value, low risk gas development project with strong ESG
credentials in a fast-growing emerging economy with a clear route
to early monetisation.
-- Progress near-field Anchois tie-back prospects and Rissana area surrounding Lixus.
-- Integration of Transitional Power business, investment in
next project in partnership with Total Eren and development of
500MW pipeline with expected conveyor belt of projects.
-- Evaluate further value-accretive new ventures in energy
transition according to the Company's values.
Adonis Pouroulis, Acting Chief Executive Officer of Chariot,
commented:
"We are now entering an exciting and important phase in the
growth of the Company. The recently completed fundraising will give
us the capital required to turbocharge our growth ambitions and
capitalise on the high value opportunities we see in front of us in
both our transitional gas and transitional power businesses.
At Anchois, we intend to further progress the commerciality of
the licence by drilling an appraisal well. We firmly believe that
Anchois ticks a number of boxes when it comes to key investment
criteria, such as low project risk, robust potential returns and
strong ESG credentials. The focus on transitional energy can be
seen clearly at Anchois, where Chariot has the potential to provide
the Kingdom of Morocco with a domestic source natural gas to power
and industry, enabling the country to achieve its target of
decarbonising its economy and reducing its dependence on imported
fuels. We look forward to commencing with the drilling of a safe,
efficient and cost-effective appraisal well as fast as practically
possible.
The launch of Chariot Transitional Power places the Company in a
unique position in the market. This acquisition will see us work
with our partner, Total Eren, one of the world's largest players in
the renewable energy space, to provide clean, sustainable, and more
competitive energy to operational mines in Africa. A market of
significant scale, that is largely untapped, where Chariot's
management has a deep understanding and high-level commercial
networks. As the AEMP team integrates into Chariot, we look forward
to investment into the next project with Total Eren and further
progress to the strong pipeline of projects in excess of 500MW.
The Board are firmly aligned with shareholders and the Directors
of Chariot have subscribed for a material amount of the recent
Fundraise. This reinforces not only the Board's belief in the
Chariot story, but also its commitment to ensuring that Chariot
achieves the growth targets it sets out."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014, as retained in the UK
pursuant to S3 of the European Union (Withdrawal) Act 2018.
For further information please contact:
Chariot Limited
Adonis Pouroulis, Acting CEO
Julian Maurice-Williams, CFO +44 (0)20 7318 0450
finnCap (Nominated Adviser and Joint Broker)
Christopher Raggett, Simon Hicks, Edward
Whiley +44 (0)20 7220 0500
Peel Hunt (Joint Broker)
Richard Crichton / David McKeown +44 (0)20 7418 8900
Celicourt Communications (Financial PR)
Mark Antelme
Jimmy Lea +44 (0)20 8434 2754
NOTES FOR EDITORS:
About Chariot
Chariot is an African focused transitional energy group with two
business streams, Transitional Gas and Power.
Chariot Transitional Gas, is a high value, low risk gas
development project with strong ESG credentials in a fast-growing
emerging economy with a clear route to early monetisation, delivery
of free cashflow and material exploration upside. Chariot
Transitional Power, looking to transform the energy market for
mining operations in Africa, providing a giant largely untapped
market with cleaner, sustainable, and more reliable power.
The ordinary shares of Chariot Limited are admitted to trading
on the AIM under the symbol 'CHAR'.
Chariot Limited
Chairman's Statement
Chariot has emerged from the challenges presented in the last 18
months as a diversified, transitional energy company with both a
high value gas project in Morocco and an exciting new venture in
renewable hybrid energy focused on Africa.
The Company faced significant macro headwinds in 2020 that
demanded a transition to a lower cost base at the same time
retaining both key skills and operational capabilities. This
reorganization crystallized in July 2020 with significant changes
to the Board and Executive Team in order to thoughtfully evaluate
our portfolio, plans and mission. Through the lens of the
fundamental changes in the global energy landscape, we have
prioritized our activity in Morocco and committed to further
deliver positive transformation in Africa through investment in
projects that are driving the energy revolution. This insight has
both increased momentum to the Anchois gas development and added a
significant focus of the Company to actively pursue investments
that promote the ongoing energy transition.
Twin Pillars of Growth
Chariot Transitional Gas and Chariot Transitional Power have
been brought together under one umbrella. Both are infrastructure
developers in the energy transition space targeting markets with
substantial growth potential and a focus on the African continent.
The businesses are aligned, complementary and underline the
fundamental focus on robust economics and positive impact on the
environment, the countries, and the communities where we
operate.
In Transitional Gas, the core of the portfolio is the high value
Anchois gas discovery on the Lixus Offshore Licence, Morocco. The
Board believes this asset is the core of a broad enterprise
opportunity that has considerable upside potential and is
attractive to a wide range of businesses across the energy value
chain. The dedication, commitment, and adaptability of our team,
despite significant pandemic challenges has resulted in the
acceleration of the Anchois project development timeline.
Consequently, the next critical step to first gas and monetization
of this asset is the drilling of an appraisal well at the end of
2021. This activity will provide crucial information in support of
resource volumes definition and enable, front end engineering
design, finalizing of gas sales agreements, and securing project
finance. With a material foundation at Anchois and long-term growth
potential through infrastructure-led exploration from the existing
portfolio, the Company will also continue to assess other
opportunities in transitional gas and investigate likely
synergies.
In Transitional Power, the Board recognized three primary value
elements in its move to acquire AEMP. First, the purchase brings an
exceptional, highly efficient team with a pipeline of off-grid
renewable and hybrid energy projects serving a relatively untapped
mining market. Thus, Chariot is stepping into this established,
ready-made business in the clean energy space. Second, the
partnership with Total Eren, a leading global player in renewable
energy, means that every aspect of projects under the partnership
are already substantially de-risked to Chariot shareholders before
capital is deployed. So, while we recognise that we are in early
time of our renewable power journey, we can leverage our equity
participation in multiple well founded portfolio projects to
accrete material returns on investment. And finally, Chariot has a
unique competitive advantage with access to a much wider African
mining network through its founder and Acting CEO Adonis Pouroulis.
This has the potential to significantly accelerate development of
our transitional power project pipeline and is a clear benefit of
the transaction.
First-mover advantage
Our decision to raise equity to finance the appraisal well was
crucial to maximize both the ultimate value to the Company and the
control of project development through to first gas production and
cashflow. Company ownership of the large, operated acreage position
at the full equity stake of 75% ensures the flexibility necessary
to bring strategic partners in at the appropriate time. The team
continues to engage with a range of potential partners for
different segments of the project. Based on the quality of the
asset and the scale of the opportunity, we are confident that the
right combination of partnering, timing and scope will be achieved
to maximize shareholder value.
This theme is also illustrated by our entry into the renewable
and hybrid power sector in Africa. The first project between AEMP
and Total Eren, supplying 15MW of solar PV power as part of a
hybrid solar-thermal power solution to the Essakane gold mine in
Burkina Faso, was, at the time of completion, the largest hybrid
PV-HFO power plant in the world and one of the largest solar
facilities in sub-Saharan Africa. This project concept is being
replicated, adjusted, and scaled up for numerous project
applications. By acquiring the AEMP expertise and portfolio,
Chariot is making a low-cost entry to a specific, underserved,
profitable and growing market, at the same time positioning itself
to capture forecasted thematic energy growth trends across the
continent of Africa, it is on note that the population of Africa is
estimated to double to over two billion people during the course of
the next quarter century.
Outlook
The recent recapitalisation of the Company through equity
fundraising means the next 12-24 months will be an exceptionally
busy time as we move to drilling operations offshore Morocco and
look forward to multiple new investment opportunities in African
renewable and hybrid power projects.
The Board chose to subscribe for a significant portion of the
fundraising as we see great value in the highly scalable
transitional gas and power businesses which together hold a bright
future for Chariot. I would like to thank our existing shareholders
and I welcome the new institutions that came onboard as we enter
this new phase of growth and expansion into new markets. Following
the completion of the acquisition of AEMP we also look forward to
working with this new team alongside our new partners at Total Eren
as we aim to deliver on the strategy in place, thereby generating
value accretive returns for all stakeholders.
George Canjar
Chairman
24 June 2021
Chariot Limited
Chief Executive Officer's Review
Building an African-focused transitional energy group
The Covid-19 pandemic in 2020 caused considerable upheaval
globally, affecting every aspect of life in every country and
continent on the planet. The year 2020 was one of great change and
our industry faced increased scrutiny as climate change and
environmental, social & governance ("ESG") principles are now
at the forefront of any energy discussion. A reinvention of the
Chariot "raison d'être" became an absolute necessity for our
survival as our historic business model of pure exploration became
less appealing to the investing community and to our relevance in
this rapidly shifting global energy revolution. I am pleased to say
that the Chariot team grasped the challenges, embraced significant
change and is moving ahead through 2021 firmly on the front foot
with a clear and laser focused strategy. We firmly believe that the
new executive team has the ambition, tenacity and entrepreneurial
spirit to build a Company that can play a leading role in the
largely untapped market of Africa's energy transition.
Africa is predicted to be the driver of world population growth
in the next century with a doubling of its 1.2 billion inhabitants
expected in the next 25 years. This therefore means that the demand
for energy which is both clean, green and sustainable will also
grow significantly. Chariot is in a strong position to contribute
to this energy growth and stands to benefit by virtue of its
presence in both its transitional gas and transitional power
industries which have the potential to grow into highly valuable
businesses. It follows that a key attribute for Chariot
investments, in addition to positive impact, is that our projects
must also be highly scalable. We see this scalability in the
material upside in Lixus with audited total recoverable resources
of around 3 Tcf and the recently announced Rissana licence that
surrounds Lixus, and we also see this in the scale of the mining
power market our renewable and hybrid energy projects will serve.
We are excited to be partnered with Total Eren, a leading global
player in renewable energy and whilst initial focus of projects is
in the mining sector in Africa we expect this partnership to grow
beyond just the mining industry.
The Anchois Gas Development
The Lixus licence, offshore Morocco, contains the significant
Anchois gas discovery for which we are targeting appraisal drilling
in Q4 2021. Since Lixus was awarded to Chariot in 2019, the team
has taken steps to further de-risk the Anchois Gas Development
project from the subsurface through to the gas market, the
construction phase and project financing.
Using the large quantity of legacy 3D seismic data on the block,
in addition to the data from four offset wells, the subsurface team
commissioned a reprocessing study using the latest modern
technology which resulted in significant improvements in both image
quality and in depth control. This led to a resource upgrade, as
announced in September 2020, of audited total remaining recoverable
resource to in excess of 1 Tcf for Anchois, comprising 361 Bcf 2C
contingent resources and 690 Bcf prospective resources in the
deeper prospective gas targets.
Promising subsurface attributes mean that Anchois is a simple
and standard development which has many global analogues. The
development plan from a pre-FEED study consists of two initial
subsea wells tied into a subsea manifold with a 40km offshore
flowline connected to an onshore gas processing facility, from
which a short 40km pipeline connects to the trunk pipeline to
Europe allowing access not only to the growing Moroccan energy
market but also to the European gas market. In order to further
enhance the planning and execution of the development, in February
2021 a collaboration agreement was signed with Subsea Integration
Alliance, the world-leading developer of offshore gas projects, to
progress the front-end design, engineering, procurement,
construction, installation and operation work streams. This
agreement both endorses the project's credentials and helps to
de-risk the execution of the development by collaboration with a
group of top tier service providers.
Morocco provides excellent fiscal terms for domestic projects,
including a 10-year corporate tax holiday from the start of
production. Although Morocco has a large and growing energy market,
it is heavily reliant on imports, and has high established gas
prices. Domestic gas therefore has an important role to play as
Morocco seeks to transition away from its dependency on imported
fuels and promote self-sufficiency. As gas is a cleaner source of
energy than coal, which is used for 67 per cent. of Morocco's
current power generation, a heavier reliance on gas as an energy
source will help to reduce Morocco's carbon footprint
significantly. Anchois has the potential to play a significant role
in Morocco's transition to a low carbon economy as it seeks to
satisfy an anticipated doubling in domestic energy demand over the
next 20 years. The project has highly attractive economics and we
estimate that a base case development with a 70mmscf/d plateau
production rate from the 2C 361 Bcf contingent resource would
deliver net NPV10 of US$500 million and an unlevered internal
investment rate in excess of 30 per cent.
To expedite efforts to secure gas sales agreements and progress
the Anchois project, the broad skillset of the Group's leadership
team was strengthened in October 2020 by the appointment of Pierre
Raillard as Moroccan Country Director. The Gas Market Memorandum of
Understanding with the Ministry of Industry in Morocco, signed in
the post period, has demonstrated the support of key national
institutions and partners for the project, underlining the strong
relationships that the Company continues to build upon.
There are a number of options open to the Company in financing a
development and we are encouraged by the support and endorsement
received in Q4 2020 firstly from the African Finance Corporation
("AFC") and secondly from a major Multinational Investment Bank
with global reach and profound market expertise within the EMEA
region. With all the elements progressing the next step in the
project is for an appraisal well to unlock the development.
Appraisal drilling: Fast-tracking to development and production
in Morocco
The Anchois appraisal well will have three distinct objectives:
firstly to reconfirm the original discovery A&B sands; secondly
to provide a producer well location to be suspended for future use;
thirdly to potentially drill the additional prospective sands and
potentially establish a larger resource base for longer term
growth.
Given the challenging market conditions faced in the small-cap
independent sector and given our clear line of sight to first gas,
it is now more vital than ever that we act to elevate ourselves to
becoming a company that is closer to revenues and positive
cashflow. As a result of the current availability of reasonably
inexpensive rigs there is an opportunity to accelerate to the next
level on the project plan at a relatively low cost. Equally
important is the opportunity to bring Anchois gas to market sooner,
which in the near term aligns with demand and interest from
off-takers in the Moroccan power and industrial sectors. We have
therefore acted to fund the drilling of the Anchois appraisal well
towards the end of 2021 so that we can capture and maintain this
project momentum. By operating the appraisal drilling ourselves,
with the same team that achieved an industry benchmark low cost
well in 2018 in Namibia, we remain in control of the fast-track
timeline and are able to capitalise on the enthusiastic support the
project is garnering in Morocco.
Our efforts to partner have been encouraging and we continue
these discussions in parallel with the drilling campaign with the
hope that this interest is crystallised into value accretion for
Chariot. It must be stressed however that Chariot is in a strong
position to undertake this drilling campaign alone leaving
operations firmly under our control. Sticking to this accelerated
timeline preserves value in the asset and with our recently
bolstered balance sheet we enter into partnering negotiations from
a position of strength. We believe preservation at the asset equity
level is value accretive and as a material participant in the
recent fundraise along with my fellow Board members our interests
continue to be firmly aligned with all stakeholders. We remain
grateful for the support we continue to receive from our partners
in the Kingdom of Morocco and we are mindful of the opportunity
given to us to make this project work in the right timeframe in
order to maximise returns for all stakeholders and deliver
Morocco's first offshore natural gas development.
Differentiator in Clean Power
In the post period Chariot completed the acquisition of AEMP, a
renewable and hybrid energy project developer with an ongoing
strategic partnership with Total Eren, a leading player in
renewable energy. Under the joint venture with Total Eren, Chariot
has the right to invest in up to 15 per cent. project equity at
cost in projects ranging in size and currently, in aggregate, make
up a pipeline of 500MW of power.
Chariot's unique offering is its large network of affiliated
companies through the Pella Group with operations in 17 countries,
predominantly in mining, that can be leveraged to deploy projects
into the Transitional Power business and rapidly grow the pipeline
above the already large 500MW. This is a synergistic opportunity to
introduce Chariot's network of business interests on the African
continent to an established team and pipeline of projects in
partnership with Total Eren.
With this acquisition under our new Transitional Power business
stream we have made a strategic entry into a market with high
growth potential. The World Bank estimated the size of sub-Saharan
mining power demand to be in excess of 20GW in 2020, an order of
magnitude greater than the already material acquired pipeline of
500MW. Many of the world's top mining companies are embedding CO(2)
reduction into more sustainable mining plans and as a consequence
are setting ambitious targets and commitments to meet their
electricity needs through clean energy sources. Investors are
increasingly looking at the ESG performance of the mines in which
they invest, including impact on the communities, water sources,
and carbon emissions. ESG performance is now listed as one of the
main risks for the mining industry, so most mines will consider
using power from renewable sources to decrease their carbon
footprint. Many mines are off-grid and require substantial
dedicated power sources which until recently have required carbon
intensive heavy fuel oil to be trucked over large distances.
The experienced AEMP team is joining Chariot and has a proven
track record of delivery, with the first project already in
operation, being the largest solar hybrid plant in Africa, at the
Essakane gold mine in Burkina Faso, successfully completed and
currently generating returns providing proof of concept.
Outlook
We are enthused as we look ahead to an operated appraisal well
on Anchois at the end of this year yet cognisant of the hard work
ahead in maintaining project momentum across all workstreams and
our two business units. We are also looking forward to working with
our partners in Morocco, Namibia and the new countries we will
enter in our partnership with Total Eren. The new Transitional
Power team is already innovating and adding value to Chariot.
We have embarked on a new course that has its own set of unique
challenges and obstacles but the size of the prize and the positive
impact our new business plan will have in the countries and
communities in which we operate in Africa makes the challenge all
the more inspiring. Whilst we set sail in this new direction for
Chariot, the path of energy transition will not always be smooth
and further change may be needed, however the dedication of the
Chariot team remains steadfast in achieving our mission of being
part of and contributing to the energy revolution which is underway
at a pace.
We thank you for your continued support and hope you enjoy this
exciting journey with us.
Adonis Pouroulis
Acting Chief Executive Officer
24 June 2021
Chariot Limited
Chief Financial Officer's Review
Funding and Liquidity as at 31 December 2020
The Group entered 2021 with cash of US$3.7 million as at 31
December 2020 (31 December 2019: US$9.6 million), no debt or
remaining work programme commitments. The equity fundraising
announced post year-end of US$23 million means the Group is
capitalised to execute its strategy to both monetise the high value
Anchois gas discovery and expand its highly scalable Transitional
Power stream.
The extensive cost reduction programme in the first half of 2020
reduced the Company's annual cash overhead to c.US$2.5 million
which has enabled us to move forward with a lower cost base and
leaner foundation whilst still retaining our operational
capability.
During 2020, the Group continued to develop its portfolio and
business by investing c.US$6 million into its exploration portfolio
and administration activities (31 December 2019: c.US$10 million)
primarily in the Lixus licence in Morocco.
As at 31 December 2020, US$0.5 million of the Group's cash
balances were held as security against licence work commitments.
The decrease from US$0.7 million at 31 December 2019 was due to the
release of Moroccan bank guarantees.
Financial Performance - Year Ended 31 December 2020
The Group's loss after tax for the year to 31 December 2020 was
US$70.6 million, which is US$66.5 million higher than the US$4.1
million loss incurred for the year ended 31 December 2019. The vast
majority of this increase in the annual loss is due to an
impairment charge of US$66.7 million recorded against the full book
value of Namibian and Brazilian exploration assets in the first
half of the year. This equates to a loss per share of US$(0.19)
compared to a loss per share of US$(0.01) in 2019.
The share based payments charge of US$0.2 million for the year
ended 31 December 2020 was US$0.5 million lower than the US$0.7
million in the previous year due to the vesting of historic
employee and Directors' deferred share awards.
Other administrative expenses of US$3.7 million for the year
ended 31 December 2020 is slightly higher than US$3.4 million in
the prior year reflecting one-time restructuring costs incurred in
the period which are expected to decrease annual cash overhead from
c.US$4.5 million to c.US$2.5 million.
Finance income of US$0.5 million (31 December 2019: US$0.2
million) relates to the holding of higher cash balances in Sterling
to meet administrative expenses in the current year resulting in
higher foreign exchange gains. Finance expenses of less than US$0.1
million (31 December 2019: US$0.2 million) reflect the unwinding of
the discount on the lease liability under IFRS 16.
The tax expense of less than US$0.1 million in the year to 31
December 2020 (31 December 2019: less than US$0.1 million) relates
to Brazilian taxation levied on interest income.
Exploration and Appraisal Assets as at 31 December 2020
In light of the challenging business environment which has been
further compounded by the impact of Covid 19, our exploration
activities in both Namibia and Brazil have been assessed as
non-core with any potential future value to be derived from
drilling of offset wells by third parties nearby, which are
anticipated in the near term. The Company retains the Central
Blocks, Namibia and BAR-M Blocks, Brazil and will continue to host
data-rooms for potential partnering. The carrying value of the
Group's exploration and appraisal assets has therefore decreased by
US$65.5 million to US$12.8 million from US$78.3 million as at 31
December 2019, with the US$66.7 million impairment of Namibian and
Brazilian exploration assets being offset being offset by US$1.2
million investment into the Lixus licence in Morocco to focus on
and progress the Anchois gas development.
Other Assets and Liabilities as at 31 December 2020
Having provided fully against the remaining value of inventory
from its earlier drilling campaigns, the remaining items were
disposed of for scrap value in the second half of the year
resulting in a charge of US$0.5 million to the income
statement.
As at 31 December 2020, the Group's net balance of current trade
and other receivables and current trade and other payables shows a
net current liability position of US$0.2 million (31 December 2019:
US$1.8 million) with the decrease primarily due to reduction in
overhead payables and settlement of outstanding payables for
seismic reprocessing studies on the Lixus licence.
Under IFRS 16 the Group has recognised a depreciating right-of
use asset of US$0.7 million (31 December 2019: US$1.0 million) and
a corresponding lease liability based on discounted cashflows of
US$0.8 million (31 December 2020: US$1.2 million), with the
decreases explained by depreciation and rental commitments paid
that are partially offset by unwinding of the discount on the lease
liability.
Outlook
Two highly regarded institutional lenders expressed their
interest to provide debt finance to the development of Anchois,
recognising the project has strong ESG credentials as well as being
a highly scalable opportunity with bankable economic fundamentals.
We will look to build on these discussions as the appraisal
operations progress as well as continue to seek strategic partners,
potentially with Moroccan parties.
The recently completed fundraise in June 2021 of US$23 million
means Chariot is funded to drill an appraisal well on Anchois at
the end of 2021 as operator. The same team that executed the 2018
drilling campaign on time and significantly under budget is being
assembled and we look forward to the operation of a safe, efficient
and cost effective well. Being funded to proceed on the fast-track
timeline to first gas maximises project value but also enables
greater flexibility in forthcoming negotiations with strategic
partners, which ultimately protects shareholder value.
The Board has considered scenarios where there is insufficient
cash to complete these planned, but uncommitted expenditures. Based
on these forecasts the Board has determined that as the timing of
these expenditures are within the Company's discretion, they have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future.
Julian Maurice-Williams
Chief Financial Officer
24 June 2021
Chariot Limited
Technical Director's Review of Operations
Morocco: Appraisal & Development - Lixus Offshore (75%
Chariot (Operator), 25% ONHYM (carried interest))
Overview
Chariot's key asset, the Lixus Offshore licence in Morocco, was
secured in 2019. This licence area contains the Anchois gas
discovery (made by Repsol in 2009) which contains 361 Bcf of 2C
Contingent Resources as independently assessed by NSAI and
represents a high value gas appraisal and development project which
is on track to be drilled in Q4 2021.
The Anchois discovery was made in high quality reservoirs and
with a favourable gas composition which together facilitate a
development solution underpinned by conventional technology with
delivery of gas into a growing market with strong established
prices. Importantly the gas bearing reservoirs are directly imaged
on seismic data, and the resulting calibration of this data helps
not only to evaluate the extent of the known gas resource with
confidence, but also to describe a significant and low risk
portfolio of analogous exploration prospects.
As part of the rationale for the Lixus Offshore licence
application, the team recognised the potential for a commercial
development of the Anchois discovery in a lower cost environment,
supported by a maturing local gas market, along with substantial
remaining exploration potential in the same play. With the support
of our local partner ONHYM, we were able to quickly secure the
acreage under excellent terms and begin our evaluation with a
comprehensive dataset of 2D and 3D seismic data, well data and our
regional expertise built across various projects in-country since
2013.
To date, in the initial licence phase, Chariot has reprocessed
in excess of 1,400 km(2) 3D PSDM seismic data and 1,000 km 2D
seismic data. This work, along with various regional and
geophysical studies, has enabled Chariot to mature the portfolio
and further assured the team in the significant resource potential
of the licence area.
Subsurface
The Anchois discovery was made in Tertiary aged turbidite
reservoirs, deposited in a deepwater mini-basins, developed above
the pre-Rifaine nappe (or Olistostrome) that formed during the
Alpine orogeny as Africa and Europe collided. Gas was discovered in
two sands, Gas Sands A and B, which both recorded gas columns of
approximately 50m, with 22m and 33m of net gas pay respectively.
These reservoir sands exhibit excellent petrophysical properties
with porosity averages ranging from 26% to 28% and sampling in Gas
Sand B demonstrated the potential for multi-Darcy permeability. The
gas-bearing reservoirs have distinctive seismic signatures with
bright, high amplitudes and far-offset (AVO) seismic anomalies,
which increase the confidence in the lateral extent of those sands
away from the discovery well location.
Based on the legacy 2010 PSTM 3D seismic data, an Independent
Estimate of the Contingent Resources associated to the Anchois
discovery by NSAI in 2019 was 156 Bcf of 1C (or Proven) resources,
307 of 2C (or Probable) resources and 433 Bcf of 3C (or Possible)
resources. Following the 2020 3D seismic reprocessing campaign, the
1C resource assigned to the Anchois discovery was revised to 201
Bcf, the 2C resource revised to 361 Bcf and the 3C resource to 550
Bcf; these numbers were also independently audited by NSAI. This
uplift in resources provided greater confidence in the
commerciality of the discovered gas resources.
In addition to the description of the gas discovered in the
well, Chariot's team also identified 3 prospective undrilled gas
sands, with similar distinctive seismic attributes to the discovery
sands that would offer low risk exploration upside adjacent to the
discovery well. The C and M sand targets in Anchois Deep are at
approximately the same elevation to where thin gas bearing sands
were identified in the discovery well. This well also established
very good reservoir properties in the M sand, albeit water-bearing
in a down-dip location. Finally, the O sand reservoir provides
prospective resource in both Anchois Deep prospect and the adjacent
Anchois Footwall structural prospect. Again, NSAI performed an
independent estimation on the resource potential of these
reservoirs, resulting in a total best estimate (2U) of 690 Bcf of
prospective resources across these targets, which could be
cost-effectively tested in combination with appraisal or
development drilling on the Anchois field.
Drilling Appraisal
The primary objective of the planned Anchois Appraisal programme
is to unlock development of the A & B Sands by confirming the
gas resource volumes, reservoir quality and well productivity
required to underpin the development of the field. The second
objective is for the well to provide an optimised production
location; by suspending it for future re-entry and completion as a
producer well in the field development plan. This surface location
is likely to serve as an optimised site for subsea infrastructure
and top-hole location for additional producers in the same part of
the field. The third and final objective of the programme is to
explore other prospective sands by deepening the well into the C, M
& O reservoirs to directly unlock additional gas resources in
Anchois and to also de-risk adjacent prospects by providing further
calibration of the seismic data.
Development Concept
Chariot has further matured the subsea-to-shore development
concept for the Anchois gas field, through pre-FEED studies
performed with Xodus, an engineering consultancy owned by Subsea 7.
This work validated the concept and, thanks to the favourable
subsurface conditions, has identified the possibility to use
standardised technology and to optimise costs. The excellent
reservoir properties will allow producer wells to produce gas at
high rates, which reduces the number of initial producer wells
required and therefore reduces the associated drilling and
completion costs and subsea complexity. The excellent gas quality,
without impurities such as carbon dioxide or hydrogen sulphide,
means that standard materials and technology can be used for the
flowline and processing facility. Again, this keeps costs down and
also shortens the lead time be reducing up-front engineering and
shortening the procurement cycle. Chariot intends to continue
discussions with engineering providers to ensure that any
development of Anchois can be achieved in a cost-effective and
timely manner. The pre-FEED study focused on an initial development
with two subsea producers tied to an onshore Central Processing
Facility ('CPF'), with a capacity to process 70 mmscfd. From the
CPF an onshore pipeline connects to the Maghreb-Europe Gas
Pipeline, giving access to both Moroccan domestic markets and
export routes into Spain. This work reduces the estimated initial
CAPEX by approximately 30% versus the feasibility studies performed
in 2019, which has a direct positive impact on the economics of the
project. Domestic markets in Morocco offer attractive gas prices to
both the industrial and power markets and the Company is
progressing discussions with various potential gas offtake
customers ahead of appraisal drilling on the Anchois gas field. The
large Spanish market provides the scale and opportunity to sell any
surplus gas above domestic requirements and for additional
prospective resources to be monetised quickly once they are
discovered.
Gas Market and Financing
Primary energy demand in Morocco has doubled since the year 2000
and is forecast to double again from 2015 to 2030. In terms of
power generation, imported fossil fuels dominate, with Morocco
relying on imports for over 90% of its primary energy needs. Since
the construction of the Maghreb-Europe Pipeline ("GME") in 2004,
Morocco has been importing gas from Algeria for power generation
with domestic based Ain Beni Mathar and Tahaddart power stations
consuming around 100 mmscfd since 2012. The Moroccan government has
been working on policies designed to improve security of supply, to
provide industries access to cleaner energy at a low cost, and to
minimise the environmental impact of its energy mix. As part of
this process, gas has been a major factor in its vision, including
the possibility of imported LNG and the construction of further
power infrastructure. Clearly indigenous Moroccan gas, such as that
from an Anchois Field development, has the ability to fuel these
existing and planned CCGT power stations (thus displacing the need
to import gas from Algeria), reduce the volumes required from
imported LNG projects, switch expensive and underutilised fuel oil
power stations to gas and to reduce dependency on imported coal.
Over and above power projects, there is a proven fast-growing
industrial demand for gas with prices already established in the
region of US$10-11/mcf. Once a material gas resource such as
Anchois is connected to an industrial region such as that of
Morocco's Atlantic coast, with the stretch from Kenitra to
Casablanca adjacent to Anchois representing 62% of Morocco's GDP,
it is anticipated that industrial gas consumption will grow
significantly, through a variety of possible delivery networks such
as piped gas and virtual pipelines utilising Liquified Natural Gas
("LNG") or Compressed Natural Gas ("CNG"). This will allow
industrial customers to switch from other more expensive fuels such
as fuel oil and imported Liquefied Petroleum Gas ("LPG").
Furthermore, with a connection to the GME pipeline, for which
ownership transitions to Morocco in 2021, surplus gas from the
Anchois Field development could potentially be exported to the
Iberian Peninsula, highlighting the project's flexibility in
commercial options. Lixus boasts excellent contract terms in what
is widely known internationally to be a favourable fiscal
environment. There is a 10-year corporate tax holiday from the
commencement of production and a low 3.5% royalty on gas produced
offshore at the water depth of the Anchois discovery, with ONHYM
paying their 25% share of the development. The 10-year tax holiday
is an important incentive to encourage the initiation of a domestic
offshore gas supply.
In October 2020, Chariot announced an Expression of Interest
("EOI") from Africa Finance Corporation ("AFC"), a pan-African
Multilateral Development Financial Institution, for the provision
of development debt finance for the Anchois Gas Discovery. An EOI
was also received for the provision of Reserves Base Lending for
the development of Anchois with a Multinational Investment Bank.
Both EOIs take into account the estimated capex required to bring
the development online, anticipated to be in the region of US$300
million, but they also identify Lixus as being an important
strategic asset, with strong ESG credentials, that has the
potential to help Morocco transition to a low carbon economy, as it
seeks to satisfy an anticipated doubling in domestic demand for
energy over the next 20 years.
Lixus Extended Portfolio
With lessons learnt from the work on Anchois, additional
prospects surrounding the Anchois discovery that share the same
reservoir systems and possess very similar seismic attributes were
identified on the 3D PSDM seismic data. Anchois and its satellites
are an amplitude and AVO supported discovery and prospect inventory
with remaining recoverable resources in combination in excess of
1.5 Tcf, as independently estimated by NSAI in 2020. This portfolio
is within a 10km radius of the planned Anchois subsea production
infrastructure, demonstrating a potentially high-value, low risk
and material resource base for growth in the medium term.
In addition to the satellites, five further exploration
prospects (Turbot, Tombe, Maquereau North, Maquereau Central and
Maquereau South) were identified on the 3D PSTM and independently
estimated by NSAI within the same play in 2019. These prospects
offer the potential to be additional production centres beyond the
Anchois area for the longer term, in the case of successful
exploration drilling, and contribute to a total remaining 1.2 Tcf
2U prospective resources.
Beyond the potential captured in the independently estimated
portfolio, the exploration team are continually maturing
exploration play systems across the newly reprocessed 3D PSDM
seismic data and have identified new prospects since the most
recent audit that are estimated to contribute an additional >1.5
Tcf to the portfolio. The licence also contains other play systems
including both a shallower gas play within the younger Pliocene
reservoir systems and a high risk, high reward play in the Mesozoic
reservoirs, trapped in large thrusted structures of the sub-nappe
section which have only been unveiled thanks to the improvements in
image quality from the seismic reprocessing project.
Forward Plan 2021/22
-- Detailed well engineering, complete tendering on rig and
logistics services, accelerate operational planning for operated
appraisal drilling in Q4 2021
-- Mature the gas commercialisation opportunities, development
plan, drilling preparatory work and strategic alliances to progress
funding solutions
-- Continued evaluation of the PSDM reprocessing and depth
conversion techniques to further refine the understanding of the
Anchois discovery and identification of further exploration
opportunities within the shallow low-risk gas play
-- Develop regional understanding in order to mature the
potentially giant-scale targets in the sub-nappe play
-- Identify and evaluate new venture opportunities to expand the
Transitional Gas portfolio and continue to provide cleaner energy
solutions to developing countries across Africa
Exploration Portfolio:
Rissana Offshore
In 2020, Chariot announced the agreement of key terms on the new
Rissana Offshore licence in Morocco. The formal award of the
licence is expected in the second half of 2021, subject to Moroccan
regulatory procedures and approvals. The licence will surround the
offshore boundaries of Chariot's existing Lixus Offshore Licence,
as well as covering the most prospective northern areas of the
previously held Mohammedia Offshore and Kenitra Offshore licences.
Chariot will hold a 75% interest and operatorship in partnership
with ONHYM which will hold a 25% interest.
Following relinquishment of Mohammedia Offshore and Kenitra
Offshore, the prospective areas already covered by 3D seismic data
will be incorporated into the Rissana licence. This provides
material potential running room in various plays including the
Mio-Pliocene gas play surrounding the Lixus licence, on-trend with
the Anchois Gas Discovery, and the Mesozoic play including
prospects inherited from the legacy portfolio as well as new
exploration targets.
Initial minimum licence commitment is the acquisition of a 2D
seismic survey, over a portion of the acreage, which will help to
evaluate the extension and potential of these plays across
Rissana.
Brazil
Chariot has fulfilled the current period commitments on its
acreage in the Barreirinhas basin, with drill ready targets under
evaluation for potential drilling in the next phase of the licence.
Multiple third party well commitments across the basin remain and
the results of any operations are anticipated to help deliver key
information regarding Chariot's acreage. Amongst these, Petrobras
are expected to drill first on the Guajuru prospect.
In an underexplored deepwater basin, the results from these
wells will be important in revealing the exploration potential of
the basin and de-risking a portfolio of >1.4Bnbbls of
(unaudited) estimated prospective resource.
Namibia
Following the drilling of the Prospect S exploration well in
2018, which fulfilled the work commitments in the current licence
period of the PEL-71 licence and post-well evaluation studies have
been completed.
The industry anticipates that between 2 and 4 exploration wells
will be drilled offshore Namibia in the near-term, including wells
on the Venus (Total) and Graff (Shell) prospects. We continue to
mature our understanding of the potential of our Namibia acreage
and host data rooms for potential farminees, whilst we await
results from nearby drilling which may help to de-risk the
remaining prospectivity in our Namibian exploration portfolio.
Duncan Wallace
Technical Director
24 June 2021
Chariot Limited
Transitional Power: Investment into New Renewable and Hybrid
Power Developer
AEMP acquisition
On 23 March 2021, Chariot announced the acquisition of AEMP, a
renewable and hybrid energy project developer with an ongoing
strategic partnership with Total Eren, a leading player in
renewable energy. Total S.A., the French multinational energy
company, has a direct and indirect shareholding of approximately
30% in Total Eren. AEMP and Total Eren (the "Partners") are
initially looking to provide clean, sustainable, and more reliable
energy to operational mines in Africa, which represents a largely
untapped market in which the Board has numerous high-level
contacts.
Strategic partnership with Total Eren
Under the joint venture with Total Eren, Chariot has the right
to invest in up to 15% project equity at cost in projects developed
by the Partners and the Group currently recovers its overhead costs
as part of the partnership, providing an immediate post-acquisition
revenue stream to finance ongoing costs. To date, the Partners have
built a pipeline of 500MW of African mining power projects and the
Group will seek to grow and deploy more projects into this
pipeline, going beyond mining into other industries, state-owned
enterprises and governments across Africa.
Essakane Project
The Partner's first project, supplying 15MW of solar PV power as
part of a hybrid solar-thermal power solution to the Essakane gold
mine in Burkina Faso, was at the time of completion the largest
hybrid PV-HFO power plant in the world and one of the largest solar
facilities in sub-Saharan Africa with 130,000 solar panels. Chariot
holds 10% project equity through the AEMP acquisition, with Total
Eren holding the remaining 90%. The solar PV power decreases the
mine's fuel consumption by approximately 6 million litres per year
and reduces its annual CO(2) emissions by nearly 18,500 tons, thus
supplying an off-grid gold mine with competitive and carbon-free
electricity. The AEMP team was involved in all stages of the
project from origination of the mine, including: designing the size
and determining the operating philosophy of the hybrid power plant;
obtaining local authorisations and permits; selection of the
engineering, procurement and construction contractor; financing;
and, operating post-completion. The project's successful completion
and generation of returns provide proof of concept and a valuable
showcase from which replication and scale-up is anticipated. The
combined competitiveness of solar energy with this ESG impact is
creating a vast market for clean energy solutions in Africa, and
Chariot intends to replicate this Essakane model across the
pipeline to meet our key value of positive impact on all our
projects, supporting clients in strengthening their ESG performance
and their social licence to operate.
Management team
The experienced team of Benoit Garrivier and Laurent Coche, the
founders of AEMP, will join Chariot to lead the transitional power
business. The Board welcomes both Benoit and Laurent into Chariot's
innovative and dynamic management team and look forward to working
with Total Eren in partnership to deliver highly attractive
projects in an exciting growth market, providing clean energy
solutions across the continent of Africa.
Chariot Limited
Consolidated Statement of Comprehensive Income for the Year
Ended 31 December 2020
Year ended Year ended
31 December 31 December
2020 2019
Notes US$000 US$000
Share based payments 20 (222) (651)
Loss on disposal of inventory 13 (524) -
Im pairment of exploration
asset 10 (66,666) -
Other administrative expenses (3,678) (3,395)
-------------------------------------- ------ -------------- --------------
Total operating expenses (71,090) (4,046)
-------------------------------------- ------ -------------- --------------
Loss from operations 4 (71,090) (4,046)
Finance income 6 543 190
Finance expense 6 (72) (183)
-------------------------------------- ------ -------------- --------------
Loss for the year before taxation (70,619) (4,039)
Tax expense 8 (1) (11)
-------------------------------------- ------ -------------- --------------
Loss for the year and total
comprehensive loss for the
year attributable to equity
owners of the parent (70,620) (4,050)
-------------------------------------- ------ -------------- --------------
Loss per Ordinary share attributable 9 US$(0.19) US$(0.01)
to the equity holders of the
parent - basic and diluted
-------------------------------------- ------ -------------- --------------
All amounts relate to continuing activities.
The notes form part of these financial statements.
Chariot Limited
Consolidated Statement of Changes in Equity for the Year Ended
31 December 2020
Share based Total
payment Foreign attributable
Share Share Contributed reserve exchange Retained to equity
capital premium equity reserve deficit holders of
the parent
US$000 US$000 US$000 US$000 US$000 US$000 US$000
---------------- ------------ ------------ ------------- ------------ ------------ ------------ -------------
As at 1 January
2019 6,264 356,336 796 4,928 (1,241) (277,124) 89,959
Loss and
Total
comprehensive
loss for the
year - - - - - (4,050) (4,050)
Share based
payments - - - 651 - - 651
Transfer of
reserves due
to issue of
share awards 4 167 - (171) - - -
As at 31
December 2019 6,268 356,503 796 5,408 (1,241) (281,174) 86,560
---------------- ------------ ------------ ------------- ------------ ------------ ------------ -------------
Loss and
total
comprehensive
loss for the
year - - - - - (70,620) (70,620)
Share based
payments - - - 222 - - 222
Transfer of
reserves due
to issue of
share awards 281 3,106 - (3,387) - - -
Transfer of
reserves due
to lapsed
share options - - - (796) - 796 -
Transfer of
reserves - - - - 1,241 (1,241) -
As at 31
December 2020 6,549 359,609 796 1,447 - (352,239) 16,162
---------------- ------------ ------------ ------------- ------------ ------------ ------------ -------------
The following describes the nature and purpose of each reserve
within owners' equity.
Share capital Amount subscribed for share capital at nominal value.
Share premium Amount subscribed for share capital in excess of
nominal value.
Contributed equity Amount representing equity contributed by the
shareholders.
Share based payments reserve Amount representing the cumulative
charge recognised under IFRS2 in respect of share option, LTIP and
RSU schemes.
Foreign exchange reserve Foreign exchange differences arising on
translating into the reporting currency.
Retained deficit Cumulative net gains and losses recognised in
the financial statements.
The notes form part of these financial statements.
Chariot Limited
Consolidated Statement of Financial Position as at 31 December
2020
31 December 31 December
2020 2019
Notes US$000 US$000
Non-current assets
Exploration and appraisal costs 10 12,822 78,264
Property, plant and equipment 11 43 94
Right of use asset 15 655 983
----------------------------------- ------ ------------ ------------
Total non-current assets 13,520 79,341
----------------------------------- ------ ------------ ------------
Current assets
Trade and other receivables 12 811 781
Inventory 13 - 524
Cash and cash equivalents 14 3,740 9,635
----------------------------------- ------ ------------ ------------
Total current assets 4,551 10,940
----------------------------------- ------ ------------ ------------
Total assets 18,071 90,281
----------------------------------- ------ ------------ ------------
Current liabilities
Trade and other payables 16 1,060 2,535
Lease liability: office lease 15 409 366
----------------------------------- ------ ------------ ------------
Total current liabilities 1,469 2,901
----------------------------------- ------ ------------ ------------
Non-current liabilities
Lease liability: office lease 15 440 820
Total non-current liabilities 440 820
----------------------------------- ------ ------------ ------------
Total liabilities 1,909 3,721
----------------------------------- ------ ------------ ------------
Net assets 16,162 86,560
----------------------------------- ------ ------------ ------------
Capital and reserves attributable
to equity holders of the parent
Share capital 17 6,549 6,268
Share premium 359,609 356,503
Contributed equity 796 796
Share based payment reserve 1,447 5,408
Foreign exchange reserve - (1,241)
Retained deficit (352,239) (281,174)
----------------------------------- ------ ------------ ------------
Total equity 16,162 86,560
----------------------------------- ------ ------------ ------------
The notes form part of these financial statements.
The financial statements were approved by the Board of Directors
and authorised for issue on 24 June 2021 .
George Canjar
Chairman
Chariot Limited
Consolidated Cash Flow Statement for the Year Ended 31 December
2020
Year ended Year ended
31 December 31 December
2020 2019
US$000 US$000
Operating activities
Loss for the year before taxation (70,619) (4,039)
Adjustments for:
Loss on disposal of inventory 524 -
Impairment of exploration asset 66,666 -
Finance income (543) (190)
Finance expense 72 183
Depreciation 387 401
Share based payments 222 651
Net cash outflow from operating
activities before changes in working
capital (3,291) (2,994)
(Increase) / decrease in trade and
other receivables (34) 1,036
(Decrease) / increase in trade and
other payables (728) 930
Cash outflow from operating activities (4,053) (1,028)
Tax payment (1) (11)
Net cash outflow from operating
activities (4,054) (1,039)
-------------------------------------------- -------------- --------------
Investing activities
Finance income 29 217
Payments in respect of property,
plant and equipment (8) (67)
Payments in respect of exploration
assets (1,971) (8,828)
Net cash outflow used in investing
activities (1,950) (8,678)
-------------------------------------------- -------------- --------------
Financing activities
Payments of lease liabilities (337) (287)
Finance expense on lease (72) (97)
-------------------------------------------- -------------- --------------
Net cash outflow from financing
activities (409) (384)
-------------------------------------------- -------------- --------------
Net decrease in cash and cash equivalents
in the year (6,413) (10,101)
Cash and cash equivalents at start
of the year 9,635 19,822
Effect of foreign exchange rate
changes on cash and cash equivalents 518 (86)
Cash and cash equivalents at end
of the year 3,740 9,635
-------------------------------------------- -------------- --------------
The notes on form part of these financial statements.
Chariot Limited
Notes forming part of the financial statements for the year
ended 31 December 2020
1 General information
Chariot Limited is a company incorporated in Guernsey with
registration number 47532. The address of the registered office is
Oak House, Hirzel Street, St Peter Port, Guernsey, GY1 2NP. The
nature of the Company's operations and its principal activities are
set out in the Report of the Directors and in the Technical
Director's Review of Operations.
2 Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and IFRIC
interpretations, as issued by the International Accounting
Standards Board (IASB), as adopted by the European Union.
In accordance with the provisions of section 244 of the
Companies (Guernsey) Law, 2008, the Group has chosen to only report
the Group's consolidated position, hence separate Company only
financial statements are not presented.
The financial statements are prepared under the historical cost
accounting convention on a going concern basis.
Going concern
During 2020, the directors responded to the market uncertainty
related to COVID-19 and commodity price weakness through performing
a restructuring to reduce annual running costs. As at 31 December
2020 the Group had cash of US$3.7 million and no debt or
commitments.
In June 2021 an equity fundraise completed which raised US$18.8
million with a further US$4.2 million underwritten by Magna Capital
LDA (of which the CEO, Adonis Pouroulis is a substantial
shareholder). At the date of this report not all the cash from the
equity fundraise has been received.
The Directors have reviewed the cash-flow projection for the
Group to consider if it has sufficient finance in place to meet its
financial commitments for at least 12 months.
The Group is currently looking to secure a rig to perform
appraisal drilling at Anchois, which is planned to occur in Q4
2021. In addition, the Group is planning to progress its work
programme on the acreage surrounding Anchois. The Company continues
to focus on partnering at Lixus, as well to progress its renewable
business across mines in Africa and the Board has the reasonable
expectation of generating future value and cash from this strategy.
The Board has considered scenarios where there is insufficient cash
to complete these planned, but uncommitted expenditures. Based on
these forecasts the Board has determined that as the timing of
these expenditures are within the Company's discretion, they have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future.
For these reasons, the Directors continue to adopt the going
concern basis in preparing the Annual Report and Accounts.
New Accounting Standards
The following new standards and amendments to standards are
mandatory for the first time for the Group for the financial year
beginning 1 January 2020. The implementation of these standards and
amendments to standards has had no material effect on the Group's
accounting policies.
Standard Effective year
commencing on
or after
IFRS 3: Definition of a Business (Amendments 1 January 2020
to IFRS 3)
---------------
IAS1, IAS8: Definition of Material (amendments 1 January 2020
to IAS1 and
IAS 8)
---------------
Amendments to References to the Conceptual 1 January 2020
Framework in IFRS Standards
---------------
IFRS 16 - Leases
Under IFRS 16 lease liabilities are initially measured at the
present value of the remaining lease payments and discounted using
an incremental borrowing rate at the date of recognition.
Associated right-of-use assets are measured at an amount equal to
the lease liability adjusted for any prepaid or accrued lease
payments.
Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to profit or loss over
the lease period to produce a constant periodic rate of interest on
the remaining balance of the liability for each period. The
right-of-use asset is depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis.
The Group has elected not to recognise right-of-use assets and
liabilities for leases where the total lease term is less than or
equal to 12 months, or for leases of low-value assets. Low-value
assets comprise IT equipment and small items of office furniture.
Payments associated with short-term leases and leases of low-value
assets are recognised on a straight-line basis as an expense in
profit or loss.
Further details on the lease liability can be found in note
15.
Exploration and appraisal costs
All expenditure relating to the acquisition, exploration and
appraisal of oil and gas interests, including an appropriate share
of directly attributable overheads, is capitalised within cost
pools.
The Board regularly reviews the carrying values of each cost
pool and writes down capitalised expenditure to levels it considers
to be recoverable. Cost pools are determined on the basis of
geographic principles. The Group currently has three cost pools
being Central Blocks in Namibia, Morocco and Brazil. In addition
where exploration wells have been drilled, consideration of the
drilling results is made for the purposes of impairment of the
specific well costs. If the results sufficiently enhance the
understanding of the reservoir and its characteristics it may be
carried forward when there is an intention to continue exploration
and drill further wells on that target.
Where farm-in transactions occur which include elements of cash
consideration for, amongst other things, the reimbursement of past
costs, this cash consideration is credited to the relevant accounts
within the cost pools where the farm-in assets were located. Any
amounts of farm-in cash consideration in excess of the value of the
historic costs in the cost pools is treated as a credit to the
Consolidated Statement of Comprehensive Income.
Inventories
The Group's share of any material and equipment inventories is
accounted for at the lower of cost and net realisable value. The
cost of inventories comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
Taxation
Income tax expense represents the sum of the current tax and
deferred tax charge for the year.
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial statements and
the corresponding tax bases, and is accounted for using the balance
sheet liability method. Deferred tax liabilities are recognised for
all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that have been
enacted or substantively enacted and are expected to apply in the
year when the liability is settled or the asset realised. Deferred
tax is charged or credited to the Consolidated Statement of
Comprehensive Income, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Foreign currencies
Transactions in foreign currencies are translated into US
Dollars at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies
are translated into US Dollars at the closing rates at the
reporting date and the exchange differences are included in the
Consolidated Statement of Comprehensive Income . The functional and
presentational currency of the parent and all Group companies is
the US Dollar.
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost or fair value
on acquisition less depreciation and impairment. Depreciation is
provided on a straight line basis at rates calculated to write off
the cost less the estimated residual value of each asset over its
expected useful economic life. The residual value is the estimated
amount that would currently be obtained from disposal of the asset
if the asset were already of the age and in the condition expected
at the end of its useful life.
Property, plant and equipment are depreciated using the straight
line method over their estimated useful lives over a range of 3 - 5
years.
The carrying value of property, plant and equipment is assessed
annually and any impairment charge is charged to the Consolidated
Statement of Comprehensive Income.
Share based payments
Where equity settled share awards are awarded to employees or
Directors, the fair value of the awards at the date of grant is
charged to the Consolidated Statement of Comprehensive Income over
the vesting period. Non-market vesting conditions are taken into
account by adjusting the number of equity instruments expected to
vest at each balance sheet date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of
awards that eventually vest. Market vesting conditions are factored
into the fair value of the awards granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of
whether the market vesting conditions are satisfied. The cumulative
expense is not adjusted for failure to achieve a market vesting
condition.
Where the terms and conditions of awards are modified before
they vest, the increase in the fair value of the awards, measured
immediately before and after the modification, is also charged to
the Consolidated Statement of Comprehensive Income over the
remaining vesting period.
Where shares already in existence have been given to employees
by shareholders, the fair value of the shares transferred is
charged to the Consolidated Statement of Comprehensive Income and
recognised in reserves as Contributed Equity.
Basis of consolidation
Where the Company has control over an investee, it is classified
as a subsidiary. The Company controls an investee if it has power
over the investee and it is exposed to variable returns from the
investee and it has the ability to use its power to affect those
variable returns. Control is reassessed whenever facts and
circumstances indicate that there may be a change in any of these
elements of control. The consolidated financial statements present
the results of the Company and its subsidiaries ("the Group") as if
they formed a single entity. Intercompany transactions and balances
between the Group companies are therefore eliminated in full.
Trade and other receivables
Trade and other receivables are stated initially at fair value
and subsequently at amortised cost.
Financial instruments
The Group's financial assets consist of a bank current account
or short-term deposits at variable interest rates and other
receivables. Any interest earned is accrued and classified as
finance income.
The Group's financial liabilities consist of trade and other
payables. The trade and other payables are stated initially at fair
value and subsequently at amortised cost.
Joint operations
Joint operations are those in which the Group has certain
contractual agreements with other participants to engage in joint
activities that do not create an entity carrying on a trade or
business on its own. The Group includes its share of assets,
liabilities and cash flows in joint arrangements, measured in
accordance with the terms of each arrangement, which is usually pro
rata to the Group's interest in the joint operations . The Group
conducts its exploration, development and production activities
jointly with other companies in this way.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on
historical experiences and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may deviate from
these estimates and assumptions. If these estimates and assumptions
are significantly over or under stated, this could cause a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year. The areas where this could impact the
Group are:
a) Areas of judgement
i. Recoverability of exploration and appraisal costs
Expenditure is capitalised as an intangible asset by reference
to appropriate cost pools and is assessed for impairment when
circumstances suggest that the carrying amount may exceed its
recoverable value.
ii. Treatment of farm-in transactions
All farm-in transactions are reflected in these financial
statements in line with the accounting policy on Exploration and
Appraisal Costs. Farm-in transactions are recognised in the
financial statements if they are legally complete during the year
under review or, if all key commercial terms are agreed and legal
completion is only subject to administrative approvals which are
obtained within the post balance sheet period or are expected to be
obtained within a reasonable timeframe thereafter.
iii. Covid-19
The Covid-19 pandemic has caused severe and unexpected
disruption both to the economy and to working practices. In order
to mitigate against this risk the Group has made changes to its
corporate strategy to diversify its risk profile, focus on
monetising the near term potential of the Lixus licence and
maximising value for investors by developing a Moroccan gas
business. A restructuring to reduce annual running costs was
undertaken to deliver this strategy, with further changes made in
July 2020 at Board level that have resulted in an acquisition of a
renewables business and an equity fundraise in the post period.
3 Segmental analysis
The Group has two reportable segments being exploration and
appraisal and corporate costs. The operating results of each of
these segments are regularly reviewed by the Board of Directors in
order to make decisions about the allocation of resources and
assess their performance.
31 December 2020
Exploration Corporate Total
and Appraisal
US$000 US$000 US$000
--------------- ---------- ---------
Share based payment - (222) (222)
--------------- ---------- ---------
Loss on disposal of inventory (524) - (524)
--------------- ---------- ---------
Impairment of exploration
asset (66,666) - (66,666)
--------------- ---------- ---------
Administrative expenses (182) (3,496) (3,678)
--------------- ---------- ---------
Finance income - 543 543
--------------- ---------- ---------
Finance expense - (72) (72)
--------------- ---------- ---------
Tax expense - (1) (1)
--------------- ---------- ---------
Loss after taxation (67,372) (3,248) (70,620)
--------------- ---------- ---------
Additions to non-current assets 1,224 8 1,232
--------------- ---------- ---------
Total assets 12,822 5,249 18,071
--------------- ---------- ---------
Total liabilities (366) (1,543) (1,909)
--------------- ---------- ---------
Net assets 12,456 3,706 16,162
--------------- ---------- ---------
31 December 2019
Exploration Corporate Total
and Appraisal
US$000 US$000 US$000
--------------- ---------- --------
Share based payment - (651) (651)
--------------- ---------- --------
Administrative expenses (365) (3,030) (3,395)
--------------- ---------- --------
Finance income - 190 190
--------------- ---------- --------
Finance expense - (183) (183)
--------------- ---------- --------
Tax expense - (11) (11)
--------------- ---------- --------
Loss after taxation (365) (3,685) (4,050)
--------------- ---------- --------
Additions to non-current assets 4,028 67 4,095
--------------- ---------- --------
Total assets 78,788 11,493 90,281
--------------- ---------- --------
Total liabilities (1,113) (2,608) (3,721)
--------------- ---------- --------
Net assets 77,675 8,885 86,560
--------------- ---------- --------
4 Loss from operations
31 December 31 December
2020 2019
US$000 US$000
------------ ------------
Loss from operations is stated after
charging:
------------ ------------
Loss on disposal of inventory 524 -
------------ ------------
Impairment of exploration asset 66,666 -
------------ ------------
Depreciation of property, plant and equipment 59 73
------------ ------------
Depreciation of Right of Use asset 328 328
------------ ------------
Share based payments - Long Term Incentive
Scheme 200 614
------------ ------------
Share based payments - Restricted Share
Unit Scheme 22 37
------------ ------------
Auditors' remuneration:
------------ ------------
Fees payable to the Company's Auditors
for the audit of the Company's annual
accounts 60 56
------------ ------------
Audit of the Company's subsidiaries pursuant
to legislation 15 14
------------ ------------
Fees payable to the Company's Auditors
for the review of the Company's interim
accounts - 10
------------ ------------
Total payable 75 80
------------ ------------
5 Employment costs
Employees 31 December 31 December
2020 2019
US$000 US$000
------------ ------------
Wages and salaries 1,444 3,016
------------ ------------
Payments in lieu of notice / compromise 487 -
payments
------------ ------------
Pension costs 94 128
------------ ------------
Share based payments 156 321
------------ ------------
Sub-total 2,181 3,465
------------ ------------
Capitalised to exploration costs (773) (2,410)
------------ ------------
Total 1,408 1,055
------------ ------------
Key management personnel 31 December 31 December
2020 2019
US$000 US$000
------------ ------------
Wages, salaries and fees 916 753
------------ ------------
Payment in lieu of notice 468 -
------------ ------------
Social security costs 179 75
------------ ------------
Pension costs 18 -
------------ ------------
Share based payments 66 330
------------ ------------
Sub-total 1,647 1,158
------------ ------------
Capitalised to exploration costs (119) (403)
------------ ------------
Total 1,528 755
------------ ------------
The Directors are the key management personnel of the Group.
Details of the Directors' emoluments and interest in shares are
shown in the Directors' Remuneration Report.
6 Finance income and expense
Finance income 31 December 31 December
2020 2019
US$000 US$000
------------ ------------
Foreign exchange gain 518 -
------------ ------------
Bank interest receivable 25 190
------------ ------------
Total 543 190
------------ ------------
Finance expense 31 December 31 December
2020 2019
US$000 US$000
------------ ------------
Foreign exchange loss - 86
------------ ------------
Finance expense on lease 72 97
------------ ------------
Total 72 183
------------ ------------
7 Investments
The Company's wholly owned subsidiary undertakings at 31
December 2020 and 31 December 2019, excluding dormant entities,
were:
Subsidiary undertaking Principal activity Country of incorporation
Chariot Oil & Gas Investments Holding company Guernsey
(Namibia) Limited
------------------------ -------------------------
Chariot Oil & Gas Investments Oil and gas exploration Guernsey
(Morocco) Limited
------------------------ -------------------------
Chariot Oil and Gas Statistics Service company UK
Limited
------------------------ -------------------------
Enigma Oil & Gas Exploration Oil and gas exploration Namibia
(Proprietary) Limited(1)
------------------------ -------------------------
Chariot Oil & Gas Investments Holding company Guernsey
(Brazil) Limited
------------------------ -------------------------
Chariot Brasil Petroleo e Oil and gas exploration Brazil
Gas Ltda
------------------------ -------------------------
Chariot Oil & Gas Finance Service company Guernsey
(Brazil) Limited(1)
------------------------ -------------------------
Chariot Oil & Gas Holdings Oil and gas exploration UK
(Morocco) Limited
------------------------ -------------------------
(1) Indirect shareholding of the Company.
8 Taxation
The Company is tax resident in the UK, however no tax charge
arises due to taxable losses for the year (31 December 2019:
US$Nil).
No taxation charge arises in Namibia, Morocco or the UK
subsidiaries as they have recorded taxable losses for the year (31
December 2019: US$Nil).
In Brazil, there were taxable profits due to interest received
on cash balances resulting in a tax charge payable of US$1,000 (31
December 2019: US$11,000). There was no deferred tax charge or
credit in either period presented.
Factors affecting the tax charge for the current year
The reasons for the difference between the actual tax charge for
the year and the standard rate of corporation tax in the UK applied
to losses for the year are as follows:
31 December 31 December
2020 2019
US$000 US$000
------------ ------------
Tax reconciliation
------------ ------------
Loss on ordinary activities for the
year before tax (70,619) (4,039)
------------ ------------
Loss on ordinary activities at the
standard rate of corporation tax in
the UK of 19% (31 December 2019: 19%) (13,418) (767)
------------ ------------
Non-deductible expenses 12,882 200
------------ ------------
Difference in tax rates in other jurisdictions - 26
------------ ------------
Deferred tax effect not recognised 537 552
------------ ------------
Total taxation charge 1 11
------------ ------------
The Company had tax losses carried forward on which no deferred
tax asset is recognised. Deferred tax not recognised in respect of
losses carried forward total US$7.6 million (31 December 2019:
US$7.1 million). Deferred tax assets were not recognised as there
is uncertainty regarding the timing of future profits against which
these assets could be utilised.
9 Loss per share
The calculation of basic loss per Ordinary share is based on a
loss of US$70,620,000 (31 December 2019: loss of US$4,050,000) and
on 379,349,854 Ordinary shares (31 December 2019: 367,405,011)
being the weighted average number of Ordinary shares in issue
during the year. Potentially dilutive share awards are detailed in
note 20, however these do not have any dilutive impact as the Group
reported a loss for the year, consequently a separate diluted loss
per share has not been presented.
10 Exploration and appraisal costs
31 December 2020 31 December 2019
US$000 US$000
----------------- -----------------
Net book value brought forward 78,264 74,236
----------------- -----------------
Additions 1,224 4,028
----------------- -----------------
Impairment (66,666) -
----------------- -----------------
Net book value carried forward 12,822 78,264
----------------- -----------------
As at 31 December 2020 the net book values of the three cost
pools are Central Blocks offshore Namibia US$Nil (31 December 2019:
US$51.1 million), Morocco US$12.8 million (31 December 2019:
US$11.5 million) and Brazil US$Nil (31 December 2019: US$15.7
million).
In light of the challenging conditions since Covid-19 and
general lack of appetite in the market for oil exploration, the
activities in Namibia and Brazil have been assessed as non-core
with substantive expenditure not planned in the near term, and as
such full impairments have been recorded against each respective
cost pool.
11 Property, plant and equipment
Fixtures, fittings Fixtures, fittings
and equipment and equipment
31 December 2020 31 December 2019
------------------- -------------------
US$000 US$000
------------------- -------------------
Cost
------------------- -------------------
Brought forward 1,348 1,781
------------------- -------------------
Additions 8 67
------------------- -------------------
Disposals - (500)
------------------- -------------------
Carried forward 1,356 1,348
------------------- -------------------
Depreciation
------------------- -------------------
Brought forward 1,254 1,681
------------------- -------------------
Charge 59 73
------------------- -------------------
Eliminated on disposals - (500)
------------------- -------------------
Carried forward 1,313 1,254
------------------- -------------------
Net book value brought forward 94 100
------------------- -------------------
Net book value carried forward 43 94
------------------- -------------------
12 Trade and other receivables
31 December 2020 31 December 2019
US$000 US$000
----------------- -----------------
Other receivables and prepayments 811 781
----------------- -----------------
The fair value of trade and other receivables is equal to their
book value.
13 Inventory
31 December 2020 31 December 2019
US$000 US$000
------------------ -----------------
Wellheads and casing - 524
------------------ -----------------
Remaining items of inventory from earlier drilling campaigns
were disposed of in 2020 resulting in a loss on disposal of US$0.5
million.
14 Cash and cash equivalents
31 December 2020 31 December 2019
Analysis by currency US$000 US$000
----------------- -----------------
US Dollar 1,844 9,114
----------------- -----------------
Brazilian Real 30 52
----------------- -----------------
Sterling 1,815 342
----------------- -----------------
Namibian dollar 51 127
----------------- -----------------
3,740 9,635
----------------- -----------------
As at 31 December 2020 and 31 December 2019 the US Dollar and
Sterling cash is held in UK and Guernsey bank accounts. All other
cash balances are held in the relevant country of operation.
As at 31 December 2020, the cash balance of US$3.7 million (31
December 2019: US$9.6 million) contains the following cash deposits
that are secured against bank guarantees given in respect of
exploration work to be carried out:
31 December 2020 31 December 2019
US$000 US$000
----------------- -----------------
Moroccan licences 500 650
----------------- -----------------
500 650
----------------- -----------------
The funds are freely transferable but alternative collateral
would need to be put in place to replace the cash security.
15 Leases
The lease relates to the UK office.
Right-of-use asset:
31 December 2020 31 December 2019
US$000 US$000
----------------- -----------------
Brought forward 983 1,311
----------------- -----------------
Depreciation (328) (328)
----------------- -----------------
Carried forward 655 983
----------------- -----------------
Lease liability:
31 December 2020 31 December 2019
US$000 US$000
----------------- -----------------
Current 409 366
----------------- -----------------
Non-current 440 820
----------------- -----------------
Total lease liability 849 1,186
----------------- -----------------
The maturity analysis of the lease liability at 31 December 2020
is as follows:
31 December 2020 31 December 2019
US$000 US$000
----------------- -----------------
Maturity analysis - contractual undiscounted cash flows
----------------- -----------------
Less than one year 454 439
----------------- -----------------
Between one and two years 453 439
----------------- -----------------
Between two and three years - 437
----------------- -----------------
Total undiscounted lease liabilities 907 1,315
----------------- -----------------
Effect of interest (58) (129)
----------------- -----------------
Total lease liability 849 1,186
----------------- -----------------
16 Trade and other payables
31 December 2020 31 December 2019
US$000 US$000
----------------- -----------------
Trade payables 816 1,235
----------------- -----------------
Accruals 244 1,300
----------------- -----------------
1,060 2,535
----------------- -----------------
The fair value of trade and other payables is equal to their
book value.
17 Share capital
Allotted, called up and fully paid
31 December 31 December 31 December 31 December
2020 2020 2019 2019
------------ ------------ ------------ ------------
Number US$000 Number US$000
------------ ------------ ------------ ------------
Ordinary shares
of 1p each(1) 388,367,946 6,549 367,532,909 6,268
------------ ------------ ------------ ------------
1. The authorised and initially allotted and issued share
capital on admission (19 May 2008) has been translated at the
historic rate of US$GBP of 1.995. The shares issued since admission
have been translated at the date of issue, or, in the case of share
awards, the date of grant and not subsequently retranslated.
Details of the Ordinary shares issued are in the table
below:
Date Description Price No. of shares
US$
1 January 2019 Opening Balance 367,259,909
---------------------- ------ --------------
20 June 2019 Issue of share award 1.35 40,000
---------------------- ------ --------------
20 June 2019 Issue of share award 0.50 233,000
---------------------- ------ --------------
31 December
2019 367,532,909
------ --------------
27 April 2020 Issue of share award 0.18 463,768
---------------------- ------ --------------
27 April 2020 Issue of share award 0.42 133,334
---------------------- ------ --------------
27 April 2020 Issue of share award 0.53 154,285
---------------------- ------ --------------
27 April 2020 Issue of share award 4.38 42,000
---------------------- ------ --------------
27 April 2020 Issue of share award 0.50 913,822
---------------------- ------ --------------
27 April 2020 Issue of share award 0.33 700,000
---------------------- ------ --------------
27 April 2020 Issue of share award 0.39 937,500
---------------------- ------ --------------
27 April 2020 Issue of share award 0.12 1,352,875
---------------------- ------ --------------
27 April 2020 Issue of share award 0.20 1,369,541
---------------------- ------ --------------
27 April 2020 Issue of share award 0.05 864,134
---------------------- ------ --------------
27 April 2020 Issue of share award 0.02 2,958,329
---------------------- ------ --------------
27 April 2020 Issue of share award 0.11 278,082
---------------------- ------ --------------
27 April 2020 Issue of share award 0.19 1,168,142
---------------------- ------ --------------
27 July 2020 Issue of share award 0.39 411,011
---------------------- ------ --------------
27 July 2020 Issue of share award 0.15 411,011
---------------------- ------ --------------
27 July 2020 Issue of share award 0.07 1,564,286
---------------------- ------ --------------
27 July 2020 Issue of share award 0.10 1,318,841
---------------------- ------ --------------
27 July 2020 Issue of share award 0.20 1,825,000
---------------------- ------ --------------
27 July 2020 Issue of share award 0.16 1,495,693
---------------------- ------ --------------
27 July 2020 Issue of share award 0.03 2,473,383
---------------------- ------ --------------
31 December
2020 388,367,946
------ --------------
18 Related party transactions
- Key management personnel comprises the Directors and details
of their remuneration are set out in note 5 and the Directors'
Remuneration Report.
- There were no related party transactions during the current
year or year ended 31 December 2019.
19 Financial instruments
The Board of Directors determine, as required, the degree to
which it is appropriate to use financial instruments or other
hedging contracts or techniques to mitigate risk. Throughout the
year ending 31 December 2020, no trading in financial instruments
was undertaken (31 December 2019: US$Nil). There is no material
difference between the book value and fair value of the Group cash
balances, short-term receivables and payables.
Market risk
Market risk arises from the Group's use of interest bearing and
foreign currency financial instruments. It is the risk that future
cash flows of a financial instrument will fluctuate because of
changes in interest rates (interest rate risk) and foreign exchange
rates (currency risk). Throughout the year, the Group has held
surplus funds on deposit, principally with its main relationship
bank Barclays, on fixed short-term deposits. The credit ratings of
the main relationship bank the Group holds cash with do not fall
below A or equivalent. The Group does not undertake any form of
speculation on long term interest rates or currency movements,
therefore it manages market risk by maintaining a short-term
investment horizon and placing funds on deposit to optimise short
term yields where possible but, moreover, to ensure that it always
has sufficient cash resources to meet payables and other working
capital requirements when necessary. As such, market risk is not
viewed as a significant risk to the Group. The Directors have not
disclosed the impact of interest rate sensitivity analysis on the
Group's financial assets and liabilities at the year-end as the
risk is not deemed to be material.
This transactional risk is managed by the Group holding the
majority of its funds in US Dollars to recognise that US Dollars is
the trading currency of the industry, with an appropriate balance
maintained in Brazilian Real, Sterling and Namibian Dollars to meet
other non-US Dollar industry costs and ongoing corporate and
overhead commitments.
At the year end, the Group had cash balances of US$3.7 million
(31 December 2019: US$9.6 million) as detailed in note 14.
Other than the non-US Dollar cash balances described in note 14,
no other material financial instrument is denominated in a currency
other than US Dollars. A 10% adverse movement in exchange rates
would lead to a foreign exchange loss of US$190,000 and a 10%
favourable movement in exchange rates would lead to a corresponding
gain; the effect on net assets would be the same as the effect on
profits (31 December 2019: US$50,000).
Capital
In managing its capital, the Group's primary objective is to
maintain a sufficient funding base to enable it to meet its working
capital and strategic investment needs. The Group currently holds
sufficient capital to meet its ongoing needs for at least the next
12 months.
Liquidity risk
The Group's practice is to regularly review cash needs and to
place excess funds on fixed term deposits. This process enables the
Group to optimise the yield on its cash resources whilst ensuring
that it always has sufficient liquidity to meet payables and other
working capital requirements when these become due.
The Group has sufficient funds to continue operations for the
forthcoming year and has no perceived liquidity risk.
Credit risk
The Group's policy is to perform appropriate due diligence on
any party with whom it intends to enter into a contractual
arrangement. Where this involves credit risk, the Group will put in
place measures that it has assessed as prudent to mitigate the risk
of default by the other party. This could consist of instruments
such as bank guarantees and parent company guarantees.
As such, the Group has not put in place any particular credit
risk measures in this instance as the Directors view the risk of
default on any payments due from the joint venture partner as being
very low.
20 Share based payments
Share Option Scheme
During the year, the Company operated the Chariot Oil & Gas
Share Option Scheme ("Share Option Scheme"). The Company recognised
total expenses of US$Nil (31 December 2019: US$Nil) related to
equity settled share based payment transactions under the plan. All
remaining options granted under the plan lapsed during the
year.
The following table sets out details of options granted under
the Share Option Scheme:
31 December 31 December
2020 2019
Number of Options Number of Options
------------------ ------------------
Outstanding at beginning of
the year 3,000,000 3,000,000
------------------ ------------------
Lapsed during the year (3,000,000) -
------------------ ------------------
Outstanding at the end of the
year - 3,000,000
------------------ ------------------
Exercisable at the end of the
year - 3,000,000
------------------ ------------------
Long Term Incentive Scheme ("LTIP")
The plan provides for the awarding of shares to employees and
Directors for nil consideration. The award will lapse if an
employee or Director leaves employment.
Shares granted when an individual is an employee will vest in
equal instalments over a three year period from the grant date and
shares granted when an individual is a Director or otherwise
specified will vest three years from the end of the year or period
the period to which the award relates.
The Group recognised a charge under the plan for the year to 31
December 2020 of US$200,000 (31 December 2019: US$614,000).
The following table sets out details of all outstanding share
awards under the LTIP:
31 December 2020 31 December
2019
Number of awards Number of awards
----------------- -----------------
Outstanding at beginning of the
year 25,000,645 22,433,201
----------------- -----------------
Granted during the year 5,431,712 2,840,444
----------------- -----------------
Shares issued for no consideration
during the year (20,835,037) (273,000)
----------------- -----------------
Lapsed during the year (2,195,540) -
----------------- -----------------
Outstanding at the end of the
year 7,401,780 25,000,645
----------------- -----------------
Exercisable at the end of the
year 6,044,990 14,494,547
----------------- -----------------
Non-Executive Directors' Restricted Share Unit Scheme
("RSU")
The plan provides for the awarding of shares to Non-Executive
Directors for nil consideration. An award can be Standalone or
Matching.
Standalone share awards are one-off awards to Non-Executive
Directors which will vest in equal instalments over a three year
period and will lapse if not exercised within a fixed period on
stepping down from the Board.
Matching share awards will be granted equal to the number of
existing Chariot shares purchased by the Non-Executive Director in
each calendar year capped at the value of their gross annual fees
for that year. The shares will vest in equal instalments over a
three year period and will lapse if not exercised prior to stepping
down from the Board or if the original purchased shares are sold
prior to the vesting of the relevant Matching award. Any potential
Matching awards not granted in a calendar year shall be forfeited
and shall not roll over to subsequent years.
The Group recognised a charge under the plan for the year to 31
December 2020 of US$22,000 (31 December 2019: US$37,000).
The following table sets out details of all outstanding share
awards under the RSU:
31 December 2020 31 December
2019
Number of awards Number of awards
----------------- -----------------
Outstanding at beginning of the
year 2,839,875 2,191,852
----------------- -----------------
Granted during the year - 648,023
----------------- -----------------
Outstanding at the end of the
year 2,839,875 2,839,875
----------------- -----------------
Exercisable at the end of the
year 2,407,860 1,981,193
----------------- -----------------
21 Contingent liabilities
From 30 December 2011 the Namibian tax authorities introduced a
withholding tax of 25% on all services provided by non-Namibian
entities which are received and paid for by Namibian residents.
From 30 December 2015 the withholding tax was reduced to 10%. As at
31 December 2020, based upon independent legal and tax opinions,
the Group has no withholding tax liability (31 December 2019:
US$Nil). Any subsequent exposure to Namibian withholding tax will
be determined by how the relevant legislation evolves in the future
and the contracting strategy of the Group.
22 Events after the balance sheet date
The Directors consider these events to be non-adjusting post
balance sheet events.
a) Acquisition of renewable and hybrid power developer focused on mining sector in Africa
On 23 March 2021 the Company announced that it had signed share
purchase agreements ("SPAs") for the acquisition of the business of
Africa Energy Management Platform ("AEMP") for consideration of up
to US$2 million payable primarily in new Ordinary Shares. AEMP is a
renewable and hybrid energy project developer, with an ongoing
strategic partnership with Total Eren, a leading global player in
renewable energy, predominantly in solar and wind.
The Company has incorporated a new 100% subsidiary, Chariot
Transitional Power Limited, which signed SPAs with the shareholders
of African Energy Management Platform and AEMP Essakane Solar SAS
for the acquisition of the business of AEMP and the related 10%
holding in the Essakane project.
Initial consideration payable on completion of the SPAs is
US$1.16 million in new Ordinary Shares based on the 30-day VWAP
prior to the signing of the SPAs (representing 9,196,926 shares)
and US$0.09 million in cash which will be funded from Chariot's
existing reserves. Deferred consideration up to US$0.75 million is
payable within a 24-month period dependent on certain project
pipeline targets being met as well as the retention of key members
of the AEMP team. This deferred consideration is payable in new
Ordinary Shares based on the 30-day VWAP prior to the signing of
the SPAs (representing a maximum of 5,946,288 shares).
b) Placing, subscription and open offer (the "Fundraising")
On 18 June 2021 the Company announced the approval by
shareholders at a General Meeting of a placing of and subscription
for 212,553,929 new Ordinary Shares, 29,231,953 new Ordinary Shares
by open offer and a further 9,633,534 new Ordinary Shares as third
party fees in connection with the Fundraising at a price of 5.5
pence per share. The combined total of 251,419,416 new Ordinary
Shares are expected to be admitted shortly and shortly thereafter
the Company expects to receive the balance of proceeds totalling
US$18.8 million.
Magna Capital LDA (of which Adonis Pouroulis is a substantial
shareholder) has conditionally agreed to
underwrite the Fundraising, ensuring that the total fundraising
will equate to approximately US$23 million before expenses, by
subscribing, in two tranches on or before 31 January 2022 and 28
February 2022, for new Ordinary Shares at the Issue Price (the
"Underwriting Commitment"). Accordingly subsequent to the
completion of the placing, subscription and open offer for net
proceeds of US$18.8 million, the remaining Underwriting Commitment
is US$4.2 million. Mr Pouroulis has personally sub-underwritten the
Underwriting Commitment. The Underwriting Commitment is
transferable at Magna's sole discretion and shall reduce in equal
proportion to any funds received separately by the Company from a
farm-in or a further fundraise. The Underwriting Commitment
constitutes a related party transaction.
c) Change of name to Chariot Ltd
On 18 June 2021 it was approved by shareholders to change the
name of the Company from Chariot Oil & Gas Ltd to Chariot Ltd
with immediate effect.
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END
FR SEFFMLEFSEIM
(END) Dow Jones Newswires
June 25, 2021 02:00 ET (06:00 GMT)
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