Chariot Oil & Gas partners with BP on Namibian acreage

Monday, Aug 08 2011 by
Chariot Oil  Gas partners with BP on Namibian acreage

Chariot Oil & Gas (LON:CHAR) , the oil and gas group with operations offshore Namibia, reported this morning that industry giant BP (LON:BP.) had agreed to take a 50% share of Chariot’s equity interest in Southern Block 2714A. The move means that Chariot and BP will each have a 25% stake in the licence, with Chariot’s existing partner Petrobas holding 50%. Under the terms of the agreement, BP has committed to cover Chariot’s cost of drilling the first exploration well, as well as past costs incurred.

Block 2714A is located in the Orange Basin offshore Namibia and covers an area of 5,481 sq km. The Nimrod prospect is situated within this licence and is the largest of Chariot’s prospects. With this farm-out, Chariot will continue to pursue its drilling campaign within this licence area whilst sharing in the costs, risks and rewards of exploration. Funds received and retained through this deal will be used in further exploration and appraisal work. This agreement remains subject to the full approval of the Ministry of Mines and Energy in Namibia. It includes standard representations and warranties given by both parties and other conditions precedent.

Paul Welch, the chief executive of Chariot, said: “We are delighted to enter into this farm-out agreement with BP whose global expertise of deep water exploration and related petroleum systems is exceptional and whose contribution to our campaign going forward will be invaluable. It is a pleasure to welcome another major oil company as a partner. It has been a key strategic objective for us to farm down our assets in order to facilitate exploration drilling, retain capital and mitigate risk; we are very pleased to have made progress towards this. We look forward to proving up the potential of our assets alongside our partners, as we seek to deliver long-term value to our shareholders.”

News of the BP deal came as Chariot also announced that it had signed a farm-out agreement with PGS, one of the world's leading seismic companies, whereby PGS will acquire a 10% interest in Chariot’s Central Blocks (Licence 19, covering Blocks 2312 A & B and Northern halves of 2412 A & B). by funding 50% of the planned 3D “GeoStreamer” seismic programme. Chariot will retain a 90% equity ownership of the licence following completion of the farm-out. Chariot said this was “an ideal farm-out at this stage in the exploration process” because it had reduced a significant proportion of risked expenditure whilst retaining maximum equity in the block.

In April 2011, Chariot completed a US$140 million fund raising to enable it to participate in the drilling of a minimum of two wells and conduct a 5,000 sq km 3D seismic programme across areas of specific interest in the Central Blocks. The farm-out agreement with PGS releases a substantial portion of those funds, which the company said would be used for further exploration and appraisal work across its Namibian portfolio or potentially to secure new opportunities. Shares in AIM listed Chariot lost 46.5p in last week’s market collapse to leave them trading at 120p at the close on Friday. This morning they gained just over 9% to 131.25p.


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Chariot Oil & Gas Limited is an oil and gas exploration company. The Company has two reportable segments: exploration for oil and gas, and corporate costs. The Company has interests in approximately two licenses offshore Morocco; Rabat Deep (approximately 50% (operator), 25% Woodside, 25% Office National des Hydrocarbures et des Mines (ONHYM) (carried interest), and Mohammedia (approximately 75% Chariot (operator), 25% ONHYM (carried interest)). The Company holds approximately 55% and operatorship in the C-19 license offshore Mauritania. The Company holds approximately 100% interest of licenses BAR-M-292, 293, 313 and 314. The Company has interests in approximately three licenses covering over four blocks offshore Namibia. The Company's subsidiaries include Chariot Oil & Gas Investments (Mauritania) Limited, Chariot Oil & Gas Investments (Morocco) Limited, Chariot Brasil Petroleo e Gas Ltda and Chariot Oil & Gas Investments (Morocco) Limited. more »

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BP p.l.c. is an integrated oil and gas company. The Company owns an interest in OJSC Oil Company Rosneft (Rosneft), an oil and gas company. The Company's segments include Upstream, Downstream, Rosneft, and Other businesses and corporate. The Upstream segment is engaged in oil and natural gas exploration, field development and production, as well as midstream transportation, storage and processing. The Downstream segment has global manufacturing and marketing operations. The Rosneft segment has a resource base of hydrocarbons onshore and offshore. The Other businesses and corporate segment comprises the biofuels and wind businesses, shipping and treasury functions, and corporate activities around the world. The Company provides its customers with fuel for transportation, energy for heat and light, lubricants to keep engines moving and the petrochemicals products used to make everyday items as diverse as paints, clothes and packaging. more »

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