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…

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