Chariot (LSE:CHAR) makes strides in transitional gas and power sectors in recent half

Chariot (LSE:CHAR), the Africa-focused transitional energy company, has announced its unaudited interim results for the six-month period ending June 30, 2024. The company is making significant strides in its various energy projects, particularly in transitional gas and power sectors across Morocco and South Africa.

Transitional Gas Developments

In offshore Morocco, Chariot has successfully completed partnership agreements with Energean plc for the Lixus and Rissana licenses. Under this agreement, Energean will take over as operator and carry the drilling campaign, with a total gross cost estimated at $85 million. The drilling campaign at the Anchois-3 well began in August and was completed in September. During this operation, multiple gas-bearing reservoirs were identified in the B sand appraisal interval, although the gas pays were found to be thinner than expected. Additional reservoirs encountered were water-wet, prompting a post-well evaluation to assess the implications for future exploration.

Onshore, Chariot conducted a successful two-well drilling campaign in May 2024. The RZK-1 well, drilled on the Gaufrette prospect, confirmed the presence of a high-quality reservoir with multiple gas shows, though it was deemed sub-economic. Conversely, a gas discovery was made at the OBA-1 well in the Dartois prospect, revealing a gross interval of approximately 70 meters of primary interest. The OBA-1 well has been cased and cemented, with a Christmas tree installed for future rigless flow testing, potentially positioning it as a future gas producer. Additionally, Chariot signed a Heads of Terms agreement with Vivo Energy to explore future commercialization of onshore gas to industry.

Advancements in Transitional Power

In the transitional power sector, Chariot has initiated a strategic review aimed at securing funding at the subsidiary level to support the ongoing growth and development of its portfolio. The company has received multiple expressions of interest from South African investors interested in financing the Etana platform and generation assets, with financing negotiations progressing positively.

Chariot increased its stake in the South African electricity trading joint venture, Etana Energy (Pty) Limited, to 49%. This joint venture aims to provide comprehensive electricity solutions, generating and trading energy through South Africa's national grid. The business model connects multiple generators with large consumers, and electricity offtake agreements have already been established with notable clients, including Growthpoint Properties and Petra Diamonds. Chariot is also exploring large renewable generation projects, with a total of 400 MW of gross wind generation capacity identified.

Progress in Other Energy Projects

Chariot continues to advance various solar projects across Africa, including the operational Essakane 15 MW solar project at IAMGOLD's gold mine in Burkina Faso. Key developments are ongoing for three additional projects: a 40 MW solar initiative in South Africa at Tharisa, a 30 MW solar project in Zimbabwe at Karo, and a significant 430 MW solar and wind project in Zambia with First Quantum Minerals.

The company is also pursuing a water desalination project in Djibouti, with additional projects under evaluation in regions facing water scarcity. Furthermore, feasibility studies for a green hydrogen project in Mauritania have been completed in partnership with TEH2, confirming the project's scale and outlining a phased development approach. Discussions for offtake agreements are also underway, while a green hydrogen pilot project in Morocco is in development alongside Oort Energy and the University Mohammed VI Polytechnic.

Financial Position

As of June 30, 2024, Chariot reported a cash position of $3.6 million, bolstered by a fundraising initiative completed in July that raised approximately $9 million gross.