13th Apr 2016 08:57
LONDON (Alliance News) - Chariot Oil & Gas Ltd on Wednesday said it plans to focus on partnering with other firms, protecting its portfolio and its healthy cash balance as it reported a hefty loss for the recently ended financial year in 2015.
Although the company made a substantial USD14.7 million pretax loss in the year, that is considerably narrower than the USD41.8 million loss reported in 2014 as the USD33.6 million impairment booked in 2014 was not repeated.
Excluding that large impairment, the pretax loss in 2014 only amounted to USD8.2 million.
Chariot's share-based payments fell by USD642,000 year-on-year and its administrative costs fell by USD1.6 million, however those reductions were offset by a USD2.3 million rise in finance costs, a USD200,000 fall in finance income and the company booking a USD6.6 million provision against its inventory which was not present the year before.
Chariot said it is protecting cash as it reported a balance of USD39.7 million, which it said is "significantly in excess" of its financial commitments. More importantly, Chariot remains debt free and is continuing to rein in costs by cutting its remuneration for its board by 50% during the year and by being disciplined with its capital expenditure.
The company is protecting its portfolio of assets, mainly within Morocco but also elsewhere. However, Chariot said it is still considering potential acquisition opportunities.
"Our portfolio fundamentals remain unchanged by these external influences, and our strong cash position with no debt offers us a solid platform to be able to make progress in these tougher times. We continue to deliver on our strategy; partnering for drilling, managing risk and progressing the technical understanding of our asset base whilst being opportunistic yet prudent in these market conditions," said Chief Executive Larry Bottomley.
Partnering will be a focus for the company following Chariot's farm out on the Rabat Deep project in Morocco in 2015. That farm-out was with Italian major Eni, leaving Chariot with a 10% carried interest on the JP-1 drilling prospect. Chariot and Eni have opened up a data room to encourage new partners to come into the project.
The Rabat Deep licence has been extended whilst the Mohammedia reconnaissance licence has been converted into exploration permits focused on the JP-2 target. The Loukos licence was relinquished in 2015.
However, most expenditure this year will be on acquiring 3D seismic over Chariot's licenses in Brazil and Namibia.
"In Morocco we look forward to Eni joining us as a partner on Rabat Deep and the preparations for drilling. In Mauritania, we will continue with our partnering process," said Chariot.
"In Namibia we completed the acquisition of our 2,600 kilometres squared 3D seismic programme in the central blocks in February 2016, and in Brazil we recently acquired our 785 kilometres squared 3D seismic programme. Processing for both datasets is underway and these will be interpreted in house in due course," it added.
"This activity meets the current commitments in both of these licences, completing all work programmes across the portfolio, and will allow us to identify and mature further prospectivity in these regions," said Chariot.
Chariot shares were trading up 2.4% to 10.75 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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