30th Mar 2016 07:12
LONDON (Alliance News) - Chariot Oil & Gas Ltd shares rose on Wednesday after striking a deal that will lead to Italian multinational firm Eni acquiring a substantial stake in permits related to the Rabat Deep Offshore project in Morocco.
Chariot shares were up 15% to 6.72 pence per share on Wednesday morning.
Chariot Oil & Gas will reduce its stake in the project down to 10% whilst Eni will acquire a 40% stake and become the operator.
In return, Eni will carry Chariot's costs to drill a deepwater well on the JP-1 prospect, and will also carry Chariot's costs for other geological and administrative costs. Eni will also pay a contribution towards Chariot's investment in the project to date, but no further details regarding that contribution were released.
The other partners involved in the project are Australia's Woodside Petroleum, which will hold a 25% stake after the transaction, and the Moroccan Office National des Hydrocarbures et des Mines, which will retain its 25% carried interest.
"Retaining a 10% equity interest in the drilling of this well has the potential to create transformational value in the success case due to the large scale of prospective resources, excellent contract commercial terms and robust economics even in the current lower oil price environment," said Chariot.
The JP-1 prospect to be drilled by Eni has an estimated gross mean prospective resource of 768.0 million barrels of oil, and Chariot said it believes that will be drilled sometime in 2017.
Notably, Chariot said success at JP-1 would de-risk other targets in the licence area, and could allow for further exploration potential at the neighbouring Mohammedia permit, in which Chariot holds a 75% stake as operator.
The deal is still subject to approval from Moroccan authorities.
By Joshua Warner; [email protected]; @JoshAlliance
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