Interim Results

3rd Nov 2008 07:00



3rd November 2008

Chariot Oil & Gas Limited

("Chariot", the "Company" or the "Group")

Interim Results

Chariot Oil & Gas Limited, an independent oil and gas exploration company with interests in Namibia and Peru, today announces its maiden set of unaudited results for the six months ended 31 August 2008.

Highlights: 

successfully admitted to AIM on 19 May 2008

admission raised gross proceeds of £45m

progressed exploration - further data obtained to mature and expand the identified prospect and lead inventory offshore Namibia

conducted and completed an aeromagnetic acquisition programme onshore Namibia

Current Trading and Outlook:

Kevin Broger, Chief Executive Officer commented: 

"Following our successful, oversubscribed listing we have made significant developments. We have substantially increased our prospective resources, furthered our exploration work and expanded our portfolio. With cash on hand and no debt, we remain on course with our strategy and will continue to deliver on our objectives. We remain confident about our future prospects and look forward to reporting on further developments in due course." 

For further information please contact:

Chariot Oil & Gas Limited	+44 (0)20 7357 9477
Kevin Broger, CEO
KPMG Corporate Finance (Nominated adviser)	+44 (0)20 7311 1000
Susan Walker
BMO Capital Markets Limited (Broker)	44 (0)20 7664 8120
Bill Smith
Hogarth Partnership	+44 (0)20 7357 9477
Julian Walker, Simon Hockridge

KPMG Corporate Finance, a division of KPMG LLP which is authorised and regulated by the Financial Services Authority for investment business activities, is acting for the Company as nominated adviser in relation to the matters set out in this announcement and is not acting for any other person in relation to these matters. KPMG Corporate Finance will not be responsible to anyone other than Company for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement. 

  CHIEF EXECUTIVE'S REVIEW

I am pleased to present Chariot's maiden interim statement following our successful admission to AIM on 19 May 2008. 

As stated on listing we believe that Chariot presents a highly prospective investment opportunity in oil and gas exploration, with a clear short-term growth strategy to:

explore the potential resources within our Namibian blocks

obtain further data to expand and mature the prospect and leads that have been identified by our consultants HRT Petroleum Ltda ("HRT") and 

look to balance our portfolio. 

Over the past six months, we have been working towards these objectives, undertaking further technical work on all our Namibian blocks which has already led to a substantial increase in our mean prospective resources, commissioning seismic providers for both 2D and 3D acquisition and actively pursuing and securing new opportunities.

NAMIBIA

Through Enigma Oil & Gas Exploration (Pty) Ltd ("Enigma"), our wholly-owned subsidiary, we have continued to explore the potential of our ten Namibian blocks (eight offshore and two onshore) and we continue to benefit from the specialist expertise within HRT, which was engaged pre-float as an independent technical consultant. 

As announced on 24 October 2008, PSDM reprocessing and mapping on our offshore Namibian blocks discovered a further 17 leads in the northern and southern licenses and we have increased our mean gross prospective resources by over 1.3 billion barrels to 5.24 billion. We now have a total of one prospect and 22 leads. In a number of cases and where individual leads are vertically stackable and potentially drillable with a single well, we can consider them as prospects. 

Reprocessing and mapping was completed on the existing 2D seismic database in the northern blocks, leading to the definition and quantification of a series of new structural leads in the Upper and Lower Cretaceous sequences. Reinterpretation of the seismic data has confirmed the presence of four main structural leads in the Tapir Complex (all with a stratigraphic component); Tapir North, Tapir, Tapir South and Tapir Deep - increasing the prospective resources from an initial figure of 675mmbbls, to 1,547mmbbls - a net increase of 872 mmbbls. Three prospects are now present in the north - Tapir North (stackable), Tapir (stackable) and Zamba. Zamba is a well defined structural feature with mean prospective resources of 985 mmbbls (an increase of 17mmbbls from the figure disclosed in the AIM admission document).

In the southern blocks, reinterpretation of the Mastodon and Mammoth leads confirmed the presence of 13 new structural leads (again, all with a stratigraphic component) in the Campanian, Santonian and Albian horizons which has led to an increase in prospective resources from an initial figure of 1294 mmbbls, to 1,558 mmbbls - a net increase of 264 mmbbls. Two stackable prospects are now evident in these license areas.

The Group also completed an aeromagnetic acquisition program of 31,115km over the onshore blocks in July and a geochemical sampling programme is to commence in due course.  

Ongoing Work Programme:

Following the period end, we completed the offshore Namibia seismic tendering process and appointed Seabird Geophysical AS ("Seabird") and Wavefield Inseis ASA ("Wavefield") as external seismic data providers. Seabird began its 2D survey last month and, subject to weather patterns, is expected to take approximately one and a half months to acquire the full 3,000km of data over blocks 2312A/B and 2412A/B. 

Wavefield begins its two 3D surveys this month. Subject to weather patterns, it is expected to take approximately seven weeks to complete a 1,500km2 programme in blocks 1811A and B, and approximately 14 weeks to complete a 3,000km2 programme in blocks 2714A and B. 

Discussions with a potential farm-out partner are continuing and we will provide an update on this as and when applicable. We have also opened a dataroom to consider farm-out opportunities for additional interests in our Namibian offshore blocks. 

PERU

As announced on 11 September 2008, Enigma secured exploration rights for three onshore blocks in northern Peru - two in the Marañon basin and one in the Huallaga basin. The blocks were successfully bid for in partnership with Jindal Steel and Power Limited ("JSPL"), a subsidiary of the Indian steel conglomerate Jindal Organisation. This has served to diversify our portfolio both geographically and by securing a position within a proven petroleum basin - the Marañon basin already produces 38,700 barrels of oil per day.

Enigma has a 50% interest in block 159 and a 20% interest in block 147, both in the Marañon basin, and a 20% interest in block 153 in the Huallaga. Due to its technical qualifications and expertise, Enigma is the designated operator. Prior to submitting a bid proposal, the blocks of interest were appraised by HRT. Two of the three blocks present a unique opportunity where HRT's proprietary biomarker and diamondoid analysis can be applied to look for deeper source rocks and reservoirs. It should be noted that the Peruvian basins have to date been predominantly explored with shallow well testing.

As part of the bid process, Enigma and JSPL submitted a proposed work program that requires the reprocessing of existing 2D seismic data and the performance of a combination of 2D seismic acquisition, gravity and magnetic data acquisition and wells. 

Financial results

As an exploration company, Chariot currently has no revenues. The company incurred an operating loss of $6.3m for the six months to 31 August 2008, of which $1.8m related to ongoing overhead costs. Other items expensed under operating costs included costs of the admission to AIM of $1.8m, and non-cash, fair value adjustments relating to employee share options of $2.6m.

The exchange loss of $5.9m was realised on translation of Sterling balances, following recent falls in the exchange value of Sterling versus the US Dollar. The company intends to implement a hedging policy to protect against further exchange rate fluctuations.

Expenditure on capitalised exploration costs for the six months totalled $4.5m. The only other significant cash outflow related to the repayment of shareholder loans of $3.1m.

The oversubscribed AIM flotation in May 2008 resulted in the issue of 41.2m new shares, raising $88.8m of funds, with issue costs of $9.5m. The company is debt free and held cash balances of $71.3m at 31 August 2008.

 

Outlook

Following our successful, oversubscribed listing we have made significant developments. We have substantially increased our prospective resources, furthered our exploration work and enhanced our portfolio. With cash on hand and no debt, we remain on course with our strategy and will continue to deliver on our objectives. We remain confident about our future prospects and look forward to reporting on further developments in due course.

Kevin Broger

Chief Executive

  Chariot Oil & Gas Limited

INDEPENDENT REVIEW REPORT TO CHARIOT OIL & GAS LIMITED

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 August 2008 which comprises the Consolidated Condensed Income Statement, Consolidated Condensed Balance Sheet, Consolidated Condensed Cash Flow Statement and Consolidated Condensed Statement of Changes in Equity, together with the related explanatory notes.

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'', issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 August 2008 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market.

BDO Stoy Hayward LLP

Chartered Accountants and Registered Auditors

31st October 2008  Chariot Oil & Gas Limited

Consolidated Condensed Income Statement for the six months ended 31 August 2008

	Notes	Six months to 31 August 2008	Six and a half months ended 29 February 2008
		(Unaudited)	(Audited)
		US$000	US$000
Administrative expenses:
Share based payments		(2,641)	-
IPO costs expensed		(1,833)	-
Other administrative expenses	3.	(1,792)	(2,835)
Total administrative expenses		(6,266)	(2,835)
Loss from operations		(6,266)	(2,835)
Finance income		1,153	-
Foreign exchange loss		(5,859)	-
Other finance expense		(54)	(26)
Total finance expense		(5,913)	(26)
Loss before taxation		(11,026)	(2,861)
Taxation		-	-
Loss after taxation		(11,026)	(2,861)
Loss per ordinary share - basic and diluted	4.	(US$0.09)	(US$0.05)

All amounts relate to continuing activities.

  Chariot Oil & Gas Limited

Consolidated Condensed Balance Sheet as at 31st August 2008

		At 31 August 2008	At 29 February 2008
		(Unaudited)	(Audited)
		US$000	US$000
Assets
Non- current assets
Intangible assets	5.	56,372	51,903
Property plant and equipment		323	156
		56,695	52,059
Current Assets
Trade and other receivables		79	8
Cash and cash equivalents		71,338	3,528
		71,417	3,536
Total assets		128,112	55,595
Equity and liabilities
Equity
Share capital		2,802	1,988
Share Premium		133,759	45,506
Other Reserve		-	1,111
Option and Warrant Reserve		4,062	343
Exchange reserve		562	(353)
Retained Earnings		(14,049)	(2,861)
Total Equity		127,136	45,734
Liabilities
Current Liabilities
Trade and other payables		976	4,120
Non Current Liabilities
Long term borrowings		-	5,741
Total Liabilities		976	9,861
Total equity and liabilities		128,112	55,595

  Chariot Oil & Gas Limited

Consolidated Condensed Cash Flow Statement - six months to 31 August 2008

	Six months to 31 August 2008	Six and a half months ended 29 February 2008
	(Unaudited)	(Audited)
	US$000	US$000
Operating activities
Loss before and after taxation	(11,026)	(2,861)
Add back:
Finance Income	(1,153)	-
Finance Expense	54	26
IPO costs expensed	1,833	-
Adjustment for realised foreign exchange differences	5,859	-
Adjustment for shared based payment expense	2,641	-
Net cash outflow from operating activities before changes in working capital	(1,792)	(2,835)
Increase in trade and other receivables	(71)	(8)
Increase / (decrease) in trade and other payables	(3,144)	(3,252)
Net cash outflow from operating activities	(5,007)	(6,095)
Investing activities
Finance Income	1,153	-
Finance Expense	(8)	-
Expenditure in respect of property, plant and equipment	(167)	-
Expenditure in respect of intangible assets	(4,469)	(2,690)
Cash outflow used in investing activities	(3,491)	(2,690)
Financing activities
Proceeds from issue of convertible loan notes	1,992	5,400
Issue costs relating to convertible loan notes	-	(420)
Issue of ordinary share capital	88,847	7,718
Issue costs relating to share capital	(9,484)	-
Net cash inflow from financing activities	81,355	12,698
Net increase in cash and cash equivalents in the period	72,857	3,913
Cash and cash equivalents at start of the period	3,528	-
Effect of foreign exchange rate changes	(5,047)	(385)
Cash and cash equivalents at end of the period	71,338	3,528

  Chariot Oil & Gas Limited

Unaudited consolidated interim statement of changes in equity for the six months to 31 August 2008

	Share Capital	Share Premium	Shared based payments and Warrant Reserve	Foreign Exchange Reserve	Retained Losses	Total
	US$000	US$000	US$000	US$000	US$000	US$000
At 29th February 2008	1,988	45,506	1,454	(353)	(2,861)	45,734
Exchange differences arising on translation of foreign operations				915		915
Net income/(expense) recognised directly in equity				915		915
Loss for the period					(11,026)	(11,026)
Total recognised income and expense for the period				915	(11,026)	(10,111)
Issue of share capital (net of issue costs)	814	88,253	(33)		(162)	88,872
Share based payments			2,641			2,641
At 31st August 2008	2,802	133,551	4,062	562	(13,841)	127,136

  Chariot Oil & Gas Limited

Notes to the Interim Statement

 

The company was incorporated in Guernsey on 13 August 2007 with the name Namquest Holdings Limited and changed to its present name on 16 November 2007.

This unaudited consolidated interim financial information has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively EU IFRSs). The principal accounting policies used in preparing the interim results are unchanged from those disclosed in the AIM Admission document of 19 May 2008, and no changes to these policies are envisaged.

The financial information for the six months ended 31 August is unaudited and does not constitute the group's statutory financial statements for those periods. The comparative financial information for the six and a half month period from 13 August 2007 to 29 February 2008 has, however, been derived from the financial information included in the AIM Admission document of 19 May 2008.

3. Other administrative expenses include $128k of costs relating to new business projects.

The calculation of the basic earnings per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

	Six months ended 31 August 2008	Six and a half months ended 29 February 2008
	US$000	US$000
Loss for the period	(11,026,000)	(2,861,000)
Weighted average number of shares	127,448,980	58,923,840
Loss per share, basic and diluted.	$(0.09)	$(0.05)

	At 31 August 2008	At 29 February 2008
Cost	US$000	US$000
Balance brought forward	51,903	-
Acquisition of Enigma *	-	47,024
Acquisition of licences for shares	-	2,189
Additions	4,469	2,690
Total cost	56,372	51,903
Net book value	56,372	51,903

*On 7 January 2008, the company acquired the entire share capital of Enigma Oil & Gas Exploration (Pty) Limited ("Enigma"), in consideration for the issue of ordinary shares. The surplus of value of the consideration over other separable net assets and liabilities of the acquired group has been attributed to the oil and gas properties and represents their estimated fair value as at the date of acquisition.

ENDIR DFLFXVBBZFBE

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Chariot