19th May 2008 07:00
Chariot Oil & Gas Ld 19 May 2008 Not for release, publication or distribution, in whole or in part, in or into theUnited States, Canada, Australia, Ireland or Japan 19 May 2008 Chariot Oil & Gas Limited Placing and admission to trading on AIM Chariot Oil & Gas Limited, an independent oil and gas exploration group, focusedon the exploration of the South Atlantic margins, specifically Namibia, today announcesdetails of a Placing and the Admission of its Ordinary Shares to trading on AIM,a market operated and regulated by London Stock Exchange plc. Based on the PlacingPrice of 130 pence per Ordinary Share, the Company is expected to have a market capitalisationof approximately £183.5 million at Admission. The Ordinary Shares will trade onAIM under the symbol: 'CHAR'. KPMG Corporate Finance is acting as Nominated Adviser and BMO Capital Markets Limitedis acting as Broker to the Company. The Directors consider that Chariot offers the following investment highlights: * a portfolio of oil and gas exploration Licences in Namibia, covering ten Blocks,eight of which are offshore and two of which are onshore; * the engagement of HRT Petroleum, a global petroleum system specialist, whois applying the same suite of analysis tools which have previously led to large discoveriesoffshore Brazil; * identification of one Prospect and six Leads to date. Three of the Leads identifiedcomprise a multi-layer Prospect and may be considered as such; * a mean prospective resource volume of 3.9 billion barrels of oil; * a management team that has the exploration and commercial expertise to leadthe development of the Group's assets; and * preliminary discussions underway with a potential farm-out partner to providefunding, mitigate risk and expedite exploration and potential development. Kevin Broger, CEO of Chariot said: 'We are very pleased to announce the admissionof Chariot to AIM as we believe it presents a highly prospective investment opportunityin oil and gas exploration. Namibia is a frontier exploration region with regardsto oil and gas, but our exploration efforts to date strongly suggest that our Blocksmay hold significant hydrocarbon accumulations. Our findings are further supportedby the fact that our Blocks have analogous geology to the petroliferous provincesoffshore Brazil and Angola with which they share a common geological history andpetroleum system style. Admission to AIM positions us well to develop our propositionfurther.' For further information please contact: Chariot Oil & Gas Limited +44 (0)20 7357 9477 Peter Kidney, non-executive Chairman Kevin Broger, CEO KPMG Corporate Finance, a division of KPMG LLP (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, Harriet Pask - [email protected] Capitalised terms in this announcement have the same meaning as in the Company'sAdmission document. Not for release, publication or distribution, in whole or in part, in or into theUnited States, Canada, Australia, Ireland or Japan. 19 May 2008 Chariot Oil & Gas Limited Placing and admission to trading on AIM Chariot Oil & Gas Limited, an independent oil and gas exploration group, focusedon the exploration of the South Atlantic margins, specifically Namibia, today announcesdetails of a Placing and Admission of its Ordinary Shares to trading on AIM, a marketoperated and regulated by London Stock Exchange plc. Based on the Placing Priceof 130 pence per Ordinary Share, the Company is expected to have a market capitalisationof approximately £183.5 million at Admission. The Ordinary Shares will trade onAIM under the symbol: 'CHAR'. KPMG Corporate Finance is acting as Nominated Adviser and BMO Capital Markets Limitedis acting as Broker to the Company. Kevin Broger, CEO of Chariot said: 'We are very pleased to announce the admissionof Chariot to AIM as we believe it presents a highly prospective investment opportunityin oil and gas exploration. Namibia is a frontier exploration region with regardsto oil and gas, but our exploration efforts to date strongly suggest that our Blocksmay hold significant hydrocarbon accumulations. This evidence is further supportedby the fact that our Blocks have analogous geology to the petroliferous provincesoffshore Brazil and Angola with which they share a common geological history andpetroleum system style. Admission to AIM positions us well to develop our propositionfurther.' Placing Statistics * Placing Price (per Ordinary Share) 130 pence * Total number of Placing Shares being issued pursuant to the Placing 34,615,000 * Number of Ordinary Shares in issue following Admission 141,173,471 * Market capitalisation at the Placing Price on Admission £183.5 million * Estimated gross proceeds of the Placing receivable by the Company £45.0 million Key investment highlights * a portfolio of oil and gas exploration Licences in Namibia, both offshore andonshore; * the engagement of HRT Petroleum, a global petroleum system specialist, whois applying the same suite of analysis tools which have previously led to large discoveriesoffshore Brazil; * identification of one Prospect and six Leads to date. Three of the Leads identifiedcomprise a multi-layer Prospect and may be considered as such; * a mean prospective resource volume of 3.9 billion barrels of oil; * a management team that has the exploration and commercial expertise to leadthe development of the Group's assets; and * preliminary discussions underway with a potential farm-out partner to providefunding, mitigate risk and expedite exploration and potential development. Chariot's assets Chariot was incorporated in Guernsey on 13 August 2007, and is the holding companyfor the Group which is involved in oil and gas exploration focusing on the SouthAtlantic margins, specifically Namibia, using state of the art technology for offshoreexploration. The Group currently holds licences covering ten Blocks in Namibia, eight of whichare offshore and two of which are onshore. All of these Blocks are currently in theexploration phase. In order to progress such exploration, the Group has engaged theservices of a global petroleum system specialist, High Resolution Technology & PetroleumLtda ('HRT Petroleum') as the Group's independent technical consultant. HRT Petroleumhas extensive experience of the application of deep water technologies in the discoveryof new oil and gas fields from its prior work on the South Atlantic margins (primarilyin Brazil but also in western Africa). HRT Petroleum has developed specialist technologieswhich have previously led to large discoveries offshore Brazil and these are beingapplied to Chariot's Blocks. The exploration focus to date has been to use thisexpertise and state of the art technology to build a basin model for Namibia. HRT Petroleum has carried out a petroleum system and hydrocarbon evaluation of theBlocks, analysing a significant amount of seismic and other data. Interpretationof this data has led to the identification of one Prospect and six Leads. Three ofthe Leads identified comprise a multi-layer Prospect and may be considered as such. Following the integration of all data collected to date, together with the applicationof a volumetric calculation, HRT Petroleum has predicted that the Prospect and thesix Leads identified to date contain: • a mean original oil in place of 15.7 billion barrels; and • a mean prospective resource volume of 3.9 billion barrels of oil The Group has developed a work programme that will enable the current Prospect andLead inventory to be further explored. Kevin Broger, CEO, has over 22 years in the oil and gas industry and previously workedas Team Lead Brazil New Ventures at Encana, one of Canada's leading explorationand production companies. Peter Kidney, non-executive Chairman, has over 25 yearsexperience in the natural resources sector and was a founding director and is currentlynon-executive director of AIM company Providence Resources. Offshore Namibian basins The Namibian offshore basins are located in the south-eastern part of the South Atlanticmargin (on the west African side) and extend from land out to the 3,000 metre isobath.These basins are directly related to the rifting of the African and the South Americanplates during the Lower Cretaceous period. Evolution of the South Atlantic rift startedin the Jurassic era with a rift system that evolved into the passive margin basinsof the present day. The Group, by using HRT Petroleum's expertise and experience, has found a generalsimilarity between the southern Brazilian giant petroliferous provinces, such asthe Greater Campos and Santos Basins, and the west Namibian margin basins. The absenceof a specific salt sequence in offshore Namibia has resulted in a different evolutionfor some sediments and which consequently has affected trap formation and other characteristics.However, importantly, the rift and sag sequences are very similar to those observedin the Greater Campos Basin. As a result, one can predict possible exploration analoguesoffshore Namibia. Company strategy In the short term, the Group's strategy is to continue to explore the potentialresources within its Blocks and to obtain further data to clarify the Prospect andLeads that have been identified by HRT Petroleum. A critical element of the Group's strategy will also be to explore the possibilityof a farm-out agreement with a major oil company to provide funding, mitigate riskand expedite exploration and potential development. Preliminary farm-out discussionswith a major oil company have been initiated by the Group. These discussions areat an early stage and there is no certainty that an agreement will be reached. Furtherfunding, via a farm-out or otherwise, will be required by the Group to scale-up itsexploration activities and to enable drilling to take place in the future. In addition to the continued exploration and development of its existing Blocks,the Directors also intend to introduce production cash flows and other explorationopportunities. The Directors' intention is primarily to remain focused on the SouthAtlantic margins to capitalise on its current and developing experience and expertisein this area. Reasons for the Placing and Admission The primary purpose of the Placing is to raise sufficient funds to allow the Groupto continue with the exploration of its Blocks, to develop the Prospect and Leadsidentified to date and to provide the Group with additional working capital to executeits business strategy outlined above. The Directors consider that Admission will be an important step in the Group's developmentand will enhance its standing in the market. It will also enable the Group to accessfinance which may be required in order to allow the Group to progress its currentand future developments and, if the Board so determines, to expand in its chosenmarkets both organically and through selective acquisitions. Use of proceeds The Company is seeking to raise £40.5 million (after expenses) through the Placingwhich will be used to: * continue the Group's current exploration programme and, in particular, toensure the Group is able to fulfil its work programme obligations under the Licences.The proceeds on Admission are expected to fund the Group's work programme over thenext two years; * repay Shareholder Loans; * provide working capital and funds for general corporate purposes; and * evaluate and potentially fund new projects. Expected timetable * Admission effective and dealings commence on AIM 19 May 2008 * Despatch of definitive share certificates 2 June 2008 For further information please contact: Chariot Oil & Gas Limited +44 (0)20 7357 9477 Peter Kidney, non-executive Chairman Kevin Broger, CEO KPMG Corporate Finance, a division of KMPG LLP (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, Harriet Pask [email protected] Capitalised terms in this announcement have the same meaning as in the Company'sAdmission document. Copies of the Admission document will be available for a period of one month fromthe registered office of the Company, situated at Sydney Vane House, Admiral Park,St. Peter Port, Guernsey, GY1 2HU, the offices of the Company's adviser as to Englishlaw, Memery Crystal LLP, 44 Southampton Buildings, London, WC2A 1AP, United Kingdomand the Company's nominated adviser, KPMG Corporate Finance, 8 Salisbury Square,London EC4Y 8BB, United Kingdom. The Admission document is also available at theCompany's website: www.chariotoilandgas.com KPMG Corporate Finance, a division of KPMG LLP which is authorised and regulatedby the FSA for the conduct of investment business in the United Kingdom, is actingas nominated adviser to the Company is connection with the matters relating to thisannouncement. KPMG Corporate Finance is not acting for any person other than theCompany and will not be responsible to anyone other than the Company for providingthe protections afforded to its clients or providing advice in relation to the contentsof this announcement or for any arrangement described in this announcement. BMO Capital Markets Limited, which is authorised and regulated by the FSA and isa member of London Stock Exchange plc, is acting exclusively for the Company, asbroker, in relation to the Placing and will not be responsible to anyone other thanthe Company for providing the protections afforded to clients of BMO Capital MarketsLimited or advising any other person on the Placing. Notes to editors: 1) Namibia Namibia is located on the Atlantic coast of southern Africa. It shares borders withAngola and Zambia to the north, Botswana to the east and South Africa to the south.Namibia is an ethnically diverse republic which gained political independence fromSouth Africa in 1990. Since becoming independent, Namibia has operated as a stabledemocracy and the country currently has a population of approximately 2.1 millionpeople. The Namibian government has also pursued free-market principles designedto promote commercial development and has actively encouraged foreign investment.The Namibian Foreign Investment Act, which was passed in 1990, provides for freedomfrom nationalisation, freedom to remit capital and profits, currency convertibilityand a process for settling disputes equitably. Namibia's 2007 gross domestic productwas US$6.7 billion and its gross domestic real growth rate was 4.5 per cent. (Source:Central Intelligence Agency World Fact Book.) Namibia has a country risk profileof BBB, putting it on a par with Brazil and South Africa (Source: Economist IntelligenceUnit). Namibia has a variety of natural resources and is a significant producer of diamonds,uranium, zinc and copper. The country is also a source of gold, lead, silver, tin,vanadium, gemstones, tantalite, phosphate, sulphur and salt. The economy of Namibiais currently heavily dependent on the extraction and processing of such mineralsfor export and at present, mining, being its second largest industry, representssome 20 per cent. of Namibia's gross national product. A number of major resourcecompanies are already operating in Namibia including Anglo American plc, Areva CI,BHP Billiton Limited, De Beers SA and Rio Tinto plc. 2) Namibian oil and gas resources The Namibian oil and gas sedimentary basins are relatively under-explored frontierbasins for hydrocarbon accumulations. To date, there has been a total of 14 wellsdrilled offshore Namibia. Of these, seven were classified as exploratory while sevenwere development or appraisal wells in the Kudu field, which is so far the only commercialhydrocarbon system discovery offshore Namibia. Five of the seven exploration wellswere drilled in shallow waters. The only two deep water wells drilled up to now,are located in the Walvis Basin (well 2012/13-1 which was drilled by Sasol in 1995)and in the L¼deritz Basin (well 2513/8-1 which was drilled by Norsk Hydro in 1998).These wells were not found to contain the necessary evidence to support further explorationin these areas. Over the past four years, in the Directors' opinion, there has been increased interestin Namibia as a prospective region for oil and gas exploration driven by enhancedglobal deep water offshore experience and expertise, improved gas prices and demandfor gas off-takes and there is also new evidence which suggests that Namibia mayhave oil resources as well as gas. The offshore Namibian basins can also be consideredstrategically important, being located in close proximity to South Africa's energymarket. The Kudu field, as the only proven hydrocarbon system offshore Namibia to date, islocated in the southern portion of offshore Namibia off the mouth of the Orange River.The field is thought to contain over 3 trillion cubic feet of gas (Source: TullowOil). With power shortages facing the southern African region, the Namibian governmenthas committed to the development of this field. Other companies that are already operating offshore of Namibia include BHP BillitonLimited, Hunt Oil Co, Neptune Petroleum Limited and Sintezneftegaz Namibia Limited.In 2007, Sintezneftegaz Namibia Limited announced its intention to drill a new explorationwell in Block 1711 situated in the Namibe basin off the northern coast of Namibiaand drilling commenced in April 2008. 3) Namibia - conjugate margin to Brazil The Namibian offshore basins are located in the south-eastern part of the South Atlanticmargin (on the west Africa side) and extend from land out to the 3,000 metre isobath.These basins are directly related to the rifting of the African and the South Americanplates during the Lower Cretaceous period. Evolution of the South Atlantic startedin the Jurassic era with a rift system that evolved into the passive margin basinsof the present day. The Group, using HRT Petroleum's expertise and experience, has found a general similaritybetween the southern Brazilian giant petroliferous provinces, such as the GreaterCampos and Santos Basins, and the west Namibian margin basins. The absence of a specificsalt sequence (Aptian) in offshore Namibia has resulted in a different evolutionfor some sediments (post Aptian) which consequently has affected trap formation andother characteristics. However, importantly, the rift and sag sequences are verysimilar to those observed in the Greater Campos Basin. As a result, one can predictpossible exploration analogues offshore Namibia. In the southern Brazilian petroliferous provinces, there have recently been somesignificant discoveries of hydrocarbon reserves in the deeper horizons of the GreaterCampos Basin, estimated to hold between 12 and 30 billion barrels or more of oilequivalent in three fields (Source: BG Group). Such discoveries were achieved furtherto the drilling of over 1,100 exploratory wells in the Campos Basin and 117 wellsin the Santos Basin. Only two deep water wells have been drilled in offshore Namibia to date, it is therefore,at present, a highly under-explored region. However, the Directors consider thatevidence of the presence of identical elements and processes of active petroleumsystems, coupled with the application of HRT Petroleum's proven technology enhancesthe opportunity presented by the Group's assets. In particular, there is both direct and indirect evidence in Namibia of the presenceof the same source rocks to those of the Brazilian counterpart basins with respectto their depositional sequences, rock types and oil fingerprinting. Direct evidenceincludes the penetration of organic-rich, high total organic carbon intervals inexploration and deep sea drilling project wells, penetrations of potential reservoirzones with shows of oil and gas, and the accumulation of gaseous and liquid hydrocarbonsin the Kudu field. Indirect evidence includes potential gas chimneys and gas hydratezones recognised on seismic data, and the presence of oil seeps detected using RADARSATimagery. 4) Chariot Board of Directors * William Peter Kidney (aged 52), non-executive Chairman, is a fellow of theInstitute of Chartered Accountants and has 25 years of experience in natural resources,including oil and gas. He was previously the Chief Executive Officer of the quotedmining company, ARCON International Resources Plc which was taken over by LundinMining in 2005. He is also a founding director and currently a non-executive directorof Providence Resources Plc, an oil and gas exploration and production company admittedto trading on AIM. From 2004 to 2006, Peter also acted as the Chairman of the IrishMining Industries Association, IMEG. * Kevin Eric John Broger (aged 47), Chief Executive Officer, has over 22 yearsof oil and gas industry experience. Prior to joining Chariot, he was Team Lead BrazilNew Venture Explorations for Encana Corporation, one of Canada's largest explorationand production companies, where he was responsible for developing its Brazil explorationasset base of offshore blocks. He was actively involved in significant discoveriesin 2003 in Brazil and in 1993 in Alberta. He is a qualified geologist and is a professionalmember of a number of Canadian geological 25 and geophysical societies. Kevin hasa degree in Geology from the University of Waterloo in Ontario, Canada. * Heindrich Steven Ndume (aged 45), Country Director Namibia, is a Namibian nationalwith mining exploration experience throughout sub-Saharan Africa. Heindrich has playeda unique role within the development of Namibia's mining and energy strategies,including acting as National Energy Council Secretary and World Energy Council Representativefor the Namibian Ministry of Mines and Energy. He was also one of the founding shareholdersof Greendale and Enigma. * James Everett Burgess (aged 44), Commercial Director, set up Everett FinancialManagement Limited in 1992 and sold it in 2003, since when he has been involved innumerous fund raisings and admissions to trading on AIM by a number of companiesin the energy and resource sectors operating largely in the African continent. Priorto Everett Financial Management Limited, James worked with Hoare Govett, which isnow part of ABN Amro. He is a non-executive Director of a number of companies, includingChromex Mining plc and European Business Jets plc both of which are listed on AIM. * Adonis Pouroulis (aged 38), non-executive Director, is the founder and thechairman of Petra Diamonds Ltd, a pan-African diamond mining company admitted totrading on AIM. He is also a consultant to Sirius Investment Management LP Incorporated,a fund management company active in raising capital to help finance early stage exploration.Adonis has extensive experience in the discovery and exploration of natural resourcesand bringing them into production, in particular within the mining industry. * Norman Leighton (aged 57), non-executive Director, is the owner and a co-directorof Leighton & Leighton SNC, a company specialising in international trust and corporateadministration. Norman has extensive experience acting as non-executive Directorfor a large number of companies. He is a Chartered Accountant and qualified as afellow of the Institute of Chartered Accountants in England and Wales in 1984. Heis a member of the Institute of Directors and of the Society of Trust and EstatePractitioners. Norman represents the interests of ICM, a major shareholder of Chariot. * Robert Archibald Gilchrist Sinclair (aged 58), non-executive Director, is managingdirector of the Guernsey-based Artemis Company and a director of a number of investmentfund management companies and investment funds associated with Artemis Company. Heis Chairman of Schroder Oriental Income Fund Limited, a director of ING UK Real EstateIncome Trust Limited and chairman of its audit committee. He is a Fellow of the Instituteof Chartered Accountants in England and Wales and is resident in Guernsey. Robertrepresents the interests of Westward, a major shareholder of Chariot. 5) About HRT Petroleum: HRT-Petroleum is a leading consulting and service company in the areas of petroleumexploration & production and the environmental sciences at the hub of the oil andgas business in Latin America- Rio de Janeiro, Brazil. Its team of professionalswith extensive domestic and international experience provides complete analysis andinterpretation services in basin modeling, exploration risk assessment, petroleumgeochemistry, seismic interpretation, structural geology, biology, oceanography andenvironment licensing and monitoring. These services include multi-client, analyticalservices, integrated studies and related consulting for the petroleum industry. 'This announcement may not be released, published or distributed, in whole or inpart, in or into the United States. This announcement is not an offer of securitiesfor sale in the United States. Securities may not be offered or sold in the UnitedStates absent registration under the US Securities Act of 1933 or an exemption fromregistration. The Company does not intend to register any part of the Placing inthe United States.' The distribution of the Ordinary Shares in Canada is being made only on a privateplacement basis exempt from the requirement that the issuer prepare and file a prospectuswith the applicable securities regulatory authorities. The securities being offeredpursuant to this document are not listed on any stock exchange in Canada and thereis currently no public market for such securities in Canada. Chariot is not a reportingissuer within the meaning of applicable Canadian securities laws and is thereforeexempt from compliance with any disclosure obligations that may be applicable toother Canadian public companies. Chariot currently has no intention of filing a prospectuswith any securities regulatory authority in Canada to qualify the resale of its OrdinaryShares to the public, or listing its Ordinary Shares on any stock exchange in Canada.Accordingly, to be made in accordance with securities laws, any resale of the OrdinaryShares in Canada must be made under available statutory exemptions from registrationand prospectus requirements or under a discretionary exemption granted by the applicableCanadian securities regulatory authority. The above restrictions may severely restrictCanadian purchasers of Ordinary Shares from reselling the Ordinary Shares in Canada. All statements other than statements of historical fact, contained in this announcementconstitute ''forward looking statements''. In some cases forward looking statementscan be identified by terms such as ''may'', ''intend'', ''might'', ''will'',''should'', ''could'', ''would'', ''believe'', ''anticipate'',''expect'', ''estimate'', ''predict'', ''project'', ''potential'',or the negative of these terms, and similar expressions. Such forward looking statementsare based on assumptions and estimates and involve risks, uncertainties and otherfactors which may cause the actual results, financial condition, performance or achievementsof the Company, or industry results, to be materially different from any future results,performance or achievements expressed or implied by such forward looking statements.Factors that might cause such a difference include, but are not limited to, thosediscussed in Part 1 of the Admission Document entitled ''Risk Factors''. Newfactors may emerge from time to time that could cause the Company's business notto develop as it expects, and it is not possible for the Company to predict all suchfactors. Given these uncertainties, prospective investors are cautioned not to placeany undue reliance on such forward looking statements except as required by law.Save as required by law, the Company disclaims any obligation to update any suchforward looking statements in the announcement to reflect future events or developments. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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