Chariot Directs All Efforts at Morocco
UK registered explorer Chariot is shedding staff and restructuring its corporate strategy to focus on the Lixus licence off Morocco and develop an onshore business in the "attractively priced" gas supply business there, it said April 9.
It said that "elephant scale exploration activity in frontier regions has, aside from a few notable exceptions, fallen out of favour with the market and industry appetite is now focused on the environmental and social impact of energy projects and their governance ("ESG")." The Lixus asset scores highly as gas can help Morocco move to a lower carbon economy.
Within Lixus, Anchois contains significant upside exploration potential of perhaps 580bn ft³, of which 423bn ft³ are independently audited.
The company will look to manage the remainder of its portfolio in Morocco, Brazil and Namibia, with a focus on value, quality and fit. However, it says that it will be on the lookout for mergers and acquisitions that "expose value-accretive growth assets." It opened a data room for its Brazil and Morocco assets in September and while no partner has been found, it said the industry response was "positive."
CEO Larry Bottomley described Lixus as an asset that could be of strategic importance to Morocco. "The country has a growing economy and is one of the most attractive places to operate in the world. The partnering process for Lixus has endorsed our excitement for this project, and we remain highly motivated to deliver value from Anchois and the additional potential of the Lixus licence over the coming years," he said.
Other producers operating onshore, such as SDX and Sound have commented on the relatively high prices paid by end-users and the country's low tax regime.
As part of its target of 45% annual running costs from $4.mn to $2.5mn, it is making redundancies and halving the directors' fees and salaries and replacing them with share awards. It ended the year debt-free with no work commitments and with $9.6mn cash.