Chariot Ltd. (OIGLF)

[douginil]

Chariot Oil & Gas

[[ Thanks to Malcy's blog ]]

May 24, 2021

Chariot has announced that further to the Company’s announcement released at 4.56 p.m. on 24 May 2021, the Bookbuild has closed and the Company has conditionally raised gross proceeds of US$16.5 million (£11.7 million) through the successful Placing of and Subscription for 212,553,929 of New Ordinary Shares, at the Issue Price of 5.5 pence per Ordinary Share.

In addition to the Placing and Subscription, and as set out in the Launch Announcement, the Company proposes to raise up to a further US$5 million (£3.5 million) by the issue of New Ordinary Shares ‘pursuant to an Open Offer to Qualifying Shareholders at the Issue Price on the basis of 1 Open Offer Share for every 6 Existing Ordinary Shares held on the Record Date’. Qualifying Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares through the Excess Application Facility. Details of the Open Offer and the action to be taken by Qualifying Shareholders to subscribe for Ordinary Shares under the Open Offer will be set out in the Circular, which will be sent to Shareholders on 28 May 2021.

Magna Capital LDA (of which Adonis Pouroulis is a substantial shareholder) has conditionally agreed to underwrite the Fundraising, ensuring that the total fundraising will equate to approximately US$23 million (£16.3 million) before expenses, by subscribing, in two tranches on or before 31 January and 28 February 2022, for new Ordinary Shares at the Issue Price. Mr. Pouroulis has personally sub-underwritten the Underwriting Commitment. The Underwriting Commitment is transferable at Magna’s sole discretion and shall reduce in equal proportion to any funds received separately by the Company from the Open Offer, a farm-in or a fundraise.

The gross proceeds includes US$3.4 million (£2.4 million) conditionally raised from certain of the Company’s Directors, as part of the Subscription. The Placing Shares and Subscription Shares represent in aggregate 54.7 per cent. of the Company’s Existing Ordinary Shares. The Issue Price represents a discount of approximately 29.58 per cent. to the mid-market closing price on the London Stock Exchange of 7.81 pence per Ordinary Share on 21 May 2021.

The net proceeds of the Fundraise will be used to drill an appraisal well at the Anchois Gas Development offshore Morocco to confirm the discovery, progress work programme on the acreage surrounding the Anchois gas discovery for future development, to integrate transitional power team and existing project, fund near-term power project and for general working capital purposes.

Adonis Pouroulis, Acting CEO of Chariot, commented:

“We are excited to announce the completion of today’s Placing and Subscription, subject to shareholder approval at the forthcoming General Meeting. This successful fundraise marks a key turning point in the evolution of the Company, as we seek to build a transitional energy business in Africa, that we believe will deliver value for all stakeholders. With the net proceeds, Chariot intends to accelerate the timeline of the Anchois Gas Development coming online, with a near-term appraisal well now in sight and the launch of Chariot’s Transitional Power division, following the acquisition of AEMP earlier in the year in partnership with Total Eren.

This fundraise will turbocharge our growth ambitions in both our transitional gas and transitional power businesses which are highly scalable in terms of both the prospective gas resources offered in Anchois and surrounding area, and in the pipeline of projects to provide clean power to mining and industrial clients in Africa.

We encourage and welcome existing shareholders to join us on this exciting journey through the Open Offer and look forward to providing further updates on our progress in due course.”

This news today is most important and I’m sure will cement Chariot as a key player in Africa for both gas and renewable energy. Indeed I would suggest that the moves that have been made by Adonis Pouroulis since he took over have made Chariot a unique story in Africa and with potentially substantial upside.

The moves that have been made since then have the effect of considerably de-risking Chariot, at Anchois, where significant work has been done looks a lot more robust now that this raise confirms a well will be drilled this year. The cost of drilling this well seem to be lower than the expectations next year and that this year provides the company with a window of cheaper costs.

Apart from Anchois, the moves that they have made with regard to the partnership with Total Eren look to me to be able to be bracketed in that rare ‘company maker’ situation. The opportunities in the African mining industry and the use of renewables will be found by the management and financed by access to Total’s inexpensive debt makes this, exclusive deal seem copper bottomed to me. Talk of 500 MW or even a GW are not impossible and with 1.2bn people on the continent rising to 2bn mean that sustainable, green ESG compliant energy will be the place to be.

This financing is clearly significant for Chariot and whilst the discount has been commented on I feel that the ability to get some institutional investors on board is a justifiable price worth paying. Indeed the fact that this management has delivered a lot this year, and at this stage the CEO is putting a substantial amount to take part in the raise via direct investment, as well as his underwriting of what looks like an attractive offer which has been structured so that existing investors can participate at the same price looks eminently backable to me.

The deals this year, combined with the opening up of Chariot into being a major player in gas and renewable power for Africa’s huge mining industry and operating in at least 17 countries with an existing presence assured, plus the backing of the exclusivity of the partnership with Total looks like a no-brainer to me. A unique story, without doubt I would say that weans Morocco off coal for power and supplies a huge basic industry with renewable power.

Read at:
https://www.malcysblog.com/2021/05/oil-price-chariot-ujo-reabold-serica-hurricane-touchstone-and-finally/