Chariot Limited (CHAR) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. My name is Adonis Pouroulis. I welcome you to the 2020 Annual General Meeting Presentation of Chariot Oil & Gas. Along with me, I have my 2 colleagues, Duncan Wallace and Julian Maurice-Williams with me over here, and the 3 of us will be presenting Chariot to you today. If we could move on to Slide 3, and this slide really says it all. Since we started the company, we've partnered with majors. We drilled 4 potentially transformational, but dry wells and 2 of those were as operator, and we secured 1 Tcf of gas resource. But when you look at this slide, it's not a very pretty slide. And it's -- as an investor myself and one of the largest shareholders, it's really painful to look at this. So from 2014 to today, our share price has had a couple of spikes, but it's really all been downhill. And there's only so much we can blame on the paradigm shift in the oil and gas industry from 2014 to now. Because if you look around us, it's been a tough environment, and yet some of our peers have done a lot better than we have done. So clearly, whatever we've done in the past, hasn't really worked for the shareholder, and we need to address it because when you look at this, we really, as a team, have not created much value for the shareholder. But as we know, the past doesn't equal the future. And in this sort of fast-paced changing world, we can also say that the future doesn't -- the future is not what it used to be. And the question is, what did we learn from the past and how do we do things differently to change this graph. So if we move onto Slide #4. As I said earlier on, the 3 executives of Chariot will be presenting. We have a new team. We have a new focus. There's certainly new energy and new creativity in the team today. And we're bringing not only strong technical expertise, but there's -- I would like to think a new entrepreneurial spirit that's coming into the organization. As I said, my name is Adonis Pouroulis. I'm a mining engineer by trading. I have got my experience on the African continent over the last 25 years and have built and brought on several big mining projects. Today, we have, as a broader group, a presence in 17 countries in Africa. And as I said, largely in the mining space. However, I did start 2 oil and gas companies in 2006 and '07. And of course, Chariot Oil & Gas was one of those and was very instrumental in listing Chariot in 2008. At the moment, as you know, I'm the acting CEO, and I've been a member of the Board since the company IPO-ed in 2008. I'd like to ask my colleagues, Julian and Duncan also to give you brief overview of themselves.

Thank you, Adonis. So I'm Julian Maurice-Williams. I'm the CFO at Chariot. Now I'll talk a little bit about myself and my career. So I loved working with entrepreneurial businesses who shoot the stars, and I've done exactly that for my entire career. So fresh out of University, I helped set up a business. I then joined BDO, one of the largest professional services firms in the world to educate myself further in business and get my chartered accountancy qualification. I'd an amazing time there, where I was a part of the natural resources team, where I managed lots of small, medium oil and gas and mining clients based all over the world doing lots of different transactions. I then joined Chariot initially as group Financial Controller and then later as CFO. From my perspective, what I love about Chariot as a business and the Anchois project more specifically is the scalability, that we shoot for the stars. But also, the Anchois project is very, very fundable, and I'll be talking a little bit more about this later in the presentation.

Thanks, Jules. Yes. So Duncan Wallace here, I'm the Technical Director of Chariot, appointed to the Board recently. My background is in geology and petroleum geology, I have around 20 years of experience working in E&P projects. And I joined Chariot in 2013 as exploration manager. So overseeing the exploration activity since that point, managing farm down processes and also executing new ventures activity, which in 2018 and '19 sort of identified and captured the Lixus Offshore area in Morocco, including the Anchois Gas discovery. I think the experience that I was able to call upon was 12 years with Perenco, prior to joining Chariot and a fundamental part of that work was creating value from existing, but undeveloped discoveries during my time there. So I'll hand back to Adonis with that.

Thank you, Julian and Duncan. If we can move on to Slide #5. This is the world we live in today. We can see that the macro environment tells us that there's a serious drive to move away from the world's energy reliance on primarily hydrocarbons. And you could see some of the largest companies in the world, the major oil and gas companies shifting their plans to move to more -- towards a more green renewable energy environment. And the sort of the mantra, no more oil please, is being spoken of repeatedly. At the same time, it wasn't not 10 years ago, where Exxon was one of the largest, if not the largest company in the world. And we can see that a company like Tesla which really produces very little revenue compared to Exxon has overtaken it by market capitalization. Last week on Monday, Tesla did a 4 -- 5:4:1 split in its equity and in one day, its market cap jumped by $57 billion, eclipsing the entire market capitalization of General Motors. So something is strange is going on in the world and certainly in the world of energy generation. We can also see that many countries around the world are looking at new energies to power up their economies and their grid systems. Hydrogen energy is spoken of repeatedly. It's not just the -- or at the wind and hydro and solar spheres that people are looking at. They're looking at all sorts of new ways in which we can change the energy environment. Of course, ESG is at the forefront of everyone's minds today. Institutional investing, the biggest tick boxing exercise you can have today is ESG. And we ask ourselves in that environment, what is the relevance of a pure oil and gas play in the ESG world, and there is certainly relevance, but it's becoming more difficult from an institutional point of view to not take the ESG into account when looking at carbon footprint, et cetera, et cetera. So if you look at that slide on the top right-hand corner, you can see the amount of money going into sustainable investing. At the same time, if you look at the bottom right-hand picture, where we're projecting population growth, most continent sort of plateau out over the next sort of 80 years, except Africa. Africa's population goes up 4x. But what we do know is that the demand for energy and power is not going anyway. There's going to be increased demand, and we then ask ourself, well how will we fulfill these demands going forward. The big advantage, as I said earlier in my presentation is that Chariot has a strong African presence. Its origins come out of Africa. And how do we become relevant? How do we play into this new environment where energy demands on the African continent are just going to increase year in and year out. So we move onto Slide #6. Over the last 5 or 6 weeks, we as a team at Chariot, have been doing some serious soul searching and asking the questions is why do we exist? What are we doing over here? Is our original business model relevant to what we're doing today? And we came up with a new mission statement, and we came up with what we call our value circle. So we believe that to keep Chariot relevant and indeed be a force for good, we need to create value and deliver positive change through investment in projects that are driving the energy revolution. And our values, which are described in that circle below are what we believe we need to live up to in order to realize our mission statement. Above all, we want to have a positive impact in whatever we do. But what does this mean? People talk about positive impact all the time. It means, in our world that we leave the environments, the community, the countries in which we operate, our shareholders and our employees in a better space after the fact. There was that better off after we've been there and done our business. But if we're going to have a positive impact on what we're doing, we need to have a serious attitude of collaboration with all of our stakeholders. We need to operate with integrity and respect for, again, the environment, the community, the shareholders, the employees and the countries in which we operate. But around all of this, if we are going to move into this new energy world, we need to be pioneering. We need to think out of the box. We need to be creative, entrepreneurial, and we need to provide solutions to a world that demands more and more energy. And everything we do and everything we strive towards in Chariot has to belong in this circle. If we are doing something that doesn't sync with this value circle that we have, we're doing something wrong. And in this, we stress that Lixus is a very key asset for Chariot because we believe that it is a positive impact project. If we move onto Slide #7, I'd like to hand over to Duncan, who will take you through our portfolio.

Thank you, Adonis. So currently, Chariot has operations in Brazil, in Namibia and in Morocco. So firstly, to describe the exploration portfolios that we have. I'll start with Brazil, where we have exploration prospects in the Barreirinhas Basin. That's on Brazil's equatorial margin and conjugate with Ivory Coast and Ghana. In these licenses, we've got a high working interest. We fulfilled all of our work commitments there. And we anticipate key wells to be drilled and offset blocks in the near term, and I'll describe those in more details later on in the presentation. Similarly, in Namibia, we also anticipate key offset wells from Total and Maurel & Prom over the next year or so, which will help to inform the residual potential of our PEL-71 license on which you'll be aware we drilled the Prospect S well in 2018. We have a sort of remaining portfolio of prospects there in excess of 1 billion barrels that may have value informed by that offset drilling activity. In both of those countries, recognizing this upcoming third party activity, we do have active data rooms ongoing. But the main update to the portfolio are in Morocco, where we have exploration opportunities across multiple licenses, but really focus of today's presentation and update will be on the new reprocessed seismic data on the Lixus license area and especially the impact on the resources at the Anchois Gas field. The revaluation of this data has given us important upgrades on the associated resource potential. So if we move to the next slide, Slide 8. This lays out our Moroccan focus, we've been active in country since 2012, and our licenses are located offshore in the Atlantic region, stretching from Casablanca through RABAT and up to Tangier. As you can see from the charts there, Morocco is a growing economy. It relies on imports for nearly 100% of its primary energy needs, and those needs are growing at around 4.5% per annum. So doubling approximately every 15 years. From the pie chart, you can see the power generation, it's -- well it's also growing at a similar rate. And Morocco does have a stated aim to transition towards renewables and gas to become a larger component of the energy mix. But on that pie chart, you can see that and there is still a heavy reliance on coal for power generation. Approximately 2/3 of the power supply comes from coal. So clearly, by increasing the amount of gas in that power generation mix, there'll be a positive impact on the overall carbon emission rates for power generation. On the map, you can see how strategically well-located the Lixus Offshore block is and the Anchois project. There is key gas infrastructure existing in close proximity to that area. 2 gas-fired power stations at Tangeir, at Tahaddart and Ain Beni Mathar close to the Algerian border. And we can get connection into those power stations using the Maghreb-Europe-Gas Pipeline that runs with only about 75 kilometers from the Anchois field location. So it is ideally located to access those markets. We've also seen as the gas market has developed, there are attractive gas prices established from others, both for power at around $8 per mmbtu and for industry in the range of $10 to $11 per mmbtu. The most important update we've done on Lixus that we announced yesterday was the completion of the reprocessing of the 3D seismic data that you can see in pink color fill in the license area. And the impacts of the resource assessment on the Anchois field, which I will begin to discuss in the next slide. So moving to Slide 9. This slide shows the improvements of the seismic data. So on the left-hand side, there are 3 panels, which show examples of the legacy time-migrated data that we were able to inherit from previous operators. And then on the right-hand side, the same line, but shown on the new pre-stack depth migrated data that we received early this year. And we've recently received an updated independent resource assessment from Netherlands to Sewell. And the upper panel shows the impact of the data quality on the Anchois Gas field. You can see that the improvement, if we look at the B Sand, you can see that there is much better amplitude balance. So underneath where the A Gas Sands are, the shadowing and dimming effects that were seen on the original data. We've now had a recovery of the amplitudes. Also, you can see that we have better depth control. Those B Sands are not pushed down beneath the A Sands like they were on the original data, and we have a much flatter and more consistent structure that fits much more closely with the conformance of the associated seismic attributes. We also recognize an additional reservoir target called the O Sand which forms 2 prospective targets, one in Anchois, deep beneath the Anchois-1 well and the other -- the new Anchois foot wall prospect to the right-hand side of that image. And I'll describe those later on. The middle panel shows an example of a new prospect, which is currently in evaluation. But it shows the improvements versus the original data where we have a very low amplitude dim zone and out of that zone, we've been able to recognize potential for stacked gas pay on the new data. So an example of a new prospect that we've been able to recognize on that new data under evaluation currently. And finally, on the lower panel, this shows an improvement in the imaging of the deeper sub map stratigraphy. This is the meters exception, so Cretaceous and Jurassic, sitting underneath the [indiscernible] [ stone ]. We see a dramatic uplift and recognition of potential structural closures, that could be analogous to legacy oilfields in the onshore part of the RAB basin. And this is an area of active exploration where ConocoPhillips recently signed a reconnaissance license. And so those are some seismic examples, but to go through the details of the Anchois resource upgrade. And if you go to Slide 10, this slide depicts those upgrades in resources associated to that reprocessed data set. The impact on the discovered gas, so the contingent resources is in the A and B Sands. Has been an uplift of around 30% in the low estimate of 1C resources and approximately 20% in terms of the 2C resources, which now sit at 361 Bcf. On this section, in the central part of the slide, you can see in red, the distribution of those 2C resources in the A Sand and the B Sand that were drilled in the original Anchois-1 well. And so the 2C resources are basically attributed to that main fault block that was drilled by that initial discovery well. We've -- on the new data maps additional fault blocks to the west of the well. You can see that on the left-hand side of the image. At the B Sand level, we can see the extension towards the West. And at the S Sand 3C resources are an extra 128 Bcf compared to the 2C resources, and that's really from those additional fault blocks. But the most significant upgrade we've seen in the resource assessment has come in terms of the prospective targets. The recognition of this deeper O Sand gives around 358 Bcf of 2U resources beneath the original well. And to the right, around 147 Bcf of resources in the Anchois footwall prospect. The other prospective sands that we've recognized are the C&M Sands. These are the lowest risk of those prospective Sands with a chance of success better than 1 in 2. And those Sands are low risk because at the equivalent level to the C Sands and the original well, we recognized a gap space in thin sands, which improve on the seismic data update and towards the East. And in the M Sand, the original well encountered very good quality, but water bearing sands, and we see an improvement of the seismic attributes as we move up depth towards the East. And overall, the C&M target of about 185 Bcf. In terms of the impact on what this means, really, these additional sands we've recognized are low-risk and low-cost targets, which can be accessed through any appraisal or development drilling at the Anchois A and B Sand. This materially impacts the potential value that can be attributed to any appraisal well drilled on the on field. The map on the upper left shows the distribution of those sands and how those potential appraisal wells and exploration side tracks can be drilled to penetrate multiple stacked Gas Sand targets. So in terms of overall update on the Anchois Gas field development, moving to Slide 11. This summarizes the progress recently. So on the resources, the 3D PSDM reprocessing has been completed. And we have an updated independent assessment completed, and we've seen a material uplift in resource volumes that you can see and the percentage uplift compared to the 2019 assessment on the legacy seismic data. In terms of the development planning, we've completed additional reservoir and integrated asset modeling. With that work, we then commissioned a Pre-FEED Study with a major engineering consultancy group called Xodus. With them, we defined a reference development case, assuming a 70 million cubic feet a day initial production rate. That's equivalent to about 600 megawatts of power production. And the early results from that work have confirmed that the development concept requires industry standard technology, but there are no red flags in terms of field architectural pipeline routines, and the estimated CapEx at this stage of work is approximately 30% lower compared to the similar concept of feasibility study stage back in 2019. Work continues on the engineering and the development plan to continue to reduce uncertainty around those cost estimates and timings. And so on Slide 11, I'll pass over to Jules to update on gas market and funding.

Thank you, Duncan. If we now turn on to the next slide, which I think is Slide 12. Firstly, let's talk about gas market and why it's important to the Anchois project. So gas, unlike oil is generally more difficult to transport, and therefore, it helps significantly if you have a large and growing market nearby. And this is what is brilliant about the Anchois project. Not only is it a great asset with material amounts of gas and a simple development, but it's also next to a large and growing gas market in Morocco with prices that are a multiple of Henry Hub. In addition, as Duncan has already said, through the Maghreb-Europe Pipeline, which is very close, we potentially have access to the European market as well. So what have we been doing? Well we've been having discussions with as many parties as possible. And that includes the state electricity company, obviously, but also other private power generation groups as well as industrial users. And we've also been in discussions with some of the largest Spanish gas players. If we now move onto funding. So there are 2 strands to funding. The first is the partnering process. Now we are pleased at how this is going, and we have new parties coming into our data now, including a consortium of industry players. Now we believe with this resource upgrade is going to further encourage further groups to come into the data. Now I know there has been a certain amount of frustration that the farmout has not been announced yet, and this is for 2 reasons. Firstly, the COVID situation has slowed everything down, but also, and more fundamentally we are not going to take a deal, which does not protect the value for shareholders. And if it takes a bit longer, it will take a bit longer. The second strand of the funding piece is debt funding for the development. And as I alluded to earlier, this is a very, very debt fundable project, and there are 2 reasons for this. The first is the project is very economic. And the second reason is that it ticks all the ESG boxes, as Adonis has previously spoken about. Now this project has already been reviewed by the major RBL providers, the major multilateral lending agencies. So from wealth funds, Moroccan banks, Nordic Bond providers and other debt providers, and they loved this project. And we are very hopeful that we will be able to announce something material on this shortly. And with that, I will hand back to Duncan.

Thanks, Julian. Moving onto Slide 13, moving back towards some of the geoscience displays, but this is to really show that with the new data, it shows how we can use this data to identify and derisk prospects across the wider Lixus area. So we can use insights from the results of the 4 previous wells drilled on block. And so not just the discovery at Anchois, but also those that were unsuccessful to calibrate the different seismic responses associated to different well results and then try to identify opportunities, which exhibit similar seismic attributes to the known Gas Sands as Anchois. So on the upper part of the panel, you can see the Anchois well logs, the gas discoveries in Sand A and Sand B, Thin Gas Pays at Sand C and then the water bearing M Sand at the base of those logs. And you can see on the spectral decomp display in the central part, how gas Sand A and gas Sand B show very bright colors on this display, which really is showing high amplitudes across the full frequency range, and that is quite a different response compared to the M Sands at the base of the well, which are good sands, but water bearing. So we already have one attribute that is potentially distinguishing a gas-filled reservoir versus water-filled reservoir. To the side of that, you can see the C&M Sand target, up-dip of the well and you see a similar brightening of the spectral decomposition display. On the left-hand side, on the B Sands, you can see an extension of the B Sand gas response across to the West, across different fault blocks, which is also detected on the maps on the right-hand side, both spectral decomp and also far offset anomaly. And other targets, for example, the Pliocene Prospect at Plie, which is currently under evaluation, is a shallow objective offset from Anchois that we are currently working on. There are also several further examples on the lower panel, where you can observe some of the exploration targets and you can see that there are characteristic seismic responses in the Anchois footwall prospect that has exactly the same spectral decomposition display as the proven A and B Sand discoveries at Anchois, and that has around 147 Bcf of best estimate resources. Also interesting analogs that come from further afield as one example there from the Balsam Field in Egypt, which exhibits very similar seismic responses in a known gas field. Pliocene prospectivity also continues in other prospects, for example, at Anchois West, as an example there, which is currently under evaluation and which may add significant additional resource potential to the 89 Bcf recognized already in the Miocene targets. And on the lower panel, you can see a calibration to the LAR-A1 well, which found high gas levels while drilling, but really very poor reservoir development. And you can see very dim colors on the spectral decomposition display. Tying across the macro central prospect, you can see things are quite different. You see the colors that are much more reminiscent of the Anchois Gas Sands, and we believe that supported the macro central has both reservoir and also gas fill and an existing 2 used resource estimate of 267 Bcf. We continue to use these calibrations across the portfolio, including the tonned and other prospects to upgrade the exploration potential, which Slide 14, attempt to show what that could mean for the longer term on block. So on Slide 14, the location map and the resource table are color-coded to show how we attribute resources by field and prospect area. If we sum the latest 2C and 2U resource assessments for Anchois, that's about 1 Tcf. By adding the Anchois satellite and other Lixus prospect evaluation from 2019, we estimate a total best estimate approaching around 3 Tcf of on block potential. But just to sort of show you work in progress, we've got some high-graded opportunities currently under valuation in pink. There are 7 opportunities highlighted there, and the current internal estimates from Chariot are around further 1 Tcf in those prospects. Beyond those targets, in the open polygons are some other features, which are currently under evaluation by the team, in both the post-nappe gas play and also in some of those sub-nappe structural targets that I touched on earlier. So what does this mean for the longer term? Well, if we take an indicative resource base, here, we use 1.2 Tcf. That's equivalent to adding the 2C contingent resource plus the risked 2U resource from the NSAI estimates. That could give gross revenues in the order of $9 billion using current gas prices for power generation. If we say this is delivered over a 25-year period, which relates to a standard exploitation concession, that would require approximately 5% per year of production growth from an initial 70 million cubic feet a day, fitting with the metrics that I outlined earlier when describing Morocco. So we look forward to providing updates as we mature further targets out of this exploration portfolio for the long term. On Slide 15, I will finish the review of the portfolio, discussing briefly Brazil and Namibia. In Namibia, firstly, we're the operators of PEL-71 in the Walvis Basin, on which we drilled the Prospect S well in 2018. That well was operated by Chariot, and although commercially unsuccessful was drilled safely and efficiently at around $16 million. From a geological perspective, we've now completed our post-well analysis, and the well found the expected stratigraphy improved thick good quality reservoirs in the primary upper cretaceous turbidite sandstone targets. And we also recorded hydrocarbon indications from both gas peaks once drilling and petroleum inclusions within the cuttings in the post-well analysis. So for us, the reason for failure was attributed to the prospect not accessing an effective charge mechanism. The 3 remaining prospects that show on the slide are ones that can reduce this key risk. Firstly, Prospects V and W are located on the western side of the block, and they access an untested outboard potential source kitchen and they are low-risk structural closures with reservoir proven by the Prospect S well. In Prospect B, which is to the north of Prospect S, that's in a more mature part of the inboard kitchen and the main reservoir is stratigraphically deeper and in closer proximity to the main acting source rock, therefore, reducing the distance of vertical migration. There are third-party wells planned in Namibia. Prospect B has similarities to the Aurora Prospect, which is anticipated to be drilled in the block immediately to the north of PEL-71 and by Maurel & Prom in 2021. And we also note further near-term drilling on the Venus Prospect by Total and impact planned for later this year. And in anticipation of the activity, we do have an active data room, which recently reopened on this license area. On Slide 16, on Brazil. We've also completed our work program and we have a drill-ready portfolio of plastic targets in tertiary and upper Cretaceous reservoir section. Our lead prospect contained stack targets with a total resource potential of just over 900 million barrels. These licenses for concessions are in the Barreirinhas Basin. That's conjugate to Cote D'Ivoire and Ghana. And based upon recent drilling success along the equatorial margin to South America, so in Guyana and Suriname, an anticipation of some upcoming drilling activity, we also have an active data room ongoing on these concessions as well. We note from public EIA submissions for drilling. Petrobras is planning a long-awaited Guajuru prospect in late 2020 or early 2021. And there are also a large number of undrilled commitment wells within the Barreirinhas Basin from other operators. These wells target the same play systems to those on our acreage and would, therefore, provide valuable insights on the potential and value of our acreage in an underexplored and frontier basin. So with that, I'll hand back to Adonis to summarize the presentation.

Thank you, Duncan. Moving on to Slide 17 and in summary. As we said earlier on, we have a new team with new energy. We have a new vision. We have new ventures that we're looking at, at the moment. We have an exploration portfolio in Morocco, Brazil and Namibia. And probably most importantly, we've got the Anchois Gas Project, which as you just heard from Duncan, is a very, very exciting project, and it just keeps getting better. It keeps giving as we look at it more. And we're very excited about it, and it's fast becoming very interesting for many, many parties. This Chariot's flower that we see over here, if we can achieve what we set out to say earlier on, we will create value and deliver positive change through this investment in these projects. And be part of this new energy revolution. And we're very excited about where we believe we can take the company to, and we'll now open up the floor for questions and answers.

Okay. Question in, why did Repsol not identify the leads and upside we're now seeing over Anchois and Lixus, I believe we're using their 3D data sets. Does the company feel any more seismic is required on the block?

Great. Yes. Thank you. Duncan Wallace here. I'll take that question. So the Anchois Gas discovery was made by Repsol in 2009. And it is right to say that we are using 3D seismic that was acquired by Repsol during the tenureship on licenses in the area. But what we were able to do over the last 12 months was to access the original field data from those 3D seismic programs. And by using the field data and reprocessing from first principles, we were able to apply all the latest recent technology in processing, which has moved a long way since that data was processed back in 2010, the majority of that data set. So we've been able to see a lot of benefits in new technology. We've also approached it with a fresh pair of eyes and being able to recognize and some of the same targets that they had seen, but also establish new ones, but also derisk those targets through the new technology, using insights, not just Anchois, but the other 3 wells that were drilled on block. The other thing that I think has changed since in 2009 is also the landscape of the gas market in Morocco. Gas, I don't think was particularly valuable back in 2009, but we can see there's been major developments since then, an established gas market now in Morocco. So I think gas is certainly more favorable as an investment now than it was 10 years or so ago.

In a comparison with other companies in the sector, Chariot have released far fewer RNS updates. How is this going to change in the future as we need these to maintain positive momentum?

Well, we believe that we will engage with our shareholders regularly, and we'll put out RNS when they are necessary. We are not just going to put out news for the sake of putting out news. But I do think that we'll be far more in touch with our shareholders. And the plans that we have afoot are quite aggressive. So I think naturally, we believe there'll be a lot more news flow coming from the organization. But I do want to stress that we are going to put out meaningful news, meaningful announcements and not just for the sake of putting out an announcement. But in the new spirits and the new collaboration with our shareholders, I think shareholders can expect to see a far more forward-leaning Chariot engaging far more proactively with not just shareholders, but with everybody.

Okay. Both Duncan and Julian are now on the Board, both of whom were in senior roles previously. What do you plan to change positively? And how the company moves forward to regain investor and market trust?

Yes, it's Adonis, I think I'll answer that. It's Duncan and Julian, yes, were part of the company before, but they were never an executive positions and they were never on the Board. Now they've been elevated to the Board, and the Board has absolute faith and confidence in them. And they -- the 2 of them have been instrumental in designing the new vision and the new mission of the company going forward. And I think with this new impetus we've got going, the new direction of the company, I really think that Duncan and Julian will add tremendously to the growth of this company. And I want to stress that the Board is fully behind the executive of this company.

The Anchois upgrade is fantastic and surely underlying the quality of the asset. But what investors in the market are crying out for is third-party partnering. In January this year, we were advised by then CEO, that some sort of partnering was hopeful and likely in the short term. It's now September, what has happened regarding partnering, have potential partners walked away.

Okay. So Julian here, I think I'll deal with that point. So as I said during the presentation, we are pleased at how the partnering process is going, and we have new parties who are coming into the data room now. And obviously, this resource upgrade is going to help to encourage even further players into data room. And I understand that the frustration that some -- that the individual has in the question that a format has not been announced. And as I said previously, it's because, partly because of the COVID situation, that the most significant and more fundamentally is that we are not going to take a deal, which does not protect the value for shareholders.

It's Adonis, here. If I could add to what Julian has said on that question. It is not that we cannot partner, and it's not that they're not there. It's about doing the right deal for the Chariot shareholder. And with what you saw yesterday with the announcement, I think everyone can see that this asset is trying to show some real teeth, and we need to do the right deal for Chariot. There's a lot of interest in this asset, but we are going to do it properly.

What are the company's intentions of block retention in Namibia? Are we seeing any partnering interest whatsoever for our high-impact exploration oil assets and what must be an even cheaper environment to actually drill offshore targets?

Yes. So Duncan, here to answer that one. Yes, we drilled on Prospect S, back in 2018. I think we managed to hit real low in the prices, and I think we were able to drill that well at low cost. We drilled that well and it fulfilled our current phase work program right at the very start of the current license period. So we've had time available to us to do our post well evaluation work, which we have done. And we've updated our thoughts on the prospectivity and with revitalized exploration activity happening in Namibia, now is quite an interesting time where others will drill wells, which will help to inform the value of Namibia's basins. So we do have a data room, as I mentioned, that recently reopened to sort of capture the interest from others in the ongoing exploration activity in Namibia.

Okay. Adonis, is it your intention to appoint a new CEO in the near term or to stay on for the foreseeable future?

As we laid out earlier on, we have a new vision, a new strategy, and it is my intention to see and get that strategy and vision on the road. And at the moment, our focus is to deliver on that strategy and I'll stay as long as I think, the need to stay to make sure that the new vision and the new business plan for Chariot is real. At the same time, if my relevance is no longer there to the business, we will bring a CEO on board, who will take the company to the next level. But as one of the largest shareholder in Chariot, our interests are aligned as shareholders. And we need to make sure that we see this new plan through.

What are the company's intentions to secure finance for what must be assumed as some percentage or portion of the CapEx costs required in the next stages?

Okay. So I think kind of going back over to the point that I previously said -- Julian here, sorry, that I previously discussed in the presentation. We are focusing on partnering for Lixus initially. And then we have carried out significant work as far as debt financing the development. As I said previously, I've spoken to a variety of different players within that space.

Okay. Does the company recognize the lack of communications and how that's frustrating the share price?

I think the company certainly does. And as we have shown in the last few weeks, we are prepared to engage with our shareholders in a far more proactive manner. We're prepared to reach out and give as much information as we can to all the shareholders and keep the excitements and the interest in Chariot going forward, and that will continue for the future.

Okay. What are the reasons the company has not entered into a farm-out or other type of agreement for a number of years now?

Well, it's Adonis. I think, I'll start with that. It's -- if you look at it, that's not 100% correct. I mean, we did have E&I joining us in the well in Morocco, and that was drilled just over 2 years ago. And I think it will be fair to say that the last 2 years for the junior side of the oil and gas industry has been quite tough in securing partners for high-impact exploration. Having said that, as Julian said earlier on, there is a lot of interest in Lixus and Anchois. And we could do a deal quickly on that. However, we want to do a deal that's right for all shareholders. And so we'll take our time in doing that. But historically, we've partnered as a company with some of the major oil and gas companies of the world. And there's no reason why we can't do that again.

Why did it take the team such a long time before they decided on a pay cut and even then a conflict of interest situation arose by awarding themselves the balance in shares? And subsequent to that is, do any -- does any director still receive shares as part of their pay in lieu of the 50% cut?

Okay. So it's Julian here. I'll deal with that question. So we benchmark our executive and non-executive pay to our peer group on an annual basis. And our pay is significantly below the market level. The -- in addition, all pay is set independently by the Remuneration Committee. Now the Board took a 50% pay cut, early this year, and this is in addition to previous pay cut that the Board has taken, and that pay cut -- in addition to that pay cut, there were share awards that were given. Now we do need to incentivize and retain management.

I just want to just add to what Julian has just said there, it's Adonis here again, is that the Board has taken at least 2 pay cuts. So it hasn't waited until COVID hit before it took pay cuts.

A question on cash position, how much money is left?

Okay. So Julian here, again. So our last reported cash was $9.6 billion. We have no debt and no commitments across our entire portfolio. We have always acted prudently with our cash, and we will continue to act prudently. And that was shown by the cuts that took place in April this year to reduce our annual cash overhead to $2.5 million.

Thanks, Jules.

Where can we see gas production in Morocco?

Yes. So Duncan Wallace here. So gas production in Morocco, well, we have a timeline that we can follow for the appraisal and development of the Anchois Gas field. And basically, from any final investment decision, we would need around 2 years in the construction phase before then we could see first gas. So if we're able to achieve a timeline, for example, of drilling in 2021, that might unlock FID and then potential for first gas in 2024. So that's the sort of timeframe on which we might anticipate gas coming to market if we are successful in achieving funding and partnering to move the project forward.

I am a private shareholder and have invested considerable amount in Chariot shares. How much of the executive directors invested since they joined the company? And what have they achieved in the past 7 to 8 years?

Adonis here. The Executive Directors and the Board owns circa 10% of the company. I myself have put many millions of dollars into the business and increased shareholding since IPO-ing the business in 2008 and have never disposed of any share, but have added to the number of shares. And Julian and Duncan have just joined the Board as executive, they haven't had an opportunity to increase their shareholding. However, what did we achieve over the last 7 or 8 years, we spoke about that earlier on. We've drilled 4 high-impact wells. Unfortunately, they were dry, and we've now secured a Tcf of gas and minimum of a Tcf of gas in Morocco. That's what's been achieved. And I think that the executive and the Board are fully aligned with the shareholders in that every single board member own shares in the company.

Thank you, Adonis. When will shareholders see potential resources being converted into actual reserves? And what will be the time scale to achieve this and how much finance is required?

Okay. So Duncan Wallace here. So yes, at the moment, we have contingent and prospective resources associated to those -- to the Moroccan gas project to move resources through to reserves, you need to fulfill a number of criteria. For example, you need to have a firm intention to proceed. For example, a final investment decision, gas sales agreements lined up and funding in place. So those are the things that you need before you can then recategorize resources into reserves. So to get to that stage, clearly, we need to move the project forward with appraisal drilling to confirm resources and to perform a well test. That will help to finalize the engineering for the project and unlock project finance, which would be the key items that will be required to move forward.

Thanks, Duncan. Will the Moroccan gas prospects be fast track for appraisal and production subject to economic circumstances?

Again, the resources at Anchois and the associated prospects give actually quite a lot of flexibility to us regarding how we might develop those. There are -- there is the opportunity to fast track a development based around the 1C or the proven contingent resource base that could be done more quickly because those are lower risk resources by definition. And/or an alternative if a future consortium or joint venture wants to go that way would be to derisk additional resources and look for a bigger volume to develop, which may take a little further -- a little more time in reflecting on any appraisal results. So there is flexibility to fast track a smaller development or alternatively, to take a little bit more time and to try to come in with a higher production rate based on a larger resource base. So there is flexibility and a lot will depend upon the right partner and the right deal and the right development that we want to take forward at any time.

Thank you. Where in the sections is the source rock? What are the key trapping mechanisms and why are A and B not full?

Yes. So Duncan here, again. So actually, very interestingly, the source rock at Anchois, it was always assumed in the early stages of exploration that the gas in this area and the offshore RAB Basin would be biogenic in its formation. Much of the gas in the onshore part of the RAB Basin is recognized as being very dry and biogenic. And also on the other side of the margin, the Guadalquivir Basin and the Gulf of Gulf of Cadiz in Spain have long been known as biogenic gas over there. The interesting results from the Anchois well was that it was found to be thermogenic and clearly a thermogenic gas. The analysis of the gas ratios and isotopes shows us that the gas must have come from a deeply buried and very mature source rock. That could either have been an oil mature source rock or a more gas prone source rock, but it has to be buried at significant depth. For example, somewhere between 6 and 8 kilometers burial, we estimate. That's quite interesting because it opens up other exploration plays for us. For example, I described the sub map prospectivity, that could be either for oil or for gas, and that's very interesting for the long term. In terms of the trapping mechanisms at Anchois, we currently have Anchois, it's largely a structural trap. It's controlled by a fault to the East, and it's dip closed towards the North and the south, certainly at the B Sand level. And yes, the question, why they're not full. Well actually, that's an interesting question. And we actually believe they may be actually filled to spill. We've sort of relooked at the trapping mechanism, and it depends upon the sand. But these are quite young structures, and there has been recent movements. So we do think that maybe the traps were more filled. And then over the last couple of million years, with some tectonic changes, there has been a sort of change in the size of the trap and perhaps some of the gas has leaked and has given us some residual gaps on some of the log data. But essentially, as of today, as the traps are described, they are basically filled to spill. I'm excited by the question.

About recent couple of million years.

Any plans for equity fund raise in the near to midterm?

So Chariot is a growing company as we can see. And obviously, we need to look at all opportunities to realize value in Lixus and Anchois. Whatever we decide to do to realize value in the portfolio. First and foremost, in our minds, will it be value-accretive for the shareholder. And so we can never say never. We can never say yes or no, but we would look to grow the business going forward.

Can you give any indication of what you're looking to achieve from a successful Lixus farm-out back cost, appraisal activity funded or some level of development carry?

Julian here. For commercial reasons, we're not going to go into specifics, but overall, we are looking to fund the appraisal drilling. And as both Adonis and myself, and I think Duncan have previously said, we are not going to take any deal, which is not good for shareholders.

What are your expectations for the share price in the next 12 months?

Yes. That's a difficult question. Obviously, we've got a macro market that we're playing into. However, if we can deliver on some of the strategy that we said we were going to do, we expect it to have a very positive impact on the share price.

Chariot, to date, it's been an exploration company. What project management skills do you possess to pursue Lixus?

Yes, we are a small team at the moment, and we've got the right skill set for what the company is doing at the moment. However, as I had mentioned earlier on in the presentation, the broader group has undertaken big projects, multibillion-dollar projects on the continent. We know how to staff up a team and how to get the right skill set into developing an asset. When the time is right, we will bring those skills into Chariot.

You mentioned a debt-based model, but are you considering a free carry option? What's the likely timeframe on making an announcement?

Okay. So our model for Lixus at the moment is to fund the appraisal drilling through partnering and to fund the development through debt. And I think I've already given quite a lot of details within that, about a different debt parties that we are currently speaking to.

Do you have a comprehensive communication strategy in place to restore confidence in the company? The market is only valuing the company based on the cash position, which does not bode well for negotiation.

As part of this new recreation of Chariot, we're looking at our whole marketing strategy, our communication with our shareholders branding and positioning of the company. And as soon as that is ready, we'll release it to the market. And we hope that we do trade above cash value and people see from yesterday's announcement, the real value in Lixus.

Are you actively looking for a takeover or merger of the business?

We are not actively looking for anything. We're actively looking to deliver value to shareholders. We can't preclude that there may be a takeover or a bid for the business. However, it will ultimately be the shareholders who decide whether they want to go ahead with a deal like that or not. If you look at the market cap of Chariot today, we believe it's seriously undervalued when you look at the asset base. And we somehow have to get the share price to represent the reality of what we see as the value of the Lixus asset. It's not -- by long measure, it's not there yet. And we have to build credibility in the market so that people can see what we see in the company and what we see in Lixus.

What's -- I think the final question that we've received. What do you mean when you say the company is looking at other commercial avenues?

When we spoke about the new Chariot going forward and the new world in which we live in, where there's all sorts of new power generation projects, energy projects, renewable energy projects. We're looking at various options as to what can be synergistic to the Lixus project and what plays into this new energy revolution. And we would look at that primarily based on our African experience and what is suitable for Africa. And we're actively looking at playing into that renewable, sustainable energy platform that's out there at the moment that we see everyone speaking about.

Adonis, it's Julian. I just have one other point is that, when we bring new projects in, we are looking to take into account what we think our shareholders want. And one of those attributes is scalable projects like Anchois. So that we can hopefully put a bit of sizzle back into the share price.

Another question in. Can you give an estimate of the cost to fully appraise Anchois?

Yes, Duncan here. So as you will have seen over the last 6 months or so, the impact on oil price, which has lowered significantly. That's also going to have an impact upon drilling rates and services. So that sort of sets the context for the answer. Prior to that, a downgrade in prices, we had appraisal costs that were in the range of $35 million to $45 million. That range comes down to both operational aspects. For example, what is the program? So are we just appraising the known Gas Sands with a well test? Are we also doing some deepening to these new targets or even a sidetrack to the new target? So across the range of possible operations, it's sort of $35 million to $45 million was the estimate pre the recent drop.

Thanks, Duncan. It's Adonis here again. Thank you for all of your questions. I think that's about it at the moment. Thank you for being loyal shareholders and long suffering shareholders as well. And I, as a shareholder, have been here for a long time, I'm not happy with the performance of the share price. We are fully aligned, as I said earlier on, all the Board has shares, and so we're aligned with you. And what Julian said earlier on, I just want to repeat, whatever decision we take for Chariot going forward, we will look at, is it value-accretive for our shareholders or not. Thank you very much. And we look forward to speaking with you soon.