Oil price, Chariot. And finally…
WTI $61.55 +13c, Brent $64.62 +9c, Diff -$3.07 -4c, NG $2.58 +4c, UKNG 45.5p +1.91p
Oil is coming back down, all the reasons cited in the last few days remain but right now it is questions over the AZ vaccine and of course as predicted yesterday Germany going back into lockdown until mid-April.
It’s retail gasoline price day and the growth in the price is slowing. A gallon of Shell will rush you $2.865 up just the 1.2 cents w/w, a decent 23.2c m/m and 74.5c y/y.
Chariot Oil & Gas (AIM:CHAR)
Chariot has announced the acquisition of a renewable and hybrid power developer focused on the mining sector in Africa by targeting a giant untapped market with Strategic Partner Total Eren, a Global Independent Power Producer (“IPP”) from Renewable Energy Sources.
The company has announced that it has signed share purchase agreements for the acquisition of the business of Africa Energy Management Platform (“AEMP”) for consideration of up to $2 million payable primarily in Chariot Ordinary Shares, representing up to c.4% of Chariot’s enlarged share capital.
AEMP is a renewable and hybrid energy project developer, with an ongoing strategic partnership with Total Eren, a leading global player in renewable energy, predominantly in solar and wind. Total S.A., the French multinational energy company, has a shareholding of about 30% (directly and indirectly) in Total Eren. AEMP and Total Eren (the “Partners”) are looking to provide clean, sustainable, and more competitive energy to operational mines in Africa, which represents a giant, largely untapped market in which Chariot’s management has numerous high-level contacts.
AEMP comes with a pipeline of 500MW of African Mining Power Projects and the Partners are in discussions with African mine operators with an aggregate requirement for 500MW of power for whom the Partners could provide viable energy solutions.
Chariot’s management is also looking to leverage its other significant business interests in multiple mining operations across Africa to rapidly grow the pipeline. The African mining power market is estimated to be around the same size as half of the entire UK power market.
Through its Strategic Partnership with Total Eren, AEMP has a right to invest in up to 15% project equity at cost in projects developed by the Partners. This provides ‘multiple value accretive opportunities for re-investment of anticipated material cashflows provided by Chariot’s Transitional Gas Project, the Anchois Development in Morocco’. AEMP currently recovers its overhead costs as part of the partnership providing an immediate post-acquisition revenue stream to finance ongoing costs.
AEMP has an experienced team with a proven track record of delivery, with the first project in operation, the largest hybrid solar plant in Africa, at the Essakane gold mine in Burkina Faso, successfully completed and currently generating returns providing proof of concept.
Under the terms of the deal Chariot will acquire 10% project equity, alongside with Total Eren having 90%, in the operational Essakane power project with positive cashflows pursuant to the SPAs. In addition, the whole of the highly experienced AEMP team are to join Chariot, including founders Benoit Garrivier and Laurent Coche.
Fabienne Demol, Executive Vice-President & Global Head of Business Development at Total Eren, commented:
“Total Eren warmly welcomes Chariot into this strategic partnership. We believe the combination of AEMP’s experienced team with Chariot’s wide reach to the African mining industry will bring further value accretive opportunities to our collaboration. Together, we are determined to address mining companies’ energy needs and provide them with clean and competitive renewable energy solutions, even in remote areas.”
Benoit Garrivier, Co-Founder of AEMP, commented:
“I am very excited about joining the Chariot family. Teaming up with Chariot’s highly experienced management will allow us to take our partnership with Total Eren to the next level. Building on our award-winning Essakane solar project, we look forward to growing our pipeline of projects to transform the energy market for mining. This is a fantastic opportunity to create an innovative transitional energy group focused on Africa and support our clients in their move towards green energy and reduction of their carbon footprint.”
Adonis Pouroulis, Acting CEO of Chariot, commented:
“I am delighted to announce the acquisition of AEMP. We believe this move will provide Chariot with numerous further valuable, exciting and scalable projects that complement and build on our value accretive Transitional Gas project in Morocco. The acquisition also plays to Chariot’s and its managements’ significant experience and other business interests within the mining sector in Africa. We are already well advanced in adding to the project pipeline and we look to forward to announcing these when appropriate. This is clearly a 1+1=3 type transaction for all parties.
We welcome Benoit, Laurent, and their team into the Chariot family, and we thank Total Eren for their strong support of this transaction. The strategic partnership with Total Eren is a highly valuable relationship, that we will look to strengthen and grow over the coming years.
The last nine months has been a busy and transformational period for Chariot under its new management team and over the coming period we will continue to look for other energy transition ventures which will further complement and build upon the high value projects we are currently looking to fast-track.”
Chariot has a number of times suggested that there were a number of game-changing deals on the go and this certainly ticks that particular box. As a move away from the old elephant hunting days, drilling for oil offshore West Africa, this couldnt be more different as it takes on the move to cleaner, greener more sustainable energy. With a rapidly increasing African population, doubling to some 2bn in 25 years, the demand for renewables is expected to grow out of all proportion.
So this deal that gives both companies and countries a chance to deploy in renewables is crucial and with the involvement of Total who add a major perspective and will be a key part of the relationship with the Pella stable in 17 African countries provided by Adonis Pouroulis. It is also suggested that through the JV Chariot will be able to lever off the Total balance sheet giving even more potential.
Of course the Lixus tie-in will provide the already decent size Anchois discovery with a market place, with its de-risked project NPV10 of some $500m + it also ticks the scalability box where a potential 3 TCF are anticipated
There are a number of sundry positives, for investors who rate the above industry average of ESG compliance the acquisition meets Chariot’s key ESG value of Positive Impact on the environment, countries, and communities where it operates. It marks the change towards gas on the continent and obviously with a large number of energy hungry mining projects should have medium and long term opportunities.
Post completion of the acquisition, the enlarged group plans to formally change its name from Chariot Oil & Gas Limited to Chariot Limited under the tagline of “Chariot Transitional Energy”, very much a cleaner, greener and more sustainable company.
The shares have not taken advantage of what is without doubt a game-changing deal, investors should watch the interview with Adonis and see how the various moving parts in this deal will combine to make the current market cap look positively tiny by what it should be. A key member of the bucket list Chariot is set fair with this deal.
England are playing India in the 1st ODI, India scored 317 and England are 217-6 needing 100…