Chariot Oil & Gas completes farm-out agreement with Eni

Atlantic margins-focused oil and gas exploration company Chariot Oil & Gas reported on Monday that the farm-out signed between its wholly owned subsidiary, Chariot Oil & Gas Investments Morocco, and a wholly owned subsidiary of Eni, has now been approved for the Rabat Deep Offshore permits I-VI by the Moroccan authorities.

The AIM-traded firm confirmed that as a result of the approval, operatorship of these permits has been transferred to Eni.

It said the licence ownership now consisted of operator Eni with 40% equity interest, Woodside with 25%, Chariot with 10%, and Office National des Hydrocarbures et des Mines with 25% carried interest.

Eni acquired operatorship and a 40% equity interest from Chariot in return for a capped carry on drilling the JP-1 prospect as well as a carry on other geological and administrative costs relating to Rabat Deep and a recovery of Chariot's investment to date.

The JP-1 prospect, which will be targeted by the RD-1 well, is a large, four-way dip closed structure of approximately 200 square kilometre areal extent, with jurassic carbonate primary reservoir objectives and an independently audited gross mean prospective resource estimate of 768 mmbbls.

“We are pleased to have satisfied all conditions precedent and welcome Eni as the operator of the Rabat Deep acreage,” said CEO Larry Bottomley.

“We anticipate that further to completing the Environmental Impact Assessment, finalising well planning and securing a rig, drilling will now occur in early 2018.”

Bottomley said the agreement demonstrated Chariot's ability to deliver on its strategy of securing third-party validation through partnering.

“Retaining a 10% equity interest in this well has the potential to create transformational value in the success case due to the large scale prospective resources, excellent contract commercial terms and robust economics.

“Success will also materially de-risk other targets we have identified within our neighbouring Mohammedia permits in which we hold a 75% interest.”