UK-based Chariot Oil & Gas has chosen not to enter into the first renewal exploration period of the exploration licenses covering Namibian offshore Blocks 2714A and 2714B.
The company said on Tuesday that the Namibian Ministry of Mines and Energy, as well as Chariot’s partners, had been notified of this decision and the process of withdrawal is now underway.
On behalf of the partnership, Chariot acquired approximately 2,128 kilometers of 2D seismic data, prefunded the ION NamibiaSPAN long offset 2D seismic data, and reprocessed the historic 3D seismic data over the Southern Blocks.
Analysis of the integration of this seismic data with regional well data identified gas prospects AO1 and AO2 in the Aptian clastic onlap play.
Chariot added that the work on defining this prospect resulted in industry interest. However, the technical risk associated with these prospects deterred potential partners from committing to a program of exploration drilling in the current environment.
The decision not to enter into the next period was made in line with the company’s risk management strategy, its focus on portfolio management, and capital discipline.
In exchange for facilitating the partnering program to be undertaken by NAMCOR, Chariot secured an option for the company to back-in for ten percent ground floor equity from the remaining partners.
This option can be exercised at Chariot’s discretion for no consideration following the drilling of the first exploration well in each of the licenses. The heads of terms of the option have been agreed, and the final contract remains subject to approval by both the remaining partners and Chariot.
Larry Bottomley , Chariot CEO, said: “While it is disappointing that we were unable to attract a partner on the southern blocks in the current environment, it is important that the company maintain discipline in the management of risk and the allocation of capital.
“NAMCOR has requested that Chariot remain engaged in the partnering process through a zero cost option to back-in after exploration drilling in recognition of the depth of understanding of the Chariot team of these licenses and the quality of technical work performed.
“Our operational focus is on preparing for the drilling program in Morocco, progressing preparations to drill in the central blocks in Namibia and launching the partnering process in Brazil.”