Africa-focused Chariot Oil & Gas is raising $48.7 million to both boost its working capital position and to help provide funding for drilling through to the base of a deeper identified target at the firm's Tapir South exploration well offshore Namibia.
Reporting Tuesday its results for the 10 months to Dec. 31, 2011, Chariot said that the Maersk Deliverer (UDW semisub) rig has been mobilized and is en route to Namibia. On March 16, 2012, the rig left the port of Takoradi in Ghana for the Tapir South location, with drilling set to begin in early April.
Chariot CEO Paul Welch described the fund raising as a prudent move given increasing costs in the oil industry and current financial markets.
"We have taken advantage of an opportunity to introduce a major, long-term investor to the register," said Welch.
"With cash in hand at the year end of $129 million and cost obligations carried on the Kabeljou-1 exploration well, Chariot is fully funded for its immediate work program. Proceeds from this placing, therefore, will be used to give us greater headroom for contingencies, allow us to drill an additional deeper target and enable us to fund additional follow up activities."
Oil analysts at independent London-based broker FoxDavies Capital highlighted that Chariot's unrisked prospective resource potential has been increased from 13.9 billion barrels to 20 billion barrels, as well as recent farm out agreements signed with BP and Petroleum Geo-Services.
In a research note, FoxDavies said: "[Chariot] is embarking on an extensive drilling program as the company matures its assets through the development cycle. The coming year will be a transformational year, with the drilling either proving concept or underlying future prospectivity."
Chariot reported a loss before tax of $9.2 million for the 10 months to Dec. 31 2011 compared with a loss of $7.3 million for the year to Feb. 28 2011.
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