Chariot Highlights 3Q Developments in Namibia, Peru

Chariot Oil & Gas has announced its maiden set of unaudited results for the six months ended August 31, 2008.

Kevin Broger, Chief Executive Officer commented, "Following our successful, oversubscribed listing we have made significant developments. We have substantially increased our prospective resources, furthered our exploration work and expanded our portfolio. With cash on hand and no debt, we remain on course with our strategy and will continue to deliver on our objectives. We remain confident about our future prospects and look forward to reporting on further developments in due course."

NAMIBIA

Through Enigma Oil & Gas Exploration (Pty) Ltd, our wholly-owned subsidiary, we have continued to explore the potential of our ten Namibian blocks (eight offshore and two onshore) and we continue to benefit from the specialist expertise within HRT, which was engaged pre-float as an independent technical consultant.

As announced on October 24, 2008, PSDM reprocessing and mapping on our offshore Namibian blocks discovered a further 17 leads in the northern and southern licenses and we have increased our mean gross prospective resources by over 1.3 billion barrels to 5.24 billion. We now have a total of one prospect and 22 leads. In a number of cases and where individual leads are vertically stackable and potentially drillable with a single well, we can consider them as prospects.

Reprocessing and mapping was completed on the existing 2D seismic database in the northern blocks, leading to the definition and quantification of a series of new structural leads in the Upper and Lower Cretaceous sequences. Reinterpretation of the seismic data has confirmed the presence of four main structural leads in the Tapir Complex (all with a stratigraphic component); Tapir North, Tapir, Tapir South and Tapir Deep - increasing the prospective resources from an initial figure of 675mmbbls, to 1,547mmbbls – a net increase of 872 mmbbls. Three prospects are now present in the north – Tapir North (stackable), Tapir (stackable) and Zamba. Zamba is a well defined structural feature with mean prospective resources of 985 mmbbls.

In the southern blocks, reinterpretation of the Mastodon and Mammoth leads confirmed the presence of 13 new structural leads (again, all with a stratigraphic component) in the Campanian, Santonian and Albian horizons which has led to an increase in prospective resources from an initial figure of 1294 mmbbls, to 1,558 mmbbls - a net increase of 264 mmbbls. Two stackable prospects are now evident in these license areas.

The Group also completed an aeromagnetic acquisition program of 31,115km over the onshore blocks in July and a geochemical sampling program is to commence in due course.

Ongoing Work Program

Following the period end, we completed the offshore Namibia seismic tendering process and appointed Seabird Geophysical AS and Wavefield Inseis ASA as external seismic data providers. Seabird began its 2D survey last month and, subject to weather patterns, is expected to take approximately one and a half months to acquire the full 3,000km of data over blocks 2312A/B and 2412A/B.

Wavefield begins its two 3D surveys this month. Subject to weather patterns, it is expected to take approximately seven weeks to complete a 1,500km2 program in blocks 1811A and B, and approximately 14 weeks to complete a 3,000km2 program in blocks 2714A and B.

Discussions with a potential farm-out partner are continuing and we will provide an update on this as and when applicable. We have also opened a dataroom to consider farm-out opportunities for additional interests in our Namibian offshore blocks.

PERU

As announced on September 11, 2008, Enigma secured exploration rights for three onshore blocks in northern Peru - two in the Maranon basin and one in the Huallaga basin. The blocks were successfully bid for in partnership with Jindal Steel and Power Limited ("JSPL"), a subsidiary of the Indian steel conglomerate Jindal Organization. This has served to diversify our portfolio both geographically and by securing a position within a proven petroleum basin -- the Maranon basin already produces 38,700 barrels of oil per day.

Enigma has a 50% interest in block 159 and a 20% interest in block 147, both in the Maranon basin, and a 20% interest in block 153 in the Huallaga. Due to its technical qualifications and expertise, Enigma is the designated operator. Prior to submitting a bid proposal, the blocks of interest were appraised by HRT. Two of the three blocks present a unique opportunity where HRT‟s proprietary biomarker and diamondoid analysis can be applied to look for deeper source rocks and reservoirs. It should be noted that the Peruvian basins have to date been predominantly explored with shallow well testing.

As part of the bid process, Enigma and JSPL submitted a proposed work program that requires the reprocessing of existing 2D seismic data and the performance of a combination of 2D seismic acquisition, gravity and magnetic data acquisition and wells.

Financial Results

As an exploration company, Chariot currently has no revenues. The company incurred an operating loss of $6.3 million for the six months to August 31, 2008, of which $1.8 million related to ongoing overhead costs. Other items expensed under operating costs included costs of the admission to AIM of $1.8 million, and non-cash, fair value adjustments relating to employee share options of $2.6 million.

The exchange loss of $5.9 million was realized on translation of Sterling balances, following recent falls in the exchange value of Sterling versus the US Dollar. The company intends to implement a hedging policy to protect against further exchange rate fluctuations.

Expenditure on capitalized exploration costs for the six months totaled $4.5 million. The only other significant cash outflow related to the repayment of shareholder loans of $3.1 million.

The oversubscribed AIM flotation in May 2008 resulted in the issue of 41.2 million new shares, raising $88.8 million of funds, with issue costs of $9.5m. The company is debt free and held cash balances of $71.3 million at August 31, 2008.

Outlook

Following our successful, oversubscribed listing we have made significant developments. We have substantially increased our prospective resources, furthered our exploration work and enhanced our portfolio. With cash on hand and no debt, we remain on course with our strategy and will continue to deliver on our objectives. We remain confident about our future prospects and look forward to reporting on further developments in due course.
 

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