WTI $73.30 +22c, Brent $75.56 +37c, Diff -$2.26 +15c, NG $3.42 +9c, UKNG 78.8p +2.05p

Oil price

Oil will likely finish the week a couple of bucks better, it is flat today but the week has seen yet more favourable economic data particularly US unemployment and manufacturing information.

Worth also noting as before this week that natural gas continues to rise, check out companies that will take advantage of this on both sides of the pond.

Chariot 

It has been a year of change for Chariot Ltd under the strapline Chariot Transitional Energy, with a focus on Africa through the twin business streams of Transitional Gas and Transitional Power. Transitional Gas holds the Moroccan licences Lixus Offshore, containing the Anchois gas development, and the soon to be formally awarded Rissana Offshore, with operatorship and 75% working interest.

Transitional Power, a second business stream, launched in Q1 2021 with the acquisition of African Energy Management Platform (“AEMP”). The recently completed acquisition, initially looks to transform the energy market for mining operations in Africa, providing a giant largely untapped market with cleaner, sustainable, and more reliable power. The key here is the company’s strategic partnership with Total Eren with a global renewable IPP to develop low-risk mining power projects across the continent of significant scale, some 500 MW are in the pipeline.

All this has been funded by raising some $23m from shareholders including CEO Adonis Pouroulis since the year end when the cash position was $3.7 million, no debt, with no remaining work commitments. In addition, restructuring in April 2020 reduced annual cash overheads from US$4.5 million to US$2.5 million.

The company thus describes it position going forward as thus, to secure rig in low cost environment, drill appraisal well on Anchois to confirm resource base and test deeper prospects. Develop strategic partnering on Lixus to share in risks and rewards of high value, low risk gas development project with strong ESG credentials in a fast-growing emerging economy with a clear route to early monetisation. Finally on Lixus, Chariot will progress near-field Anchois tie-back prospects and Rissana area surrounding the licence.

The integration of the Transitional Power business, investment in next project in partnership with Total Eren and development of 500MW pipeline with expected conveyor belt of projects and to evaluate further value-accretive new ventures in energy transition according to the Company’s value.

Adonis Pouroulis, Acting Chief Executive Officer of Chariot, commented:
“We are now entering an exciting and important phase in the growth of the Company. The recently completed fundraising will give us the capital required to turbocharge our growth ambitions and capitalise on the high value opportunities we see in front of us in both our transitional gas and transitional power businesses.

At Anchois, we intend to further progress the commerciality of the licence by drilling an appraisal well. We firmly believe that Anchois ticks a number of boxes when it comes to key investment criteria, such as low project risk, robust potential returns and strong ESG credentials. The focus on transitional energy can be seen clearly at Anchois, where Chariot has the potential to provide the Kingdom of Morocco with a domestic source natural gas to power and industry, enabling the country to achieve its target of decarbonising its economy and reducing its dependence on imported fuels. We look forward to commencing with the drilling of a safe, efficient and cost-effective appraisal well as fast as practically possible.

The launch of Chariot Transitional Power places the Company in a unique position in the market. This acquisition will see us work with our partner, Total Eren, one of the world’s largest players in the renewable energy space, to provide clean, sustainable, and more competitive energy to operational mines in Africa. A market of significant scale, that is largely untapped, where Chariot’s management has a deep understanding and high-level commercial networks. As the AEMP team integrates into Chariot, we look forward to investment into the next project with Total Eren and further progress to the strong pipeline of projects in excess of 500MW.

The Board are firmly aligned with shareholders and the Directors of Chariot have subscribed for a material amount of the recent Fundraise. This reinforces not only the Board’s belief in the Chariot story, but also its commitment to ensuring that Chariot achieves the growth targets it sets out.”

The acting CEO sums it up well, these moves will transform Chariot and in gas and the size of the potential with Total Eren seems to be an opportunity rarely offered to shareholders in a company such as Chariot. It has vision and with both sides of the business attracting the benefits of energy transition and the inevitably positive use of gas. I would think that the upside for the company is potentially so substantial that it would dwarf the size of the company as it is right now. 

Scirocco Energy

Scirocco has announced that it has amended the terms of its investment facility with Prolific Basins LLC.

Initial details of the Investment Facility were announced to the market on 29 June 2020. To date, the Subscriber has invested a total of $1,000,000 in Scirocco pursuant to the Investment Facility. Of this $1,000,000 invested to date, an aggregate $925,000 has been settled through the issue of new ordinary shares in Scirocco, as previously announced.

As a result of the amendment, Scirocco’s access to the further investment of up to $1,000,000 (to be provided at the option of the Subscriber) has been extended until 31 December 2021. Such further investment (if any) will be provided on the date designated by Prolific to the Company and will be invested in a single tranche of either US$500,000 or US$1,000,000 at the discretion of Prolific.

The Investment Facility also provides that the Subscriber may invest a further additional US$3,000,000, with the consent of the Company only, provided that the aggregate amount invested under the Investment Facility cannot exceed US$5,000,000. All other terms of the Investment Facility remain the same and are as described in the Company’s 29 June 2020 announcement.

Tom Reynolds, CEO, commented:
“This is a positive result for the Company, as it extends the Company’s access to the Investment Facility until the end of the year and shows continuing support for Scirocco.”

I think that Scirocco is on the move with its strategy of moving forward in the European transition energy market. That it is now starting to do deals and use its funding is encouraging for shareholders and I suspect that we have a more balanced newsflow in the pipeline.

Diversified Energy Company

DEC has  announced that Teresa Odom, the Company’s current Vice President of Investor Relations, has accepted a newly-created role as Vice President of ESG & Sustainability demonstrating Diversified’s commitment to these initiatives. The Company created this leadership role to further accelerate and communicate its progress in this increasingly important and rapidly changing area.

As stakeholders seek additional information regarding its ESG initiatives and progress, Diversified is investing significant time and resources as evidenced within its updated 2020 Sustainability Report published in April, and the Company will continue to report on its progress within its periodic operations and financial reports.

Rusty Hutson Jr, CEO at Diversified Energy commented: 
“Teresa is no stranger to ESG having effectively served in a dual IR/ESG role since she joined the Diversified family. She has been at the heart of the development of our ESG communications during that time, and we are now delighted to announce this new appointment in which she will now help lead our efforts at a time when ESG is becoming even more crucial to our operations.”

I comment on this announcement from DEC as I have with other companies recently, that the power of ESG becomes more important to companies every day and with DEC appointing the highly experienced Teresa Odom into this role proves that before long all companies will have such structure in ESG.

KeyFacts Energy Industry Directory: Malcy's Blog