Chariot Oil & Gas Limited, the Atlantic margins focused oil and gas company, today announces its audited final results for the year ended 31 December 2018.

2018 and Post Period Highlights

New Venture, Lixus licence, containing Anchois-1 discovery, secured in Morocco

• Anchois-1 well gas discovery - 307 Bcf of 2C contingent resources offering near-term development opportunity
• Deeper potential not penetrated by the Anchois-1 well of 116 Bcf 2U prospective resource has also been identified
• Material tie-back opportunities from low risk, exploration prospects offer an attractive upside of 527 Bcf of 2U prospective resources in satellite prospects adjacent to the Anchois discovery
• Additional on-block exploration running room in licence
• World-class commercial contract terms with high gas prices in a developing market with growing energy demand offers a potentially high-value project
• Minimal initial licence commitment funded from current cash
• Future development anticipated to deliver strong returns and significant cash flow

Operational Flexibility achieved through Capital Discipline:

• Debt free with a cash balance of US$19.8 million as at 31 December 2018
• Fully funded for current work commitments - less than US$1.0 million
• Annual cash overhead remains below US$5.0 million
• Strong cash position enhanced by Q1 2018 placing and open offer of net US$16.5 million providing funds to allow the Company to deliver Prospect S at the bottom of the cost cycle

Delivery of Drilling Programme at Optimum Point of Cost Cycle:

• Achieved Zero Cost Drilling: Rabat Deep 1, Morocco - Dry: Successful partnering meant drilling was achieved at zero cost to Chariot. Information from the well provides valuable insight into the prospectivity of the Company's remaining licences and the newly awarded Lixus licence
• Demonstrated Chariot's Operational Capability: Prospect S, Namibia - Dry: The well is anticipated to be the lowest cost deepwater well of 2018, with a gross cost of c. US$16 million, significantly under budget and operated with no incidents. Analysis of results ongoing

De-Risking of the Broader Portfolio:

Rabat Deep 1 well analysis, Morocco:

• Primary Jurassic carbonate was tight with oil shows
• Geochemical analysis indicates a hydrocarbon charge from Cretaceous or younger source rock, with the Cretaceous known as a world class source rock - this has led to a new prospect inventory in Mohammedia and Kenitra, and the acquisition of the Lixus licence 
• Excellent quality upper Jurassic sandstone reservoirs and effective seal significantly de-risk the Clastic prospects and leads in Mohammedia and Kenitra with prospect MOH-B (gross mean prospective resource of 637mmbbls) and KEN-A (gross mean prospective resource of 445mmbbls) priority targets

Prospect S drilling, Namibia:

• Cretaceous targets were water bearing. Results expected to degrade the risk profile of prospects T, U and D, but that of V and W remain unaffected
• Calibration of well results with proprietary 2D and 3D data as well as information from nearby wells ongoing

Drill-Ready Prospect Inventory, Brazil:

• Integrated seismic interpretation and CPR completed with a large four-way dip-closed structure identified and a portfolio consisting of seven reservoir targets individually ranging up to 366mmbbls of gross mean prospective resource
• A single vertical well located at Prospect 1 can penetrate the TP-1, TP-3 and KP-3 stacked targets which have a summed on-licence gross mean prospective resource of 911mmbbls 

Governance:

• Board strengthened with the appointment of Chris Zeal (Q3 2018) as Independent Non-Executive Director. Chris' depth of knowledge in corporate finance is anticipated to provide valuable contributions to the decision making and strategic planning process

2019 Strategic Focus:

• Develop gas market opportunities and identify strategic alliances for Lixus appraisal programme
• Continue partnering processes in Brazil and Morocco to progress drilling of giant prospects in exploration assets
• Apply technical expertise to calibrate well results with regional knowledge and proprietary 2D and 3D data across the Namibian and Moroccan assets 
• Maintain Capital Discipline in all areas of business
• Remain vigilant of additional value accretive new venture opportunities that will continue to balance the risk profile of the Company

Larry Bottomley, Chief Executive Officer of Chariot, commented:
"Chariot has had an exciting start to 2019 with the recent award of the Lixus licence offshore Morocco. The addition of discovered resources rebalances the portfolio providing a near-term development opportunity, low risk exploration upside and ultimately a sustainable footing to continue to pursue our high impact exploration portfolio. We will be looking to source strategic partners to develop the Anchois-1 gas discovery. 

Chariot's 2018 drilling programme, whilst disappointing in not delivering a giant discovery, did demonstrate Chariot's ability to attract quality industry partners and enhance its reputation for operational efficiency, safety and effectiveness. These wells take the Company another step further in maturing and de-risking the areas in which it operates at no to low cost. 

We remain committed to progressing our high impact exploration programme. The analysis of the Namibian drilling results is ongoing and we are excited by the implications of the Rabat Deep 1 well in Morocco, which has led to a new portfolio of prospects charged by world class source rock and de-risked the Clastic priority prospects MOH-B and Ken-A in Mohammedia and Kenitra. This, alongside our independently audited Brazilian prospect inventory will be the focus of our partnering process in the year ahead.

The shift in balance of risk and reward with the addition of the Lixus licence fulfils the Company's goal of seeking an opportunity to generate cash flow. We now have a diversified inventory of giant, high margin, high risk prospects complemented by a high value, low risk, low cost gas appraisal project in an emerging gas market supported by a growing energy demand. With our exceptional team, supported by an enhanced board and strong balance sheet, we believe that the year ahead offers exciting opportunity for progressing all areas of the Company's portfolio."