Chariot (LSE:CHAR) — Investor Presentation

0:01 Good morning, ladies and gentlemen, and welcome to the CHARIOT Limited Investor Presentation. Type in your questions at any time and press send. The company may not be in a position to answer every question they received during today's meeting. However, the company can review all questions submitted today, we'll publish those responses where it's appropriate to do so. We'll shortly submit a poll to you. And I'd now like to hand over to the management team from CHARIOT. And and, Dennis, good morning, sir.

0:33 Good morning. Thank you, Mark. Good morning. Good morning all, and welcome to this CHARIOT update presentation. So just to remind everybody, whatever we do in CHARIOT from a business point of view, we like to get involved in businesses that are materially scalable. So so everything we do, whether it's in the hydrocarbon space, the renewable energy, we look at the scalability of that project. So just joining me today, I'm joined by

1:04 Duncan and and Julian. My name is Jonas Prudas. If there are anybody on the call who doesn't know who we are, I'm one of the founders of CHARIOT and the CEO of CHARIOT. Yep. So Julian Morris Williams, chief financial officer at CHARIOT, experienced in financing large energy projects in in Africa from inception through to production.

1:27 Yeah. I'm Duncan Wallace, a technical director of CHARIOT. I'm a geologist with over twenty years of experience in exploration, development, and production projects. I've been with the company for just over ten years and leading our, projects in the in the hydrocarbon sector, particularly in our projects in Morocco over the last four years, which have been a key focus for the group.

1:51 Thank you. Alright. Just to remind everybody, a snapshot of of what our business is about. We've got three pillars to the business, three verticals. We've got the hydrocarbon sector dominated by the gas side of the business. In Morocco, we've got transitional power or renewables business, and we've got the green hydrogen business as well. Just to quickly summarize what we're doing in each of those pillars, each of those verticals. So our gas business is really the focus is in Morocco where we've got a package of licenses. We've got two licenses offshore, and we've got a license onshore. The two licenses offshore are Lixus and Rosana, and we're in partnership with Energien over here. And, of course, the big news there is this is a high impact well that we're gonna drill in the middle of August. It's a very important well.

2:42 We carried up to $85,000,000 on that well. The purpose of the well is not so much as to are we gonna find gas or not find gas. We've already found gas through previous two wells that were drilled. It's more a question of how can we scale the project. What will the development look like? How large will will the development be? And so that's a multipurpose well. It's got really several objectives. One is it's got an exploration objective whereby we'll be drilling deeper into what we see as gases gas sands further down that we never intercepted in our last well and neither did Redsol intercept in 2009 because they stopped short and so did we. The second part and objective of that well is an appraisal well. The third part is a flow test, and the fourth part of that well is to leave it in a state that it can be a future producer well.

3:37 So it's a big catalyst for us, and the the the rig is currently in the Canary Islands, and it will set sail in August to be on-site for spud, as I said, August. On the onshore side, we've got the Lukos concession. And over there, we successfully drilled two wells in May, June. We're looking forward to doing a flow test well on our discovery well, the OVA one well. That'll happen, as I say, in September. And from that, we can determine what a possible development can look like, and and Duncan will take you through that in more detail in a moment. Of course, one of the reasons we undertook this fundraise is there's an an opportunity, a new multibillion barrel opportunity that we're looking at. It's actually not really new for for CHARIOT because it's in Namibia, and the origins and history of CHARIOT start in Namibia. It's in our DNA.

4:33 And, again, Duncan will speak a little bit about that later on. On the power side of the business, we've made incredible progress over here where we're looking at, you know, funding this business on a subsidiary level. We undertook a strategic review. We've had incredible interest from within South Africa to fund what we're doing, and the nexus and the focus of this business has moved towards Southern Africa. It's a very valuable business, and it's on our electricity trading license really has been a catalyst that's allowed us to actually draw more generation and more clients. And this business has grown a lot quicker than any of us could have thought of. I think the important thing is is that the business is gonna be funded on a subsidiary level, and Julian will speak about that a little later on. At the same time, on our green hydrogen business, we've got our flagship project in Mauritania with Total Energies. We're a fifty fifty partner there.

5:32 We've completed the feasibility study. That feasibility study showed that it's one of a tier one green hydrogen project, not only from an African context, but worldwide. Last night, the Mauritanian government published the hydrogen code, which is excellent news, so we can go forth now and sign our final conventions with them. On a smaller scale, we will be delivering a one megawatt electrolyzer unit into our project in Morocco. Remember, we we signed a collaboration agreement with u m six p to put a one megawatt PEM electrolyzer at OCP's facilities in CHARIOT LASFA. That'll be installed, and we hope to have green hydrogen production, albeit on a pilot scale, from a one megawatt unit before year end.

6:19 So there's a lot that's been achieved, a lot going on in the three pillars, and a lot of triggers before year end. Moving on, I think let's just start on the right side of the slide here. As I said when I started an introduction, everything we do is scalable. If you look at our gas side of the business in Morocco, you know, we speak about the Anjua development and then up to, you know, 150,000,000 cubic feet a day production. That's great. But what we mustn't lose sight of is that on the actual Litzus concession area, we've got to four and a half TCF potential. So it's scalable. New ventures, multibillion barrel opportunity, it's scalable. I've spoken to you a little bit about the power and the hydrogen. On the power side, that as I said, that electricity trading license of ours, Tana, it just allows us to not only trade our own renewable energy generation, but third parties. And in South Africa, that's a that has incredible power uncertainty and is moving towards green renewable energy, it's very, very scalable. And our our license is an enabler. Our trading license enables us to trade a lot of electricity through that.

7:30 I don't need to say much more on the hydrogen front. A 10 gigawatt electrolyzer project in Mauritania is imminently scalable. But let's look at the left hand side of this slide. You know, thus far and through the two wells that have been drilled, we know that we have a two c resource of 637,000,000,000 cubic feet. There's upside, and this third well we're gonna drill, the onshore east well, hopefully shows that upside. And if we were to scale it up to a 150,000,000 cubic feet a day, just to remind everyone, our base case and what we put forward was a 105,000,000 cubic feet a day. But if we were to scale up to one fifty, you can see what top what it means. And it assumes that CHARIOT only has a 20% interest in the Lixus concession area.

8:15 You can see over here what the cash flows are to us. Whilst we're paying down our debt and even while we're down our debt, we still get in excess of $50,000,000 of free cash back to CHARIOT from that 20% stake in the onshore gas development. The minute we've paid back our debt, we get over a $100,000,000 of free cash from a 20% stake in the onshore gas development. So it's it's actually it's a meaningful project. It's significant cash flows back to us and back to shareholders.

8:53 So we're gonna dive a little bit well, before we dive into, let's just tell you what we did. The next thanks, Jimmy. So we've achieved a lot, okay, in the last year. Just some of the stuff we've achieved on the gas front. We drilled two onshore wells that were successful. One, unfortunately, was not economic. The other one was a discovery. We will do a flow test on that to see what we can do going forward on that. We've partnered with Energy, and and we signed a a rig contract. So there's a lot of sort of triggers to happen before year end. But over and above that, when you look at what we've done on the other two pillars as well, you know, you're gonna have some news on how we're gonna fund the renewables and on the hydrogen on the subsidiary level. We're gonna have a flow test from our offshore coming up, multibillion barrel new venture.

9:43 And, of course, yeah, you know, we've got the onshore flow test coming up too. So between now and year end, there's a lot of triggers, a lot of news flow to come up. We've just recently raised a net of $6,000,000. On the bottom of the slide, you can see where that money is being applied to. $2,000,000 is general balance sheet and trying to finalize what we're doing on the renewables and on the green hydrogen and the funding on the subsidiary levels. We've got $2,000,000 for new ventures, primarily this new venture we'll speak about now. And $2,000,000 is to further Karen, I work not only the the flow test on OVA1, but the relationship and the partnership we've got with EVO Energy to further sort of commercialize the onshore potential.

10:33 Then we'll dive in a little bit more detail now on on the three pillars. I'll hand over to Duncan just to talk about the gas side of the business. Great. Thank you, Dennis. So, yeah, focusing on on this slide and and as a reminder to everybody about our Moroccan portfolio, essentially splits into two areas. The the offshore is the Lixus offshore license that contains the Antoine gas discovery and the development project, and then the Rasana offshore license that surrounds that. And those two licenses, we are in partnership with, Energian. And, really, the the key change on those licenses was the delivery of, the upgrade in gas resources, that CHARIOT delivered through the work that we've done since since taking the Lixus offshore license back in, 2019.

11:24 That delivered a five times increase in the estimated discovered gas resources, 637 Bcf of 2C resource and including the low risk exploration upsides that we will evaluate through the Antoine East well, about 1.4 TCF in total recoverable resource. And so really that is the the key thing that we're doing in the coming months on the the gas business is the drilling and testing of the Anshoomar East well with the objective to take the project towards FID on an expanded development. As a reminder where that gas is going to go, the gas will come onshore to a CPF. Then from there, you will see on the map, a small red tie pipeline that goes into the GME pipeline.

12:10 That is a major trunk gas pipeline that is existing already and connects power generation facilities in country to CCGT power plants, connects them up into, the European system in Spain. And currently, those power plants are running on import gas around a 100,000,000 cubic feet a day of imports. So that is the the key first market that we will look to deliver gas into through the Anschwa development is the domestic power market. Over and above that, any surplus gas beyond domestic requirements, we can then sell into the European network using that same pipeline that's currently being used to import gas. We can actually send gas the other way, into Europe, which then gives us access obviously to a very, very large market, but one also which carries lots of upsides through, volatility as well. So really, we're perfectly positioned to material and attractive, gas markets that can carry a premium over European price.

13:13 The key thing also to mention is and and I think this has become, you know, obvious through, you know, statements from the two companies is how important the Anschwa development is and how aligned the companies are on progressing the Anschwa development in terms of, you know, getting the development underway on with the highest value we can do. That means potential expansion and upgrading of the resources, returning free cash flows to shareholders, and also then looking to grow the project organically through those cash flows. So I think, you know, CHARIOT and ENERGY are are very focused, and aligned together on the, potential of the Anshua field. I'll talk a little bit more around the details of the upcoming well in the next couple of slides. In the onshore, CHARIOT is partnered with the state company ONIM in terms of the upstream, 75% CHARIOT, 25% ONIM, And we've recently completed our first drilling campaign in May that was completed safely on time and on on project budget with one gas discovery at OBA 1, which I will describe to you a little bit later with a planned flow test later in in q three this year.

14:26 The market for the onshore gas is different. We're looking to to commercialize that gas more quickly, and we're focused on the industrial gas market initially in Kenitra, which is undersupplied, and we've seen, you know, increase in local gas prices. So there's an opportunity there to commercialize high value gas rapidly, and and the key to deliver, you know, rapid gas delivery is using a flexible development solution such as virtual pipelines. That's where the relationship with Vivo comes in. So we have a a midstream partnership we're putting together with Vivo, and, yeah, that was a recent announcement, and I'll I'll provide some more details on that in the next couple of slides. So on slide eight, starting with, you know, Anshua East. You know, this is the, you know, the really big news that is is coming up. As a reminder, there are already two wells on the Anshua field. Anshua 1 drilled by Repsol in 2009, found gas, which is shown by the red colored sands, in the a and the b sands.

15:31 We then drilled Anschwa 2 in December 2021 through to January 2022, reconfirmed, those discoveries, but also found additional gas sands in the lower b sand, the c sand, the m sand, and then at TD, a very well developed sand called the o sand where we had some gas pays sitting on top of a thick interval which had, water, at the base of the well. But that's important for the additional prospectivity that we see deep in the Anshua Field. So the Anshua East well, the well that's coming up, you can see that on the right hand side. What you can also see is that it's within, the main fault block of the field. So ultimately, the Anshua East Well is at the location of of where the third important producer well is in the field development plan for the field. So inherently, it's a low risk well, and a major component of the Antoine East well is to put in the ground a key future producer well for the field. So inherently, it's low risk. So why are we drilling that well early? Why are we doing it ahead of FID?

16:38 I think reason number one is it means that we can penetrate all of those producer sands early. We can perform a flow test so we can optimize the development and derisk the development further ahead of taking FID. The second key reason are the inherent upsides that we can drill for very low additional cost at the same time. Those could make a material difference in terms of the scale of the development and then the value that that subsequent development can bring with increased, gas production rates. So in terms of the sequence of drilling, we're fully carried for the anticipated cost of the campaign as Adonis describes, and we will be using the Stena Forth drillship as recently announced. The total duration of the operations including drilling and testing will take in the order of two months, we expect, and the sequence is that the pilot hole will be drilled first. That is shown by that blue line going to the right or to the east. That pilot hole at point one will reintersect the B Sands, which is, you know, one of the key sands for the development of the field. So we'll get further reservoir data there. We will then cross the fault, which is shown by that curved black line, and we'll go into the footwall structure.

17:55 So these are additional potential resources that aren't in the 637 BCF of discovered gas. The structure we will drill is called the footwall. So that's the Anshua footwall prospect, and that's independently audited at a 170 BCF of p 50 or best estimate resources and carries a chance of success greater than 60%. So, really, it's kind of an appraisal level of risk rather than an expiration level of risk. That's how how we view it. It also sits adjacent to proven gas on the other side of the fault. So, inherently, it's it's a low risk target, but it it brings quite a lot of additional potential value. After drilling the pilot hole and logging that to get all of the reservoir data we need, we'll plug back and then drill the main borehole inside the main fault block. At point three, we go through those red sands. So those are the existing discovered sands. We will drill and evaluate those because those will be key sands for the, an eventual Antoine East producer well, and we'll deepen into point four. That is the north flank prospect.

19:02 Again, like the footwall, this is largely an o sand target. That o sand was proven to be good quality reservoir at the base of Anschwa 2. The north flank trap is a fault supported trap with over 200 BCF of resource potential. Again, it's relatively low risk for for an exploration target. Then following that, we will then prepare the well for flow testing, and we will look to get empirical productivity information of key reservoir sands that helps us to plan, you know, the subsequent completion for the well in, an eventual development. There is also a key read through from Antoine East, the footwall and north flank prospects being o sand reservoirs.

19:49 If they come in, if they're successful, there is a direct read through to the south flank prospect that you can see on the left hand side that is beneath the TD of the Anshua 1 well. That carries a further 372 BCF of estimated resource potential. So, you know, that will be materially derisked by success at the Anshua East well. So the overall objective of the well, as I mentioned, is to deliver the development of Anshua, but also look to deliver an expansion of that development. And on slide nine, this shows you the the value increment of an expanded development. The top left, shows you the development scheme. This is a subsea to shore gas development, which is typical for a gas development in water depths like this, approximately 400 meters.

20:35 So three initial producer wells, with a subsea tieback to a flow line and a central process facility onshore That then feeds the gas into the GME pipeline and off to the markets that we've previously described. Now Anshua East, as I say, has 600 Anshua Field has 637 of 2C resources currently. With Anshua East, If both of those two new prospects are successful, that could take us to a development of one TCF. That would allow us to expand the project to a 150,000,000 cubic feet a day or even higher.

21:10 What is the impact upon value? Well, actually, in terms of the initial development CapEx, it's minimal, less than 5% incremental in terms of that initial CapEx to be deployed. The reason is that the development doesn't really change. You know, we still think the three initial producer wells can deliver those volumes. We just need a larger capacity flow line and, and it's an expansion of the central process facility to accommodate the greater through flow of of gas. But in terms of, you know, initial CapEx difference, it's not much. That 50% increase in production plus those additional resources can drive a 75% increase in project NPV versus CHARIOT's original development case of a 105,000,000 cubic feet a day based purely on the 2C resource.

21:56 So this is one of the key reasons why we liked the, work program, which was, put forward through the energy and partnership deal because we we see the real value in upgrading the project from day one. There's lots of further upsides that could be shown lower left on that chart that read through to the Anshua South Flank prospect beneath Anshua 1 could deliver a 1.4 TCF of resource that could flow through this infrastructure. And elsewhere in high graded tieback opportunities, which are all seismic amplitude supported, We see over two TCF of potential that can ultimately route through the infrastructure once it's on place, giving a, you know, a long term resource.

22:41 In terms of the deal structure with Energien, there are two options really. Currently, CHARIOT retains 30% working interest. Energien have the option to take a further 10. As Adonis described earlier, that would see us fully funded up to a a gross development cost of $850,000,000. We would have material free cash flows from First Gas, and there are additional payments related to, you know, gas price, royalty payments. Also, we have a convertible or energy and shares that can be exercised at our option or our election as part of that deal. Altogether, get that gives around $500,000,000 of net NPV for the project based upon anticipated gas prices.

23:28 In the case that option isn't exercised, you know, we would retain a higher working

23:33 interest in the project, access to, you know, larger cash flows from Anshua. We've retained the maximum value from the exploration upsides in and around Lixus, which as Adonis mentioned are, you know, over four TCF of resource potential. The important thing here, of course, is that we would have to fund our share of the development, but we are confident that we can do that without a dilutive, you know, equity raise being required. We see through the work that we've done with SocGen, a lot of interest with project finance. We have advanced discussions with the local banks in Morocco and also potential key strategic partners to help fund our share of the development in the case that we retain 30% working interest. And as you can see from the NPV there, it's still, you know, a very, very material project which we can use to help to fund that our share of the development.

24:28 So that is Anshua. And as I mentioned, you know, middle of August, we will start the work on Anshua East. So it'll be a very exciting couple of months ahead. In terms of the onshore, as mentioned, we've just completed our first, drilling campaign on the Lukos onshore license. We signed this license approximately one year ago, so we saw an opportunity on the three d seismic data that was existing to fast track the drilling of the first exploration wells to see if we can rapidly unlock and deliver gas resources for development. So these first two wells that we chose were on the Gophrete and the Dartois prospect, and I'll just talk you through the well results, on this slide now. On the left shows the Gophrete prospect, an updip of the LNB one well that found reservoir with some gas pays, and we drilled the R Zed K 1 well.

25:21 And that was in a fault supported trap. Now what did we find? We found very good development of, good quality reservoirs exceeding predrill expectations, you know, over twice the anticipated reservoir thickness in total.

25:36 And we found multiple gas shows through the well, including some, you know, very strong gas shows at the primary levels of interest. So, that was all looking very positive. Unfortunately, when we wireline logged, across most of those reservoirs, we could see low resistivities, and we calculated only residual gas shows over many of those. So the interpretation post drill is that we basically drilled a paleo accumulation. So this trap was once filled with gas

26:07 and probably due to late fault movement, that trap was breached and the gas escaped as as shown by those red arrows on the schematic. So the key thing for us now in terms of learning from that well, lots of positives in terms of the reservoir development and lots of positives in terms of the strength of the gas shows, supporting, you know, quite a prolific gas play in this basin is to take those learnings and see what it means for the prospects in in the area around GoFred. This is a prospect specific trap failure. On the map, around the RZK one well, you can see the other blue prospects in Lunette, Bacalab and Palmier, and then still material prospects like Eclair and Eclair West with nearly 30 BCF of combined potential sitting in, an updip location from the R Zed K 1 well.

27:01 We've just received the newly reprocessed seismic data from that three d, so we need to take those learnings and reinterpret the data and see what it means for the future exploration potential. We've fulfilled our obligations, so any future exploration drilling here is is at our option. The second well we drilled was OBA one on the Dartois prospect. This was a long trend from the RJB 3 discovery, which was made in the nineteen sixties, tested over 2,000,000 cubic feet a day of good quality gas. We estimate it to hold around five BCF of resource. In OVA one, shown on the schematic, we drilled a gross section around 200 meters, which corresponded with the predrilled targets. The uppermost reservoir, you can see there in yellow, was found high quality, but water bearing with some thin gas pays on the top. So we see some potential from that upper reservoir, which ties into RJB 3 for some up dip structures that remain to be drilled adjacent to that well, and those are targets that we're currently mapping on the new reprocessed three d seismic.

28:04 The key interval of interest in where we see the gas discovery is in the middle section. That's over a 70 meter gross gas bearing interval with elevated gas and resistivity is indicating gas pays. That is the section that we're looking to do the well testing, which is planned towards the end of q three this year. That well testing operation clearly will be looking at the different mythologies that we see in there to look at the productivity potential and then allow us to then map out the potential resources associated to the discovery and the development plan to support, you know, potential future commercial production.

28:44 But it's not just OVA one that underpins the potential value from LUCOS. On the map, you can see other discoveries. We've already mentioned RJB 3. There's also two other discoveries of note at LAM 1, which was drilled by a previous operator, which actually had gas in three zones. Two of those were tested, the upper and middle zones, but the most promising zone, the low most zone, was not tested at the time due to mechanical problems with the completion. We see around five BCF potential in that zone that we could redrill and put on test and potentially commercialize. Similarly, and very recently, another discovery called RGB two has flown under the radar really because in that area of the three d seismic, the previous data quality wasn't sufficient to really map out any potential gas resources. But on the new data, we see bright amplitudes and structures adjacent to potential pays and, gas shows in the well. So that is an area where we're assessing the potential resources that we could reevaluate through potential future drilling and testing.

29:51 So the key to unlock this commercial opportunity is shown on the next slide, which is this relationship with with Vivo. So we announced recently the signature of the heads of terms for a virtual pipeline or a CNG scheme, with them. Now Vivo are a 100% owned by the Vitol Group and the second largest distributor of of hydrocarbons in the country. So they're a key company that brings all of the experience of commercializing,

30:17 hydrocarbons, and to move that and and with, expertise in CNG from, other countries they can call on. What we would look to do is, you know, CHARIOT has the upstream with ONIM. Any gas from LUKOWS, whether that be the OVA one discovery, the other legacy discoveries, or any future success in exploration portfolio, we would process and then deliver into the midstream partnership, which would comprise Vivo fifty one with CHARIOT, an option to go in with 49%. That midstream partnership would build out that virtual pipeline development system, which is gas compression, trucks and trailers for transportation, then the decompression skids to deliver natural gas to the suppliers, so the off takers, focusing initially on the Kinetra industrial market where we understand that, you know, current gas prices are extremely high.

31:12 We can also use that midstream vehicle to also commercialize third party gas from a variety of other sources. And as you can see, that also gives CHARIOT exposure to an an additional value stream, not just the upstream from LUCOS, but also the midstream partnership whereby we would also see value from redistribution of third party gas. So alongside the OVA one flow testing, you know, we're also going to be progressing this partnership with Vivo over the current over the the next few months.

31:45 So that is, the onshore, but I think sitting alongside the Antoine East drilling, the other major catalyst in in our hydrocarbons business really is the the new venture that we're working on. So for those who followed the CHARIOT story for some time, recall that, you know, we were originally, you know, an exploration focused company focused on the Atlantic margins with major exploration projects in Brazil, in Morocco, in Mauritania, and also in Namibia. In Namibia, specifically sort of shown on the right hand side, our last well that we drilled as operators was in 2018. And actually resulting from that portfolio we held as operator, we still maintain a 10% back in right in licenses actually in the Orange Basin. So having completed the deal with Energien last year and then taking operatorship of our Moroccan offshore portfolio, we wanted to, you know, look at a new venture strategy and how we can get access to, you know, additional scalable

32:46 opportunities. And, clearly, all of that experience and the money we've invested in data and previous wells in our previous exploration ventures, it was an area for us to particularly start. And so we've been working very hard on this, and the opportunities that we're looking at do carry significant scale. Importantly, we feel that we have unique insights both to the exploration potential and also how to operate in these areas.

33:13 And the important thing here is that if we are successful in securing the licenses, we believe that these opportunities can be partnered at the asset level either through farming them out or strategic investors. So they're not necessarily going to require top company, you know, equity funding, and also opportunities where we can deliver fast track drilling within the next twelve to twenty four months to make sure that those catalysts, you know, are in the near term. We don't want, know, a very long drawn out exploration work program. We want to deliver, you know, expedited value accretive opportunities.

33:49 So, Jules, I'll hand over to you. Thanks, Duncan. So this slide summarizes our renewable power division. We are focused on our business in South Africa where the electricity market is one of the largest in Africa and where there has also been big supply issues.

34:07 What has also happened in South Africa is there's been recent and rapid deregulation of electricity market, and CHARIOT has taken advantage of that and now has one of five electricity trading licenses in South Africa. What this allows us to do is to put electricity on one part of the grid and take it off elsewhere, And through this trading license has then unlocked CHARIOT's involvement in some large wind and solar projects in South Africa. Now, this business is focused on a many to many model, so many generators to many off takers. You may have seen that we have recently signed power purchase agreements, so PPAs, with some of the largest off takers in South Africa.

34:53 For example, Growthpoint Properties, which is the largest real estate group down there. Now we announced a, a strategic review early this early this year to look to, finance this business. And I'm pleased to say that since then, we have undertaken a financing process in South Africa to look to raise $50,000,000, and we have now received offers from South African banks and other funds all at the sublevel. And we anticipate retaining a controlling stake in this business, and we believe we will be able to announce this, within the next few months. And what this does is, firstly, it finances a really interesting, scalable business with a lot of potential.

35:39 It secondly reduces the the perceived overhang on the CHARIOT listed share. It reduces our overheads, and it also provides a look through valuation for this business, which is not currently recognized in our share price. So this slide summarizes our green hydrogen business. We're focused on our large project in Mauritania where we're looking to produce green hydrogen from electrolysis or splitting of water using electricity generated from renewables, so from wind and solar. The use of that green hydrogen will be for green steel or for ammonia production. We're in a part of fifty fifty partnership with Total in this project, and we've just carried out our fee the feasibility study, and the next steps will include, agreeing the investment convention with the Mauritania government and progressing our offtake discussions.

36:38 Now at the moment, Total are bearing most of the cost of this project, so the cost for CHARIOT are small, and we're gonna look to finance this division at the sublevel as well.

36:51 So this is the timeline, and it could be argued it is the most exciting period in CHARIOT's history ahead of us. So going from the top, we've got offshore. Well, we're a matter of weeks now from commencing the Anshua East drilling. We're then looking to reach FID on that project in early twenty five with two years to first gas. On the onshore, we've got our flow test in q three. We're gonna look to progress the midstream, with Vivo with potential first gas next year.

37:27 And then on the new ventures, we've got that multibillion barrel potential. We're gonna look to secure those licenses, partner, and potentially drill next year. And on the power and the hydrogen, it's around closing that financing, starting construction of those renewable projects, and getting the read through valuation that that financing will release.

37:48 And our focus as a management team is to get these projects, these different divisions, these material different divisions to those material cash flows as quickly as possible and look to return that cash to our shareholders.

38:05 Thank you, Julian. So in summary, we've got a lot of exciting things happening in CHARIOT before year end. You've got the business in Morocco, which is, you know, looking to open up a totally new gas basin and marching towards a final investment decision on the onshore gas development. Onshore in onshore in in Morocco, we're looking to a a flow test on OVA one with a view to looking how we can bring onshore into production in partnership with Vivo. Nuvia, we're looking at this multi billion barrel opportunity. And in our renewables energy business, we're looking at funding it on the subsidiary level. And as Julian has said, that'll allow shareholders to see a see through value into that business.

38:55 We're doing the same on the green hydrogen. We've got a lot of interest in funding it on a subsidiary level, which allows shareholders to see a see through value for that that hydrogen business. A lot is happening. I just wanna remind shareholders that there is an open offer of $2,000,000 that we're allowing all of our shareholders to participate in, and also that this presentation that we just presented to you will be available on our website after this webcast. I think we'll now open it up for

39:25 questions. That's great. Thank you to you all for your presentation this morning. Ladies and please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. Just while the guys take a few moments to review your questions submitted already, I just like to remind you that recording of this presentation, along with a copy of the slides and the published Q and will be available via your Investor Meet company dashboard. As you can see guys, you've had a number of questions from investors throughout today's presentation. Thank you firstly to everybody for your engagement. If I may just hand back to you to read out those questions and I'll pick up from you at the end. Thank you. When are we going to get an update on the renewables, and what is the result of the extensive review?

40:04 So we anticipate that we will have further details, on the on the partners that we are gonna look to bring in at the at the sublevel in the next few months. And as I said before, we anticipate retaining a controlling stake in this business. Can you share your thoughts on how soon you expect the business to be delivering cash flows? It depends. I mean, if we can throw some economic viability onshore in Morocco, we could see cash flows next year from that, starting off small. And remember, as Duncan has said, those cash that that gas that we produce will be delivered to KIMITED, which is the industrial zone in Morocco. It's a different market to the power sector, and we'll do that in partnership with with Vivo with a view to doing compressed natural gas, which speeds up your production or ability to produce. You don't have to install a pipeline.

41:02 So, again, it depends on the flow tests, but if those work out well, we can get a development plan. We hope that next year sometime we could be in production onshore. That'll be the the closest to cash flow. What is the company doing to ensure capital discipline? Well, I think as as already discussed, we've carried out strategic review, on the power level. We're gonna look to finance that, separately, and that will clearly reduce, g and a. In addition, it's worth noting that we have further, consideration coming in, from our Energien transaction. So it's $15,000,000 on final investment decision whether Energien exercise the option or not. And, obviously, if they do exercise the option, we then get a $50,000,000 convertible bond or 3,000,000 Energien shares, which which produce a dividend.

41:53 Does the company anticipate carrying out any further share raises? We look. We think we this fundraising that we've just recently done will take us through to final investment decision on onshore. So we think we've covered until that point. And, obviously, we're aligned with our shareholders, and we've we tried to and in particular, this past raise, we we we minimize the quantum of the raise so as to minimize dilution, taking to account where our share price is. Will the debt relating to Energiens carry be refinanced? Potentially, that we are able to refinance it at any point, and that is that is something that we would definitely be looking at, as we head towards First Gas because there is the potential that we refinance it, and then it bring it allows you to bring those revenues, you know, further towards us and increase the the the cash that we can return to shareholders, even largest, you know, from day one.

42:51 When does the company plan for the onshore flow test to take place? As I said, we're planning to do that in September of this year. How many meters are you planning to flow test? And given all the research you've done to date, what types of flow rates are you hoping for? Sound good? Yeah. I'm assuming this is for the the onshore flow testing, so I'll answer that in that in that way. Yeah. We've got a 70 meter gross interval to test. We what we need to do is to characterize the lithologies within that. So, yeah, we're not going to flow test the full 70. We're going to be selective about the intervals that we perforate and and test. That's something that is in the planning at the moment, so I can't give a definitive answer. But, you know, we want to make sure that we, you know, get representative data or data that's representative of what the productive potential of the whole well could be.

43:46 In terms of, you know, research and what we anticipate in sort of flow testing, offset wells, we know have tested between, you know, typically 2,000,000 cubic feet a day actually tested, but the estimated productive potential is sometimes much higher, you know, five or 10,000,000 cubic feet a day. The key thing on the onshore is not the initial flow rates because you need much lower flow rates to give commercial production versus an offshore well. It's how long you can sustain, those productivities. But, you know, typically, in our business planning for the onshore, you know, producer wells produce one to 2,000,000 cubic feet a day through the life of of their production. So those are the sorts of levels that can be commercially attractive. How likely does the company believe it will be that Energia exercise is their option?

44:35 Well, you know, that you'll have to ask Energia that question, but we've, as a company, planned for both scenarios. It doesn't matter what happens. We've got a a plan if they do exercise the option and a plan if they don't exercise the option. CHARIOT one and two, have they been completed as producers? Duncan? So, yeah, Anshua one was drilled by Repsol in 2009, and and CHARIOT drilled Anshua two. So Anshua two, I'll address that one. That well was left suspended for reentry for completion as a producer. So, actually, the the reservoirs themselves were actually abandoned, but the top part of the well was retained so that we could reuse all of the, you know, the wellhead and and the the shallow casing, and then we can drill the optimal producer drain location and then to complete those sands during the development. So, yes, Anshua 2 will be reused as a producer well. On Anshua 1, that was drilled with a different well construction than we would like to optimally have for a producer.

45:43 So what we would do at Anshua 1 is we would drill a new producer well, but very close to Anshua 1. That would be the plan for a producer well in that location. The key thing is all of that reservoir data is known so that, you know, producer well is already fully derisked. It would just need a new well constructed from top to bottom. What is the low cost drill program for 2025, and how will it be financed? That drilling program will depend upon the work that we do over the coming months, and that's this commercialization plan that we're putting together with Vivo and and off the results of the OBA one testing and the evaluation of those other legacy discoveries. We need to, you know, package that up into a commercial plan, and then we will see, you know, the commercial potential and the best way to finance it.

46:34 One of the key advantages of that Vivo partnership on the midstream is that we believe that can be project financed, and that's a lot of the CapEx that would be needed to take Lucos Gas to market could be project financed with a high degree of debt on top, and we would obviously share the equity contribution for that with our partners, Vivo. So, actually, that is a very, efficient way of funding, and minimize what we need to fund from an upstream perspective. But how we fund that, I think, you know, needs to be resolved following the work that we'll do over the coming months. It's it's just worth noting that, obviously, as as already touched upon, we've got further, considerations, coming in from consideration cash coming in from energy. We've also carried out a strategic review on the on the power division.

47:23 So there are multiple different ways that we could finance, any any small equity requirement there. Is the company able to give rough guidance on how much gas is currently sold for in Morocco and or what it's been sold for over the last couple of years? So yeah. I mean, over the last few years, Morocco has been importing gas, and that has been, you know, international LNG gas, which has been regasified in Spain and then imported to Morocco south by the GME pipeline. So clearly to do that, you know, is likely to represent a premium to international, you know, gas prices, so a premium to the European price.

48:10 You know, typically, that European price, you know, sort of averages around sort of $10 per MMBtu. But, obviously, with the Ukraine crisis, there has been, you know, significant increases in volatility over the last couple of years, and, you know, the outlook for TTF remains pretty strong at around those levels. Onshore Morocco, could the company come back on the reason why the five BCF discovery at the North Of Chariots acreage that was tested at 2,000,000 cubic feet a day was not developed? Yeah. That well was drilled in the late nineteen sixties and, obviously, that was before sort of gas markets had really, you know, started and and before the gas pipeline network was really established in in the Raab Basin. So, really, that gas discovery has remained stranded since that time.

49:08 I think, you know, now is probably the time whereby, you know, we can look at potentially commercializing, you know, those legacy gas discoveries, which are, you know, obviously, you know, quite old. With regards to the partnership with Vitol in Morocco, could the company give a sense about the margin taken by the midstream business? I don't think we can get sorry. Duncan, you can carry on a little bit. I don't think we can give that that detail today. We still have to establish that that arrangement. And just bearing in mind, for Shell's note, we we would have, at our election, a 49% stake in that midstream as well. So we would benefit at the wellhead, and we'd benefit in the midstream. Sorry, Duncan. Carry on. That that that that's absolutely fine. I was just going to comment that, typically, the margins of the midstream are obviously, you know, much lower than the the margins from the upstream, which, you know, reflects the, you know, the risks in those businesses.

50:11 How certain is the company's buyback into Namibia? Well, I think we'll start off by saying, you know, we have a 10 back in right that we we've we've always had, and that's there. So that's that's something that's secure, and it's unknown. As Duncan said later on, you know, there's some exciting things happening, and we'd look at at at increasing our exposure over there. There's absolutely no 100% certainties on anything, but it's a country we have operated in for more than fifteen years, and we feel quite comfortable operating there. How does the company reconcile its move into an oil and gas jurisdiction with the with CHARIOT's recent rebranding and positioning as a transitional energy business?

51:00 Well, we are a transitional energy business, and and one needs to take it in into account that we operate on the African Continent, and the African Continent has its needs and has its rights to develop its own resources. This opportunity is something that we believe is in the benefit of all of our shareholders, and it's very important. And we it would be remiss of us not to look at it and take it seriously. At the same time, we offer a blend of energy sources through our gas, through our renewable energy, which is wind and solar, with a bit of battery support and through our green hydrogen. So we are very much a transitional energy business. I'd like to also add that, you know, we're responding also to what the markets are saying and and and what our shareholders are telling us. And, you know, as Jules said earlier on, we're getting funding for the renewable energy business and for the green hydrogen business on the subsidiary levels. And I think it's worth noting that that funding is not coming from The UK markets, which is a sign that we haven't managed at this stage to get much traction for our renewable energy business or our green hydrogen business in London. Maybe that will change as we get a see through value from those from those raises. But we're responding to the market and the questions we get on our roadshows, and the interest is very much on on our hydrocarbon side of the business.

52:16 So we're responding to the needs of our shareholders, to the requirements of our shareholders. And, also, let me say, for the benefit of Africa as well. You know? Eric? Given we've had lots of good news, why do you think it is not yet reflected in the share price? I mean, we don't know, and it's as frustrating for us as it is for our shareholders. We're acutely aware of our low share price, and we must do more to get it up there. We we need to focus on improving our share price. And I think there's a general malaise in the the broader markets. There's something going on in the energy sector, and I just don't think we're alone amongst our peers and not having a great performing share price. I think it is worth noting that we we sit at a share price which is lower than before we made the onshore two gas discovery.

53:06 But it's pointless us complaining and and and beating about it. We just get on and do our job, get the value in the business, and I think in time, the share price will respond to that. Given the scale of the offshore gas and the new ventures, are you planning to continue building slash developing small new water desalination plants? Again, that forms part of the renewable energy side of the business. And we haven't spoken about it in this presentation, but I can say that we've got a lot of interest in the water side of our business as well and funding it on that subsidiary level because water is, as we like to say, is the new solar. It's it's gonna be where a lot of focus goes on and a lot of funds are looking at at at the water side of this. And, again, it fits in with our business because you create clean, potable water using renewable resources.

54:05 So we have got a lot of interest from some funds in the water side of the business. But, again, I just wanna stress that this will be funded on the subsidiary level. Right? In the event that a second well is to be drilled on Anshua, how will this be financed? Well, no decision has been taken on a second well to be drilled. Okay? So, typically, when you when you have these rig contracts out there, you have a provision and an option to drill a second well. That had that decision to drill a second well hasn't been taken. Duncan, I don't know if you wanna add to that. No. I don't I don't think so at this this stage, I'd honestly be but you'll be alright. You know, often rig contracts do come with with options, and that's clearly one that's been stated here. But, yes, no decision's being taken.

54:55 What I would say is that any options that may sit out there, I think, are obviously in the Anshua area and would tap into the the value that I presented earlier and and look at potentially unlocking additional gas resources in the Anshua area. Is FID with Energien guaranteed? And if not, is there a plan b? I mean, you'll have to ask Energien, but I I I suspect that, you know, it's in the interest of both companies to get to an FID as soon as possible. As Duncan referred to earlier on, you know, Energen has sold a lot of their portfolio off.

55:40 So they they recently sold Egypt and Italy and Croatia off. So they're sitting with their assets in Israel and their growth in Morocco. So it's in both parties interest to get to an FID as soon as possible. And as I said earlier on, this well that we're willing drilling onshore east is not to prove whether there's gas there or not. It's to to see the scale and size of the development. I think just to add to that, you know, the reason we chose Energene as our partner from from several offers, was because of their, experience at doing these, you know, brand new gas developments, from from inception, you know, very, very rapidly. Why could the onshore gas commercialization not have been funded through the full well underspend?

56:29 Duncan? Jimmy, just repeat that. Sorry. Why why didn't the full well drilled campaign happen following the fundraise last year? Okay. Yeah. So we, the fundraise of last year, we that was just at the time of securing the LUCOS license and looking at these high graded opportunities. And at the time, we looked at, you know, potentially up to four wells to be to be funded. Now we decided that, you know, with the work that we did that we needed to reprocess the seismic data, but we thought that an appropriate first campaign was to drill two initial wells to test two different reservoir systems and two different trap types, you know, which we did.

57:23 To commit to drill four wells immediately, I think at the end of the day would have been, you know, too much. I think drilling two wells first, evaluating the results combined with the reprocessed seismic data allows us the best way to optimize future investment in drilling. We did actually buy additional stock, so tangibles and other materials that would allow us to, you know, drill potentially additional wells. So we do have that in our inventory, which would obviously, you know, be contributing reduce the cost of of future drilling, should we decide to do that. But, yeah, two wells was we we felt was the the right thing to do in that first campaign. Is the board and management aligned with shareholders, and did they take an active part in the recent fundraise?

58:14 Yes. I mean, we are actively participating in well, we did participate in this fundraise up to a million dollars, and that wasn't just the board of directors. That was senior management as well. We're very much aligned with our shareholders. And just to remind everyone is that the directors and the management are still the largest single block of shareholding in this business, and we put our money where our mouth is in this last fundraise. Thank you, Adonis. I'm conscious that we only had an hour for this, so I'll now hand back to you for closing remarks. Thank you very much, Jimmy. Yeah. Look. I mean, we are very positive here in CHARIOT about the prospects of the group going forward. We've been very busy over the last year.

59:00 We've achieved a number of goals. We've progressed all three pillars quite aggressively. And in many ways, the pillars have grown far quicker than we thought. If it wasn't for, dare I said, our languishing share price, I think people would look and say, gee, this company's actually done a lot and achieved a lot. I think as we stressed in this presentation, there are a lot of triggers happening between now and the year end, and we look forward to timelessly reporting news flow to our shareholders for this very exciting period ahead. We thank our shareholders for their loyalty and support. We also thank the institutions who supported us in this recent fundraise and look forward to our shareholders participating in the in the open offer as they've always done in the past.

59:52 Thank you very much. That's great, Adonis. You very much indeed, Julian and Duncan, for updating investors this morning. Can I please ask attendees not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of CHARIOT LIMITED, we'd like to thank you for attending today's presentation. That now concludes today's session. Wish you all a very good afternoon.