Chariot pays price for second dry well
The share price of African focused oil and gas company, Chariot this week took another major beating after the oil start-up announced Monday that it had found no oil in its second well off the Namibian coast.
The share price of the AIM-listed company reached a new yearly low of 29 pence on Wednesday down from 121.25 pence at the beginning of this month.
Before the announcement of the results of the Kabeljou well, investors had responded positively to the prospects of an oil discovery at the well, considered a much better prospect than the Tapir South well, after initial scepticism.
On 24 August, the Economist reported how Chariot’s decision, together with farm-out partners, Petrobras and BP, to go ahead with the drilling of the Kabeljou well in late July was paying dividends despite the initial scepticism from investors following the setback on the Tapir South well.
Chariot’s share price had fallen in May to a then yearly low of 71 pence upon confirmation that no commercial hydrocarbons were found in the Tapir South exploration well in Northern Block 1811A and the well will be plugged and abandoned.
However, when Chariot announced it was drilling the Kabeljou well with farm-out partners Petrobas and BP, investors started showing renewed interest in the company and the share price started to firm.
CEO Paul Welch remains upbeat despite the Kabeljou setback. He said: “Our overriding strategy remains the same – this is the second well of a larger 4 to 5 well programme in Namibia and we will continue to move forward with our work in the Central and Northern blocks.”
The next drilling programme is now set for the second half of 2013 in the central blocks.