Chariot Oil & Gas Trading Below Cash Value

Chariot Oil & Gas  (LSE: CHAR.L  ) was steady at 30 pence in early London trade this morning despite half-year results that showed the shares trading below the company's cash value.

Chariot, which is exploring for oil and gas in Africa, revealed an $84 million interim loss, of which $81 million related to writing off the Tapir South Well in Namibia. Back in May, Chariot confirmed the well had been abandoned after its drilling found "no commercial hydrocarbons."

However, Chariot's figures today revealed no debt and total cash of $112 million. The cash position was bolstered by a $49 million share placing earlier in the year.

Chariot's current market cap is £60 million, while the cash pile is equivalent to £68 million or 34 pence per share.

The discount reflects Chariot's poor run of luck of late. As well as the Tapir South Well disappointment, the group had to suffer "no commercial hydrocarbons" at a different Namibian well this month. That news chopped about two-thirds off the share price.

Paul Welch, chief executive of Chariot, remains upbeat. He said today:

We have multiple future targets for drilling in different geographic locations targeting different geological play types, as well as the opportunity to add new assets to our portfolio. Despite the recent well results being disappointing, we are still in control of our next steps and will seek to preserve this position in order to get the best value for shareholders over the longer term. We remain committed to our efforts in Namibia and will update the market with our drilling objectives for 2013 in due course.

Despite Chariot's recent drilling record, it's worth remembering these shares zoomed from 16 pence to 305 pence between 2009 and 2011 on the prospect of sizable oil discoveries.

And you never know, actual drilling success in Namibia could see similar handsome gains. Chariot's cash pile could limit the downside from here, too.

If you are keen to learn more about potential winners in the small-cap-exploration sector, the Motley Fool has published this free report to help you find them.

"How to Unearth Great Oil and Gas Shares" shows you how to evaluate an explorer's prospects and what to double-check before investing. The Fool's report also highlights an area of the oil and gas sector that could expand rapidly in the years to come.

Investing is by no means easy in today's uncertain economy. That's why we've published "Three Top Sectors" -- our guide to three favorable industries. This free report will be dispatched immediately to your inbox.

Further Motley Fool investment opportunities:

Maynard Paton does not own any share mentioned in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2026613, ~/Articles/ArticleHandler.aspx, 12/18/2014 11:43:21 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 17,580.86 223.99 1.29%
S&P 500 2,036.69 23.80 1.18%
NASD 4,712.10 67.78 1.46%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes


Advertisement