It's been a tough year for shareholders of Chariot Oil & Gas (LSE: CHAR). The African-focused explorer has suffered from dry-well syndrome, and its shares have slumped from as high as 200 pence to just 27 pence today.
Last month, Larry Bottomley was appointed as the company's executive chairman, having originally joined Chariot during September 2011 as a non-executive director.
It seems there could have been some heated discussions in the Chariot boardroom since then, as today the company announced that its chef executive, Paul Welch, and commercial director, James Burgess, are both leaving the company with immediate effect.
Bottomley becomes Chariot's new chief executive, while Mark Reid has been appointed to the board as finance director, having previously performed the same role at Aurelian Oil & Gas.
Of course, it's impossible to know what has been happening behind the scenes, but a major shake-up such as this will undoubtedly have an impact.
Chariot's market cap is £54 million, but it had £70 million of cash on its balance sheet as at June 30, 2012. At first glance, this may indicate a bargain, but oil companies are usually committed to expenditure programs under the terms of their exploration licenses. So what may seem like a healthy cash balance can soon be depleted.
In Chariot's case, it is currently carrying out a 3-D seismic program at a recently acquired block in Mauritania, and its latest presentation indicated that no new drilling was likely until the end of 2013.
Many of Chariot's licenses are offshore, with some in deep water, which is usually more expensive to explore. Nevertheless, this oil explorer has managed to attract an impressive list of partners for its recent drilling programs, and it will be interesting to see who Chariot has along for the ride next time.
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