TIDMCHAR
RNS Number : 3644D
Chariot Limited
21 June 2023
21 June 2023
Chariot Limited
("Chariot" or the "Company")
2022 Final Results
Chariot (AIM: CHAR), the Africa focused transitional energy
company, today announces its audited final results for the year
ended 31 December 2022.
Adonis Pouroulis, CEO commented:
"As the importance of a successful energy transition builds
across the world, Chariot continues to develop a business that
spans key elements of the spectrum - natural gas, renewables and
green hydrogen - each of which is likely to be a critical energy
source of the future. Over the past year we have delivered on a
number of the core objectives we set for ourselves across our three
pillars, bringing new, exciting and value accretive opportunities
into the business. Each of our projects are scalable, focused on
delivering accessible, reliable and sustainable sources of power
and each has the potential to become an important part of the
supply chain within the countries in which we operate. We are proud
of our unique position within this sector and the part we are
playing in the global energy revolution."
Key Highlights Throughout 2022 and Post Period End.
Transitional Gas - fast tracking the Anchois development project
and unlocking a new gas province in Morocco
-- Significant gas discovery and drilling operations
successfully completed on the Anchois Gas Development ("Anchois")
project, located in the Lixus licence, ("Lixus") offshore
Morocco.
-- Post-well analysis confirmed excellent, consistent gas,
delivered a material increase in resources totalling 1.4Tcf in
total remaining recoverable resources (2C and 2U) and de-risked a
number of high potential future targets.
-- Award of Rissana Offshore licence ("Rissana") located around
Lixus captured basin scale opportunity with 2U prospective resource
estimates of 7Tcf.
-- Front end engineering design ("FEED") initiated on Anchois
alongside Subsea Integration Alliance ("SIA") in June 2022 and
materially completed post period end.
-- Societe Generale appointed as financial advisor to project -
keen interest received from a number of Moroccan, African and
European banks in providing future project finance.
-- Gas sales principles agreed with ONEE for up to 0.6 BCM per
year (c. 60 mmscf per day) on a take or pay basis for a minimum of
10 years - discussions are ongoing with other offtake parties and
negotiations progressing well.
-- Pipeline tie-in agreement for the Maghreb-Europe Gas Pipeline
("GME") signed, underlining strategic proximity of Anchois to
domestic and international market.
-- Partnership agreed with Vivo Energy to develop a
gas-to-industry market in Morocco - further commercialises future
production.
-- Competitive partnering process well advanced on Anchois.
Transitional Power - providing reliable renewable energy
solutions across Africa
-- Partnership with Total Eren extended from January 2022 with
Chariot having the right to invest up to 49% into the co-developed
mining projects.
-- Over 500 MW added to the mining pipeline over the past year in partnership with Total Eren:
o Development of a 40 MW photovoltaic solar project at the
Tharisa platinum mine in South Africa,
o Partnership with First Quantum to develop a 430 MW solar and
wind project in Zambia.
o Development of a 30 MW solar plant at Karo Mining's platinum
mine in Zimbabwe.
-- Diversification through shareholding in Etana Energy (Pty)
Ltd ("Etana") - an active joint venture company ("JV") which holds
one of only three electricity trading licences in South Africa. The
JV provides access to transmit, trade and re-trade energy through
national grid and unlocks future participation in further renewable
projects.
-- Acquisition of renewable water production business, owned by
ENEO Water PTE Limited ("ENEO"), in response to increasing water
scarcity in Africa and as a complementary fit for both the
Transitional Power and Green Hydrogen pillars; first project in
Djibouti has now been commissioned.
Green Hydrogen - developing a critical energy source of the
future
-- Pre-Feasibility study completed on Project Nour in Mauritania
confirms project's world class potential.
-- Total Eren announced as partner to co-develop Nour and
progress offtake and feasibility studies.
-- Memorandum of understanding signed with the Port of Rotterdam
to establish early import supply chains into the European
market.
-- Pilot projects signed in Morocco with Mohammed VI Polytechnic
("UM6P") and Oort Energy to evaluate large scale green hydrogen
production in country.
-- Other green hydrogen projects under evaluation with plans to
further expand portfolio in Africa.
Corporate
-- Placing and oversubscribed open offer successfully raised $29.5m in June 2022.
-- Cash of $12.1 million as at 31 December 2022 with no debt and
minimal remaining work commitments.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014, as retained in the UK
pursuant to S3 of the European Union (Withdrawal) Act 2018.
Enquiries
Chariot Limited
Adonis Pouroulis, CEO
Julian Maurice-Williams, CFO +44 (0)20 7318 0450
Cenkos Securities Plc (Nomad and Joint Broker)
Derrick Lee, Adam Rae +44 (0)20 7397 8900
Stifel Nicolaus Europe Limited (Joint Broker)
Callum Stewart, Ashton Clanfield +44 (0) 20 7710 7760
Celicourt Communications (Financial PR)
Mark Antelme, Jimmy Lea +44 (0)20 8434 2754
NOTES FOR EDITORS:
About Chariot
Chariot is an Africa focused transitional energy group with
three business streams, Transitional Gas, Transitional Power and
Green Hydrogen.
Chariot Transitional Gas is focused on a high value, low risk
gas development project offshore Morocco in a fast-growing emerging
economy with a clear route to early monetisation, delivery of free
cashflow and material exploration upside.
Chariot Transitional Power is focused on providing competitive,
sustainable and reliable energy and water solutions across the
continent through building, generating and trading renewable
power.
Chariot Green Hydrogen is partnering with Total Eren and the
Government of Mauritania on the potential development of a 10GW
green hydrogen project, named Project Nour.
The ordinary shares of Chariot Limited are admitted to trading
on the AIM under the symbol 'CHAR'.
CHAIRMAN'S STATEMENT
In 2023, Chariot continued its journey to becoming a significant
energy provider across sectors and across the African continent.
Each day we move material projects forward towards
commercialisation whilst at the same time we envision and initiate
additional new ventures. These projects include natural gas and
large-scale renewable power developments, working to connect these
cleaner energy sources to industrial clients, as well as preparing
for the increasing requirement and growth of green hydrogen into
the energy supply chain.
Our Cleaner Energy Mission
The scale and importance of the transition demands focus and
cooperation across all energy sectors. Access to energy is
fundamental to achieve human growth, comfort and contribution.
Globally, it is estimated that 600 million people are living in
energy poverty; Chariot is committed to doing its part to deliver
reliable, affordable energy in all our project areas. With
increasing global volatility, the need for security of energy
supply has been amplified. Our core mission across three corporate
pillars is to deliver low cost cleaner energy options across
industries, supply chains, private and retail sectors. By having
business units that span the transitional energy space, we fit into
a great variety of commercial settings and anticipate that we will
introduce additional future opportunities across our African
footprint. We are focused on delivering multiple solutions to
multiple clients with a lower carbon focus. Our primary purpose is
to connect the abundance of the African energy resource with energy
hungry urban and industrial sectors as well as underserved
populations. The driving intention is to always accomplish these
goals via the cleanest technologies directed at projects that make
the biggest difference.
Projects with Impact
Chariot continues to focus on large scalable projects where we
have clear advantage via our expertise, technology, timing, or
position. The Moroccan offshore Anchois gas development project is
intended to resource local industry, reduce the carbon intensity of
the power sector, and potentially access and supply export European
markets. In South Africa, deregulation combined with our power
trading licence enables the amalgamation of renewable wind and
solar power generation with industrial, commercial, and retail
customers. More remote industrial applications require more
specific areal focus where we work with clients to achieve the
optimal, targeted solutions. This is illustrated by the recent
recognition of the Tharisa mine's Buffelspoort solar project as a
'Strategic Integrated Project' by the South African Presidential
Infrastructure Coordinating Commission. Finally, Project Nour is
already looking to enable multiple economic benefits to Mauritania
via significant local content integration within each of the
multiple steps of the green hydrogen development cycle. This both
introduces and enables low carbon manufacturing processes such as
green steel and ammonia production to the host country economy. In
addition, our green hydrogen group is instrumental in testing new
electrolysis and desalination technologies.
Throughout these efforts, our technical teams are busy working
with host countries, ensuring strong partner engagement,
application of the best technologies, and optimisation of project
management. At the same time, we are always looking ahead to the
next project and moving forward, step by step. It is gratifying to
see the project pipeline materialise from idea to review, to
feasibility, to materiality with the final focus on taking them
through to execution and cashflow. Our company employees have an
ideal mix of integrity, technical expertise, engagement, and
business acumen. I am proud to work with everyone at Chariot, our
partners and host countries to achieve our mission.
Focus on Sustainability
As our portfolio gains in both size and range, we are increasing
our focus on sustainability and accountability. Our commitment
towards best practice is seen in our initial materiality
assessment. Two of the United Nation's "Sustainable Development
Goals" are particularly salient to Chariot's path and underpin our
business execution. Goal 7 strives to ensure access to affordable,
reliable, sustainable, and modern energy for all while Goal 9 seeks
to focus on the construction of resilient infrastructure, foster
innovation and promote sustainable industrial growth. Every belief
and resulting activity in all our business units are aligned on
this trajectory.
Conclusion
Chariot is proud to be an active participant in the energy
transition, a movement which has enormous importance for the global
population. We continue to target advantaged, scalable growth
across the transitional gas, power, and hydrogen sectors. In
conclusion, I want to express our sincere thanks and appreciation
to the people we work with across the table, across industries and
across Africa. We look forward to an exciting, successful, and
action-packed year for all our stakeholders.
George Canjar
Chairman
20 June 2023
CHIEF EXECUTIVE OFFICER'S REVIEW
Building a sustainable energy business
We are building a diversified sustainable energy business in an
industry that is at the forefront of shaping a new energy world.
Energy security is critical to modern day civilization and without
it, social and economic stability is threatened.
As I review our progress since the last report, I am proud to
look back on our achievements in constructing the foundations of
our natural gas, renewable power and green hydrogen pillars -
energy sources which all have a critical role to play in the
future.
Our portfolio of projects has continued to evolve as we have
expanded our footprint within the transitional energy space. Over
the past year we have delivered on our core objectives across the
three businesses and broadened into new ventures with the
electricity trading licence owned by Etana and ENEO, bringing
complementary dimensions to our asset base. With our current
portfolio and plans for ongoing growth, I believe that Chariot is
one of the most unique, well positioned and exciting players in the
transitional energy sector.
Transitional Gas: Defining and unlocking a basin scale
opportunity
In January 2022, we made a significant gas discovery at the
Anchois gas project in Morocco and since then have materially
increased our resource base, completed the FEED phase of its
development, agreed key principles for long term gas sales, whilst
progressing other offtake discussions, signed a joint venture
partnership with Vivo Energy, and now are in the final stages of a
farmout partnering process on Anchois and the Lixus and Rissana
licences, which has been a very competitive process. We have also
expanded our knowledge of the wider basin potential within Lixus
and Rissana and we believe that getting Anchois into production
will unlock a new natural gas province that will be an important
energy supply for both domestic and European markets.
Transitional Power - Developing some of the largest sustainable
power projects in Africa.
We took our renewable power business from a pipeline base of 15
MW to over 500 MW throughout the year, signing up the 40 MW solar
project at the Tharisa platinum group metals mine in South Africa,
430 MW of solar and wind power at First Quantum's copper projects
in Zambia, and 30 MW of initial solar capacity at Karo Mining's
platinum mine in Zimbabwe in partnership with Total Eren which is
now becoming part of the Total Energies group. We will continue to
build out this side of the power business and will update the
market as and when there are material developments.
Our shareholding in Etana, the electricity trading business in
South Africa, which is already testing the platform, also offers
the potential to unlock further ready-to-build large-scale
renewable projects and is an enabler in securing the award of
additional projects. Etana is one of only three companies that
holds an electricity trading licence in South Africa and through
this business we have the ability to generate, transmit, trade and
re-trade energy through the country's national grid. With our broad
network in-country we have the relationships, with our joint
venture partners H1 Holdings, Neura Group and Meadows Energy, to
secure offtakes across municipalities, industrial, retail and
mining sectors so we can offer an end-to-end customer solution. We
are proud to be the first empowerment partnership of this kind in
South Africa and this business has the potential to unlock multiple
revenue streams in delivering bespoke greener energy solutions to a
wide range of consumers. We are aiming to build a pipeline of
projects that can supply circa 2 GW of power and this platform can
also expand into the wider grid network across southern Africa in
years to come.
Green Hydrogen - Critical to achieving carbon reduction
targets
A number of major participants entered the green hydrogen market
in 2022, further validating the significant potential and the size
of the prize of this industry. Our project, Project Nour, is one of
the largest green hydrogen opportunities in the world, as confirmed
by our pre-feasibility study completed in June 2022, and with Total
Eren signing up to the project as a partner. This was a significant
validation of the high quality of the project itself. We are
delighted to be working with Total Eren as they bring extensive
expertise and knowledge; we are closely aligned with them in our
belief that this will be one of the most critical commodities of
the future. We have ambitious plans as our goal is to be one of the
world's leading green hydrogen producers and we will continue to
evaluate other assets with a view to bringing them into our
portfolio.
The Business Opportunity
We believe that the transitional energy space will be one of the
most dominant sectors driving world economic growth for decades to
come. As well as finding the projects that will provide material
supply, another fundamental element is developing the technology to
enable the transformation and delivery of this energy. Innovation
is therefore also integral to success and we are at the leading
edge of technological advancements in the industry. For example,
Oort Energy's (with whom we have a strategic partnership) polymer
electrolyte membrane, and the desalination equipment utilised in
our water projects are both breaking ground in this regard - both
looking to enable the provision of energy and water on an
economical, accessible basis.
Whilst there are risks involved in these early stages, I believe
we are leading from the front and reading the direction of travel
correctly. With relentless innovation taking place in the energy
space currently, the sector is at an exciting inflection point. I
believe the energy industry has the potential to transform our
lives, just as the internet did when gave people across the world
the ability to connect on the world wide web. There are still many
unknowns to be discovered - in the early 1990's we did not know
that we would be able to use mobile phones as we do now for example
- and challenges will arise, but the scale of the potential and the
global need to decarbonise and take on the climate change
challenge, in my view, underpins the biggest business opportunity
of our time.
The Chariot ecosystem
The Chariot ecosystem forms the bedrock of the Company. Our
portfolio offers a range of investment opportunities across
different geographies, energy sources and development phases but
each pillar has relevance to the other and they share important
synergies. As well as being linked through our corporate values,
across all our projects there are common attributes of the
resources that we look to supply - reliable, affordable, accessible
commodities that can help reduce our carbon footprint and enable
diversification of wider industrial activities and downstream
development. Our business has matured significantly both in breadth
and depth as we have also developed the governance across each
pillar which has its own dedicated team and reporting structure.
Our network, shared ideas, shared vision and strategy is
fundamental to our business, and each team brings something very
special to the wider group. We have a long-term vision for this
business and we will look to capitalise on these shared benefits
whilst we grow the individual businesses within the Chariot
stable.
Corporate Review
We successfully raised US$29.5m in June 2022 to progress the
FEED for the Anchois project and for further development of our
power portfolio, and I would like to thank the new and existing
investors that supported this raise. The Chariot directors also
participated and we remain inherently aligned with all our
shareholders and focused on delivering value for all. The
importance of our projects is also underlined by the backing that
we get in each country in which we work and I would like to thank
all the host nations and Governments for their support and
partnership. It is a pleasure to work with ONHYM in Morocco and the
Ministry of Hydrocarbons, Mines and Energy in Mauritania and I
would like to thank our valued partners, Total Eren, H1 Holdings,
Neura Group and Meadows Energy for their ongoing collaboration. I
would also like to thank the Chariot family, from the Board to our
employees, partners and consultants for their dedication,
commitment and enthusiasm and of course, to our shareholders for
their ongoing support.
Looking forward
To take on the challenge of reaching 2050 targets we need a
wide-ranging transitional energy plan as we develop a new global
energy mix. There is a huge challenge around the financing of these
mega projects that are needed to accelerate the transition and
there needs to be a global understanding that if we are all to
succeed, we need something akin to a Marshall Plan to tackle this
epic issue. The transition will not be linear so we will need to
continue to adapt, collaborate and innovate but I firmly believe
that when the human spirit decides to do something, with hard work
and perseverance it can be achieved. I am excited about the future
ahead as we have set out a road map for Chariot which tries to
ensure long term growth, relevance, viability and above all
sustainability. We aim to build a company that will last long into
the future.
How we power our future world is one of the most critical issues
of our time and we are proud to be developing some of the projects
that will form key components of the future energy landscape. I
look forward to where we go from here as we move into the next
chapter in the Chariot story and continuing to update you as we
move forward on our journey.
Adonis Pouroulis
Chief Executive Officer
20 June 2023
CHIEF FINANCIAL OFFICER'S REVIEW
Funding and Liquidity as at 31 December 2022
The Group remains debt free and had a cash balance of US$12.1
million as at 31 December 2022 (31 December 2021: US$19.4
million).
During 2022, the Group invested c.US$39 million (31 December
2021: c.US$12 million) into the business through its successful
appraisal and exploration drilling campaign in Morocco, business
development within the Transitional Power and Green Hydrogen
businesses, and administration activities. Maintaining a lean cost
foundation, without impacting operational capability, remains a
core focus for the Group.
The proceeds of US$5 million raised from the issue of
underwriting shares to Magna Capital LDA in January and March 2022,
as well as the equity fundraising completed in June 2022 of US$29.5
million, allowed the Group to execute, and in the post-period
complete, the FEED of its flagship Anchois gas development project,
as well as progress opportunities within the Transitional Power and
Green Hydrogen businesses across the African continent.
As at 31 December 2022, US$0.75 million of the Group's cash
balances were held as security against Moroccan licence work
commitments. The decrease from US$5.35 million at 31 December 2021
was due to a decrease in Moroccan bank guarantees.
The appointment of Societe Generale as financial advisor to lead
debt financing of the Anchois project in Morocco demonstrates the
project's bankable economic fundamentals. We are encouraged by the
keen interest received from a range of high calibre Moroccan and
international debt finance providers in potentially participating
and look forward to providing further updates as we reach closer to
final investment decision ("FID").
Financial Performance - Year Ended 31 December 2022
The Group's loss after tax for the year to 31 December 2022 was
US$14.9 million, an increase of US$7.9 million on the US$7.0
million loss incurred for the year ended 31 December 2021. This
equates to a loss per share of US$(0.02) compared to a loss per
share of US$(0.01) in 2021.
The share-based payments charge of US$4.2 million for the year
ended 31 December 2022 was US$3.4 million higher than the US$0.8
million in the previous year mostly due to the granting of employee
and Directors' deferred share awards in the current year, and the
full year impact of awards granted to employees joining the group
as part of the Africa Energy Management Platform ("AEMP ")
Transitional Power acquisition in June 2021.
To provide further detail of total operating expenses, Green
Hydrogen and other business development costs have been split out
from other administrative expenses within the consolidated
statement of comprehensive income.
Green hydrogen and other business development costs of $1.7
million (31 December 2021: $1.1 million) comprise
non-administrative expenses incurred in the group's business
development activities.
Other administrative expenses of US$8.5 million for the year
ended 31 December 2022 are higher than the previous year's US$4.5
million due to one-off new venture costs, employment costs from
scaling up the team to progress the Anchois gas development, as
well as the inclusion of administration costs from the Transitional
Power acquisitions.
Finance income of US$0.1 million (31 December 2021: US$NIL)
relates to bank interest received on the increased cash balance
over the period, as well as foreign exchange gains on non-Sterling
currencies.
Total finance expenses of US$0.6 million (31 December 2021:
US$0.5 million) include higher foreign exchange losses of US$0.5
million (31 December 2021: US$0.4 million) resulting from the
holding of increased cash balances in Sterling to meet
administrative expenses in the current year, as well as a US$0.1
million expense (31 December 2021: US$0.1 million expense) of the
unwinding of the discount on the lease liability under IFRS 16.
Exploration and Evaluation Assets as at 31 December 2022
The carrying value of the Group's exploration and evaluation
assets in both 2022 and 2021 relates entirely to the Morocco
geographic area. During the year a further US$20.0 million (31
December 2021: US$18.9 million) was invested in the asset
comprising completion of the successful appraisal and exploration
drilling campaign and subsequent progression through engineering,
design and commercialisation work to bring the Anchois development
towards FID, along with other licence costs which were
capitalised.
Other Assets and Liabilities as at 31 December 2022
The carrying value of goodwill of US$0.4 million at 31 December
2022 (31 December 2021: US$0.4 million) relates to the acquisition
of AEMP in 2021 and reflects the intellectual property, management
team and customer relationships acquired through that business
combination. Three Memoranda of Understandings were announced for
projects in the mining portfolio totalling over 500 MW of power in
the year. These projects are large scale, early stage and are being
progressed in partnership with Total Eren and a black economic
empowerment ('BEE') partner on the Tharisa project, with minimal
commitments in the near term. No impairment of the goodwill was
identified in the period from acquisition to 31 December 2022.
The fair value of the Group's investment in power projects
relates to the 10% project equity holding in the Essakane solar
project in Burkina Faso as acquired with AEMP and is valued at
US$0.4 million (31 December 2021: US$0.4 million). The project, a
joint investment with Total Eren, continues to generate power under
a long-term power purchase agreement with IAMGOLD's Essakane
mine.
During 2022 the Group capitalised costs of $0.3 million within
property, plant and equipment in relation to the construction of a
desalination plant for the proof-of-concept water project in
Djibouti, expected to begin commercial operations in the
post-period.
In 2022, wellheads and casing valued at a total of US$1.4
million (31 December 2021: US$1.2 million) were held in inventory
relating to the Anchois drilling campaign in Morocco.
As at 31 December 2022, the Group's net balance of current trade
and other receivables and current trade and other payables shows a
net current liability position of US$5.5 million (31 December 2021:
US$14.2 million). The decrease is primarily due to significant
activity on the Moroccan drilling campaign in December 2021 for
which outstanding payables were due as at 31 December 2021.
Under IFRS 16 the Group has recognised a depreciating right of
use asset of US$0.3 million (31 December 2021: US$0.3 million) and
a corresponding lease liability based on discounted cashflows of
US$0.4 million (31 December 2021: US$0.4 million) relating to the
UK office. Following the extension of the lease term by one year in
2022, both the associated right-of-use asset and lease liability
have been modified resulting in no overall net movement of the
balances over 2022.
Outlook
The Company has achieved a significant amount in the 18 months
since the transformational gas discovery at the Anchois-2 well in
the Lixus licence in January 2022. The team has continued to drive
this development towards FID and has been progressing gas sales
agreements and debt financing options, in parallel with running a
competitive partnering process. The geotechnical team has also been
working across the wider exploration potential within the Lixus
acreage and the surrounding Rissana licence awarded in February
2022.As a result, we are progressing towards monetising a hugely
valuable basin scale opportunity with direct access to gas hungry
markets in Morocco and Europe.
We are equally enthused by the progress being made in the
Transitional Power and Green Hydrogen businesses with a number of
world class projects already in the development pipeline as well as
further opportunities that stem from our electricity trading
platform in South Africa, We remain ambitious, to continue with
this growth and development across our portfolio, but our priority
focus is on getting to cashflow as quickly as possible through the
development of our Moroccan assets.
Julian Maurice-Williams
Chief Financial Officer
20 June 2023
TECHNICAL DIRECTOR'S REVIEW OF OPERATIONS
Developing a strategic asset base
Chariot is working towards establishing a sustainable, scalable,
long-term supply of gas to support the domestic Moroccan energy
market combined with the opportunity to export surplus volumes to
Europe. Whilst we remain fully focused on bringing the Anchois gas
discovery, our "jewel in the crown", into production, and having
made significant progress towards FID over the past year, we are
also committed to leveraging our knowledge of the exploration
potential of the area to continue growing and de-risking our wider
portfolio.
Augmented by our recently announced partnership with Vivo
Energy, we have a material, diversified portfolio with access to
attractive markets and basin scale upside potential supported by a
proven gas play.
Our Projects
Chariot owns a 75% working interest in and is operator of the
Lixus Offshore and Rissana Offshore licences alongside our partner,
Office National des Hydrocarbures et des Mines ("ONHYM"), which
owns the remaining 25% working interest in each licence.
The importance of developing a material national energy resource
has significantly increased in the last year due to volatile
commodity prices and a historical reliance on energy imports.
Chariot remains dedicated to building this portfolio of projects
alongside the Kingdom of Morocco to ensure future energy
sustainability and security whilst being a catalyst for growth and
transition.
Chariot in Morocco
Our Transitional Gas pillar has had a transformational year,
beginning with the announcement of the successful Anchois-2
appraisal and exploration well in January 2022, which confirmed the
extension of the previously discovered A & B gas sands (2009)
and further identified new gas-bearing reservoirs in the lower B,
C, M and O sands exploration objectives.
The technical team worked diligently on the post-well analysis
to evaluate the impacts of the discovery, which resulted in a total
gas discovery of 150m net pay across seven stacked reservoirs - an
increase of approximately 100m of net pay above the original
discovery. Following this work, an independent assessment was
completed by Netherland Sewell & Associates Inc ("NSAI") in
July 2022, which confirmed the growing discovered resource base,
with increases of 82% in 1C contingent resources from 201 Bcf to
365 Bcf and 76% in 2C contingent resources from 361 Bcf to 637 Bcf.
The accurate prediction and discovery of new, good quality,
reservoir gas sands in the O sand interval, also materially
de-risked upside resources in the Anchois field, with the
estimation of a further 754 Bcf of 2U prospective resources in
three undrilled O sand targets with an improvement in the
probability of geological success, now ranging from 49% to 61%.
The success of Anchois-2 allowed Chariot to accelerate its
planning of the development of the gas field, with significant
progress being made on the project in 2022. FEED work commenced in
June 2022, through a collaboration with the
Subsea-Integration-Alliance SIA. The award of FEED to an integrated
engineering, procurement, construction, installation, and
commissioning alliance, gave us the opportunity to fast-track and
collaboratively fine tune the development planning phase of the
project.
Work continues across the surrounding Lixus and Rissana acreage
as we progress with our exploration in looking to find the next
Anchois. We have an extensive seismic database, the interpretation
of which has led us to develop our wider prospect inventory, of
which c.8 Tcf in 2U prospective resource was validated by NSAI in
2022, and we have recently identified further leads within the
Miocene reservoir fairway which we look to de-risk with further
seismic acquisition in due course.
With the range of assets within our portfolio, strategic
position close to infrastructure, multiple markets and a focus to
get to first gas as quickly as possible, we look forward to
unlocking and delivering tangible value from this basin-scale
opportunity.
Anchois ready for development
Since completing the Anchois-2 drilling campaign, which was
delivered safely, on time and on budget, Chariot has been working
on the development plan for the field. The conclusion of pre-FEED
stage, which incorporated the results of the drilling campaign to
verify the development concept, was followed by further definition
of the development through FEED work. This activity was performed
in collaboration with SIA and its constituent companies Subsea7 and
Schlumberger Limited ("SLB"), who made excellent progress across
the subsea-to-shore development planning.
The initial development considers three producer wells,
including a re-entry of the Anchois-2 well, with multi zone
completions to enable gas recovery across multiple stacked sands.
The producer wells will be completed subsea with associated SPS
("subsea-production-systems") infrastructure controlling and
collecting the produced hydrocarbons from the wells for delivery to
the onshore facilities via a subsea flowline. The flowline part of
the SURF ("Subsea-Umbilicals-Risers-Flowlines") package which also
includes the umbilical used to control the SPS infrastructure and
deliver chemicals to the offshore production facilities.
Importantly, the system has been developed with future expansion
capabilities in mind, to facilitate the tie-back of future
additional wells, a key component in Chariot's vision for future
growth for the field. Through the identification of the O sand
reservoir targets at Anchois, this step can already be contemplated
through simple and cost-effective exploration activities (well
deepening and pilot holes) combined with the development drilling
campaign, to evaluate the 754 Bcf of best estimate 2U gas resources
remaining to be found on the field.
Onshore, the central processing facility ("CPF") will process
the hydrocarbons for delivery of treated gas and condensate to
market. Following the increase in field resources, the initial
capacity has been increased from 70 mmscfd to 105 mmscfd. FEED
studies are complete on this facility and operating and maintenance
proposals for the early years of operations post-first gas have
been provided, allowing a smoother transition from construction to
commissioning to normal operations, prioritising Moroccan nationals
as operating personnel.
From the CPF, an onshore gas pipeline will be constructed to
tie-in to the GME at the M21 valve station. This pipeline directly
connects to the anchor gas offtakers, with a tie-in agreement
already in place and negotiations regarding the gas transportation
and ancillary agreements progressing.
Alongside FEED, the environmental, social impact assessment
("ESIA") is nearing completion and onshore and offshore
environmental baseline surveys have been conducted. Public
consultations continued in H1 2023, and the Company will submit
final documentation for consideration and approval by the
authorities shortly. In-line with requirements from potential
lending banks, this ESIA is being performed to fulfil local
obligations and also in line with IFC Performance Standards and the
Equator Principles.
Subject to financing, the next technical steps in the
development of the Anchois field will be the contracting of the
Engineering, Procurement and Construction ("EPC") for the various
scopes of the project and certain commercial proposals have already
been requested. The application for the exploitation concession
from the Government of Morocco is also in discussion, which would
give the Company rights to commercialise the gas over an initial 25
year period and which is extendable by a further 10 years. This
Concession application is supported by the field development plan
("FDP"), which is in final stages of discussion within the Lixus
Offshore joint venture partnership.
Gas Commercialisation
Future commercialisation of the Anchois gas is also key to
unlocking the development of the project. The domestic gas market
in Morocco has generally strengthened since gas sales from Algeria,
previously supplied into the Kingdom via the GME, ceased in October
2021. This coincided with a period of unprecedented volatility in
global gas markets and meant the loss of a predictable gas supply
to Morocco's domestic power plants. An alternative supply of
international gas was required to fuel these plants which led to a
resultant uptick in costly imports from Europe to fill the
shortfall.
The importance of the project as a reliable domestic gas supply
was underlined by the Gas Sales Principles signed in December 2022,
with the Office National de l'Electricité et de l'Eau Potable
("ONEE"). This agreement covers an offtake of up to 60 mmscfd over
a 10 year period on a take-or-pay basis and underpins the
development plan and financing. Additionally, Chariot signed a
Pipeline Tie-In Agreement to the major GME in Morocco with our
partners, owners and operators of the pipeline, ONHYM. This
agreement secures access to the GME, which runs from eastern
Morocco through to Tangiers in the north and across to Spain and
whilst Anchois field gas volumes could supply expected domestic
demands, the GME pipeline gives a direct conduit for surplus
volumes to be sold into Europe.
ONEE's domestic power stations, which historically have taken
gas from the GME, are those at Ain Beni Mathar and Tahaddart. These
plants have a combined generation capacity of approximately 800 MW
and have historically consumed up to 100 mmscfd, representing
approximately 7.5% of Morocco's national power generation capacity.
ONEE has also recently announced plans for the construction of the
Al-Wahda open cycle gas turbine (OCGT) power plant adjacent to the
Maghreb-Europe Gas Pipeline (GME), which is anticipated to have a
final total dual-fuel capacity of 900 MW once in operation.
To bolster and facilitate the supply of gas to industry, a
partnership agreement was signed in May 2023 with Vivo Energy, a
leading distributor of petroleum products in Morocco. This
agreement leverages Chariot's project portfolio and upstream
expertise and complements Vivo's existing customer base and
extensive knowledge of the industrial sector in country. The
partnership aims to implement a gas-to-industry business in Morocco
through the development of marketing and commercialisation of
natural gas to industrial customers as well as putting in place a
long-term gas sales agreement for a portion of the future gas
production from the Anchois project.
Beyond Morocco, export gas sales opportunities are also being
discussed with multiple offtakers, for the delivery of surplus gas
to Europe, where the desire for a diversity in gas supply following
the events in Ukraine has increased. Specifically, in Spain, the
daily demand is approximately 3 bcf/d, representing a material
established market capable of absorbing growth in production from
Chariot's projects.
The Anchois gas development project also benefits from the
investment climate in Morocco, which has world-class fiscal terms,
designed to attract investment into the sector. These terms include
a modest 3.5% royalty for offshore gas in greater than 250m water
depth and provides the benefit of a 10 year corporate tax holiday
from the onset of production. Combined with the strengthening gas
markets, this supports an outstanding commercial opportunity for
domestic development.
Partnering
The transformational potential of the Anchois gas development
project has been validated through a number of third party farmout
offers.
The partnering process has been competitive; with approximately
40 companies having accessed a data room and multiple offers were
received from significantly larger E&P companies. This process
both technically validated Chariot's development plan as well as
the exploration potential within Lixus and Rissana and selection of
the preferred bidder is now in the final stages. The offers, should
they proceed to completion, anticipate that Chariot would retain a
material stake in the licences and that there would be an upfront
cash consideration. Further, any farmout may provide the financing
of the anticipated development capital expenditure to first gas and
updates will be provided as soon as possible.
Project Financing
In April 2022, Chariot announced the appointment of Societe
Generale, a leading financial services group, to assist with the
debt project financing for Anchois. The project finance process has
continued to mature over the past year, attracting wide interest
from a variety of Moroccan and European banks. Having project
finance in place is key as it can allow additional future financing
for further expansion as the project develops.
Maturing offshore exploration - Lixus and Rissana
Chariot has operated exploration blocks offshore northern
Morocco since 2013, equipping the technical team with an
unparalleled knowledge of the margin.
Over the past decade, the work we have completed across our
licences has enabled us to compile a vast database of seismic, well
and geological data, allowing us to deploy our unique expertise and
insight to mature a large, low-risk and diverse portfolio.
Lixus
The Lixus Offshore licence covers a current area of 1,794km(2) ,
including the Anchois discovery. As a result of the successful
appraisal and exploration drilling of Anchois-2 in 2022, prospects
adjacent to the immediate Anchois field and across both Lixus and
Rissana licences have been materially de-risked, in particular
through the predictive power of a range of seismic attributes which
have demonstrated an association to gas-bearing reservoir.
Resource upgrades across our Moroccan portfolio, confirmed in
the NSAI report in 2022, demonstrate the multi-Tcf opportunity
within the wider basin. Updated assessments on two key undrilled
prospects, Maquereau and Anchois West, had uplift in both
prospective resource potential and probability of geological
success; the Anguille prospect, which was not previously evaluated,
was also validated with significant volumes located in shallow
water depths close to the coast.
These three high-graded prospects form the basis of potential
future development hubs across the Lixus licence, all of which have
tie-in capabilities with the planned Anchois infrastructure.
Combined, these prospects hold 2U prospective resources of 838 Bcf
with an estimated probability of geological success ranging from
30-52% and, with success, will unlock material additional volumes
from surrounding related prospects. The total remaining recoverable
resources (2C plus 2U, comprising audited and internal Chariot
estimates) in the entire Lixus portfolio stands at approximately
4.6 Tcf, all within this tertiary gas play linked to the Anchois
field.
Rissana
The large 8,489km(2) Rissana Offshore licence was awarded in
February 2022 and fully encompasses the maritime boundaries of the
Lixus licence. Rissana comes with minimal work commitments in the
initial period and captures a wide variety of plays across two
legacy 3D seismic surveys and extensive regional 2D data.
Rissana's diverse exploration portfolio consists of extensions
of the classic Anchois Miocene turbidite play, large Mesozoic and
Miocene structural plays and the new Miocene basin floor fan play,
recently identified on 2D data. A total 2U prospective resource of
over 7 Tcf, independently assessed by NSAI, combines the lower risk
Anchois tertiary gas play, anchored by the Emissole prospect on 3D
seismic, and multi Tcf prospects in a higher-risk Mesozoic play,
inherited from Chariot's legacy Mohammedia Offshore licence
area.
Subject to financing, further prospectivity will be matured by
an upcoming 2D seismic acquisition campaign, which will provide a
dense grid of data over identified areas of interest, focussing on
mapping further prospectivity in the Anchois gas play and also to
confirm the anticipated material potential of the basin-floor fan
plan. The campaign aims to better image trapping geometries of key
prospects, improve imaging for attribute evaluation and fluid
analysis and tie the existing 3D seismic and well data for more
robust calibration.
Domestic Gas to Industry Markets
Chariot's acreage sits in a prime position to meet industrial
needs, with 67% of Morocco's GDP originating from the Atlantic
coastal areas from Jorf Lasfar in the south to Tangier in the
north. A portion of gas volumes from Chariot's activities could be
deliverable to industry via a variety of potential solutions,
including piped gas, leveraging off of the existing GME pipeline
and existing supply pipelines in the Kenitra area, or via 'virtual
pipeline' solutions using compressed or liquified natural gas (CNG
or LNG).
The most proximal market to Chariot's activities, Kenitra, hosts
an immediate market demand of 10-15 mmscfd, where the supply gap is
currently swelling due to dwindling production onshore; supply is
decreasing by approximately 40% each year while demand is projected
to increase by 60% by 2027.
The industrial sector in Tangier will also require a supply
boost as the port city is set to expand its industrial zones
significantly; an important offtaker at the tip of the GME.
Competing with imported petroleum products such as LPG, historic
prices of gas sales to industry have commanded consistently high
prices of US$11-12 per mmbtu, which is believed to have recently
risen in response to the reduced supplies. Together, this creates
an attractive and scalable market to which Chariot is preparing to
enter, to also benefit the Kingdom through the delivery of cleaner
and cheaper energy to help drive industrial growth, realise an
important expansion of related infrastructure and deliver the
associated economic benefits to all stakeholders.
Duncan Wallace
Technical Director
20 June 2023
TRANSITIONAL POWER
Ongoing Evolution of the Transitional Power Business
Throughout 2022, the Transitional Power business secured the
development of a 40 MW solar PV project in South Africa, a 430 MW
wind and solar project in Zambia and a 30 MW solar project in
Zimbabwe; all being developed in partnership with Total Eren.
In January 2022, a three year partnership was put in place, with
the option to extend for a further two thereafter; Chariot has the
right to invest between 15-49% in the co-developed projects.
It is a pleasure to continue to work together as we are strongly
aligned with our approach to these developments, and, a s evidenced
by our collaboration in green hydrogen, there are ambitions to
collaborate on other projects and transactions in Africa.
We have also continued progress other opportunities that stem
from wider needs and scarcity of resources by expanding into
electricity trading with our shareholding in Etana and the ENEO
water acquisition.
Solar and Wind Solutions for Mining Projects in Africa.
With an ever-growing drive to lower carbon emissions, mining
companies are increasingly focused on reducing their footprints,
aligning with ESG targets and also securing a sustainable, reliable
and competitive source of energy for their often remote operations.
Our on-site power solutions help our clients decarbonise their
operations, while simultaneously reducing their operating costs and
securing a diversified source of energy supply. This allows them to
meet their sustainability requirements without compromising on
reliability and can mitigate exposure to market fluctuations.
Project Overviews:
Essakane: Burkina Faso: Solar Power Production
Chariot's first renewable project supplies 15 MW of solar power
as part of a hybrid solar-thermal power solution to IAMGOLD's
Essakane gold mine in Burkina Faso. On commissioning, the project
was the largest hybrid photovoltaic (PV)-heavy fuel oil (HFO) power
plant in the world and one of the largest solar facilities in
sub-Saharan Africa with 130,000 solar panels.
Chariot holds 10% equity in this award-winning project, with
Total Eren holding the remaining 90%. Chariot's team has been
involved in the project from the outset and has operated
successfully since its completion in 2018.
100% of permanent Essakane project staff are nationals, while 1%
of project revenues are dedicated to community investment, such as
tree planting campaigns and the distribution of solar kits to
schools. Carbon credits are also registered with the UN to raise
funds for community developments.
Tharisa: South Africa : Solar Power Generation
In February 2022, Chariot signed a memorandum of understanding
with Tharisa plc, the platinum group metals and chrome producer, to
develop a solar PV project for the supply of electricity to the
Tharisa mine, in the North West Province, South Africa.
The solar PV project is initially scoped to be 40 MW with demand
expected to increase over the life of the Tharisa Mine. Working
alongside a BEE partner, this memorandum is the first step towards
the implementation of the project and signing of a long-term power
purchase agreement for the supply of electricity on a 'take-or-pay'
basis. Project development and permitting is progressing well and
environmental approval has been received.
First Quantum Minerals: Zambia: Wind and Solar Power Project
We have also established a partnership with First Quantum
Minerals ("FQM"), a global mining and metals company, in March
2022, to advance the development of a 430 MW solar and wind power
project for its mining operations in Zambia. This flagship project
has the potential to complement and expand Zambia's existing
renewable energy capacity and would provide FQM with competitive
and sustainable power for its copper operations.
While initial development and permitting workstreams continue to
progress, the project has received high profile endorsement from
His Excellency, President Hakainde Hichilema, who publicly stated
that "Independent power producers are key to unlocking the sector
by increasing Zambia's capacity and grid stability" during a
presentation earlier this year.
Karo Mining: Zimbabwe: Solar Power Project
In Zimbabwe, we are also working on the development, financing,
construction, and operation of a solar PV project that will provide
competitive electricity for the Karo Platinum Project.
The project is expected to have an initial installed capacity of
30 MWp with a potential extension of up to 300 MWp and is being
built as part of the Karo mine's construction.
Electricity Trading Licence
Chariot has broadened both its exposure and approach to the
renewable energy sector within South Africa, in acquiring an
interest in Etana which holds an electricity trading licence and
which is already testing the platform.
Etana's objective is to deliver unique renewable energy mix
solutions at competitive prices to help address the significant
power requirements across South Africa with the licence opening up
access to a range of high-volume off-takers including municipal,
industrial and retail customers. Etana is owned indirectly by
Chariot (25%), the Neura Group ("Neura") (49%), H1 Holdings (21%)
and Meadows Energy (5%) H1 Holdings and Meadows Energy have a
proven track record in developing and investing in large renewable
projects in Africa, whilst Neura has developed a unique hardware
and software-based technology specifically designed for trading in
the South African environment.
The Market Opportunity
South Africa, the largest electricity market on the sub-Saharan
Africa, is currently facing a severe power crisis with daily load
shedding. The country is under pressure to meet growing power
demand with cleaner resources, while simultaneously addressing its
overreliance on a system that remains largely fueled by coal and is
failing to generate sufficient supply. To tackle the crisis, the
government is rapidly deregulating the market to allow private
generation and there is an increasing shift towards renewable power
and greener energy solutions that can capitalise on the country's
world-class solar and wind resources. Chariot, alongside potential
partners, is looking to bring into production a number of "shovel
ready" opportunities that will add new clean power capacity to the
grid.
Renewable Water Production Business
Post period, we also announced the acquisition of the business
and assets of an independent water producer, ENEO, which is
complementary to both our Transitional Power and Green Hydrogen
businesses. The business is focused on delivering clean water
solutions using renewable energy and our intention is to originate,
invest in and own decentralized water supply projects that can
provide affordable water access for private offtakers and
municipalities through long term agreements. Utilising a modular,
scalable, reverse osmosis technology that can be powered 100% by
solar energy to produce desalinated water, a proof-of-concept
project at the largest windfarm in Djibouti has now been
commissioned. This project will provide 50 m(3) potable water per
day to local communities for the next 20 years and the team is
looking to build out this offering into further jurisdictions on
the continent.
We continue to look at strategic partnering opportunities at the
subsidiary level to provide equity finance for these projects. In
parallel, we are actively pursuing other renewable energy projects
across the continent alongside our partner Total Eren.
GREEN HYDROGEN
World class project with world class resources
Chariot's green hydrogen project, "Project Nour" spans two
onshore areas, totalling approximately 5,000km(2) across northern
Mauritania. With up to 10 GW of electrolysis to be installed, it
could become, once implemented at scale, one of the most
significant green hydrogen projects in Africa and one of the
largest global projects of its kind by 2030.
The Market Opportunity
Green hydrogen, produced by splitting water through electrolysis
using renewable energy, currently makes up 2-4% of total global
hydrogen production, approximately 115 Mt per annum. The
International Renewable Energy Agency (IRENA) projects that the
combined value of hydrogen and its derivatives will be larger than
the fossil fuel market by 2050 and estimates that global demand
will reach up to 800 million tonnes by that decade, with green
hydrogen potentially meeting up to 100% of this demand. As demand
rises and green hydrogen is increasingly adopted as a reliable,
sustainable energy source, Deloitte predicts that the market is
expected to be greater than the value of liquid natural gas trade
by 2030 and further grow to reach US1.4 trillion per year by
2050.
Project Nour has the ability to generate 1.2 Mt of green
hydrogen per year so meeting global demand would require over 600
similar sized projects. This demonstrates the enormous growth
potential of the hydrogen industry and the need for giga-scale
projects like Nour. This scale of green hydrogen production will
require massive amounts of dedicated renewable energy generation
and infrastructure but will be an essential component for
decarbonizing hard-to-abate sectors such as heavy industry,
shipping and transport.
Project Overview
Mauritania has unique and complementary solar and wind
resources, and as confirmed by the Pre-Feasibility Studies
completed in May 2022, Project Nour has the potential to produce
some of the most competitive green hydrogen in the world. Due to
its scale, Project Nour has the size and the potential to move the
needle of Mauritania's GDP and its society at large, contributing
to a range of sustainable economic benefits including providing
baseload power to the national grid, diversifying industrial
activities such as enabling green steel and green ammonia
production, promoting job creation and developing local
infrastructure. It could also provide a cost effective,
transportable energy solution to replace CO(2) emitting fuels for
export to the European market and the MoU signed with the Port of
Rotterdam in April 2022 was a first step towards establishing these
supply chains.
Chariot was delighted to bring in Total Eren as a 50:50 partner
to co-develop the project last September. Total Eren, which counts
TotalEnergies, the multi-energy company as a strategic shareholder,
brings access to the wider group's specialist 'One Tech'
engineering team which has wide ranging expertise and experience in
developing solar, wind and green hydrogen projects globally.
Chariot is co-leading on project development, permitting and
stakeholder engagement and the partnership is currently progressing
with the in-depth feasibility studies and pursuing offtake
options.
Local Content
Socio-economic benefits of hydrogen projects have become a focal
area and Chariot is currently developing a dedicated programme in
line with the Government's recently published local content
strategy. The partnership has teamed up with a consultancy to find
areas of opportunity for local businesses and assess the training
needed to maximise local labour with the aim of ensuring as much
in-country participation as possible. Seventeen focus areas have
been identified, based upon the additional skills, certifications
and capital required. This analysis has been shared with the
business community and selected donor organisations to look to
target specific investments needed to make successful bids and
incentive mechanisms are being devised to ensure local content is
actively promoted during the tendering process.
The Chariot-Total Eren partnership is proud to be working
alongside the Government of Mauritania to support its ambition to
become a leading producer and exporter of green hydrogen, while
ensuring that Nour delivers in-country value in line with broader
economic development.
Developing projects of this scale:
Great progress has been made across this sector over the past
two years. However, green hydrogen remains a nascent industry that
will require innovative and collaborative solutions to ensure the
ongoing development of these giga-scale projects. The cost of
capital remains one of the key drivers to achieve project economics
and there is notable momentum from the Government of Mauritania to
champion efforts in this regard. It is developing a supportive
regulatory and business environment while providing a platform for
collaboration. Chariot and Total Eren representatives recently
attended the 'Accelerating Finance Conference' in Nouakchott, one
of the first events to bring such a range of critical stakeholders
including the World Bank, the European Investment Bank, development
finance institutions and bilateral partners together to discuss
this critical issue. Partnerships across the industry will be key
to delivering these projects and it was encouraging to see such
collective alignment to look to cooperate and unlock the
transformative potential of green hydrogen.
Project Nour will be built in multiple phases to spread the
financing requirements and reduce the risk over time whilst also
responding to the increasing shift in demand for green hydrogen
products. Taking a phased approach will both allow revenue
generation early in the project and optimise the cost of the
capital.
Proof-of-Concept projects
An important part of Chariot's green hydrogen story is our
collaboration with Oort Energy. Together we are developing
proof-of-concept projects, including with Mohammed VI Polytechnic
("UM6P") in Morocco to test Oort's proprietary polymer electrolyte
membrane electrolyser system. Access to electrolysers will be
critical to getting green hydrogen projects off the ground, and as
the sector develops, demand for these will see exponential growth.
It is fascinating to work with Oort to see their ongoing progress
within the electrolyser space, their ethos is aligned with ours in
that they are focused on making green hydrogen economical and
having access to their technology will be an important part of our
project supply chain in the future. It is also great to be working
on pilot projects and to be building education and capacity around
green hydrogen and ammonia production in Morocco alongside UM6P.
These pilots are being carried out with a view to develop large
scale projects in various jurisdictions including Morocco, as well
as looking to achieve the lowest cost of hydrogen possible.
Desalinated water is also an essential component of green
hydrogen production, so the capacity to implement competitive
desalination solutions powered by renewable energy, a focus for
Chariot's water business, will also be a critical part of the
feasibility for both Project Nour and other green hydrogen
projects.
Our aim is to become one of the world's leading green hydrogen
producers so we will continue to seek out these opportunities to
both expand and develop our footprint in this sector.
ESG - OUR COMMITMENT TO SUSTAINABLE OPERATIONS
Robust management of environmental, social and governance (ESG)
concerns are at the core of what we do and how we work. Chariot
seeks to embed a responsible approach to ESG management throughout
the business. This statement provides an outline of the policies in
place that guide the Group and its employees across its business
pillars.
Chariot adopts industry best practice through using the IFC
Performance Standards, Equator Principles, and the United Nations'
Sustainable Development Goals as benchmarks and guiding principles.
Chariot also complies with applicable environmental laws,
regulations and standards of the countries in which we are
present.
Operating responsibly with a focus on continuous improvement
We acknowledge the potential ESG impacts that our activities may
have as we develop our projects. Our team is committed to
proactively identifying and assessing issues that are important to
our business and to our stakeholders. We manage these and their
associated risks and seek to minimise the impacts of our activities
as far as possible by putting robust frameworks and policies in
place.
In addition, we are continue to build our ESG capacity
throughout the organisation, from site level environmental and
social specialists to experienced ESG managers, as well as the
engagement of expert consultants to provide further advice and
support.
Over the past year and in recognition of the importance of
stakeholders, external impacts, and risks Chariot has undertaken to
update and review our Materiality Assessment in line with the
Global Reporting Initiative ("GRI") framework. Greenhouse gas
emissions and climate adaptation, resilience and transition emerge
as the two most material issues for the company followed closely by
safety and security considerations, land access and community
benefits. These issues have been linked to the Sustainable
Development Goals which will guide project development and
implementation in the future.
Focus on Reducing Emissions
Due to the transitional nature of Chariot's energy projects,
each offers the opportunity to reduce carbon emissions as a result
of their implementation:
-- Morocco's energy needs are heavily dependent on coal (which
currently makes up 70% of the country's requirements) and gas
imports. The domestic gas from Chariot's Anchois project has the
potential to directly supply into the national grid and become an
important contributor in rebalancing the country's energy mix and
reducing emissions going forward.
-- Chariot's renewable power projects are bespoke solutions for
mining companies, often sited in locations well away from power
grids. Accessing wind and solar power for use directly on the mine
sites removes the dependence on and need for transportation of
carbon heavy fuel and provides a renewable, long term energy
supply. Wheeling renewable power through the South African national
grid through Etana will also notably reduce the reliance on coal
fired power stations opening up a wider customer base including
municipalities, industrial and retail sectors.
-- Green hydrogen also has the potential to supplement and
replace traditional fossil fuels in both power generation and
manufacturing processes, leading to a significant reduction in
associated emissions of greenhouse gases. It also has the potential
to stimulate the development of greener primary industry (such as
green ammonia and green steel production) and could lead to
significant, positive long term impacts for Mauritania as well as
the entire global energy transition.
Two of the UN SDGs are particularly relevant to across our each
of our business pillars and underpin our strategy and our
values:
Goal 7:
Ensure access to affordable, reliable, sustainable modern energy
for all - specifically around increasing the share of renewable
energy in the global energy mix, improving energy efficiency and
advanced and cleaner fossil-fuel technology...expansion of
infrastructure and upgrade technology for supplying modern and
sustainable energy services for developing countries
Goal 9:
Build resilient infrastructure, promote inclusive and
sustainable industrialisation and foster innovation - ... raise
industry's share of employment and gross domestic product, in line
with national circumstances...upgrade infrastructure and retrofit
industries to make them sustainable with increased resource-use
efficiency and greater adoption of clean and environmentally sound
technologies and industry.
Alignment to the Sustainable Development Goals
Based on the updated Materiality Assessment and key goals,
Chariot's alignment to the UN SDG's have been reviewed accordingly,
with key targets for each one selected. This will also guide the
reporting framework going forward.
Chariot Limited
Consolidated Statement of Comprehensive Income for the Year
Ended 31 December 2022
Year ended Year ended
31 December 31 December
2022 2021
Notes US$000 US$000
Share based payments 26 (4,168) (760)
Hydrogen and other business
development costs (1,704) (1,139)
Other administrative expenses (8,478) (4,549)
--------------------------------------- ------ -------------- --------------
Total operating expenses (14,350) (6,448)
--------------------------------------- ------ -------------- --------------
Loss from operations 4 (14,350) (6,448)
Finance income 6 74 -
Finance expense 6 (608) (512)
Loss for the year before taxation (14,884) (6,960)
Tax expense 8 - -
--------------------------------------- ------ -------------- --------------
Loss for the year (14,884) (6,960)
--------------------------------------- ------ -------------- --------------
Other comprehensive income:
Items that will be reclassified -
subsequently to profit or loss
Exchange differences on translating (3) -
foreign operations
--------------------------------------- ------ -------------- --------------
Other comprehensive income (3) -
for the year, net of tax
Total comprehensive loss for
the year (14,887) (6,960)
--------------------------------------- ------ -------------- --------------
Loss for the year attributable
to:
Owners of the parent (14,882) (6,960)
Non-controlling interest (2) -
--------------------------------------- ------ -------------- --------------
(14,884) (6,960)
--------------------------------------- ------ -------------- --------------
Total comprehensive loss attributable
to:
Owners of the parent (14,885) (6,960)
Non-controlling interest (2) -
--------------------------------------- ------ -------------- --------------
(14,887) (6,960)
--------------------------------------- ------ -------------- --------------
Loss per Ordinary share attributable 9 US$(0.02) US$(0.01)
to the equity holders of the
parent - basic and diluted
--------------------------------------- ------ -------------- --------------
All amounts relate to continuing activities.
The notes form part of these final results.
Chariot Limited
Consolidated Statement of Changes in Equity for the Year Ended
31 December 2022
For the year Other
ended 31 Share Share Share components Retained Total Non-controlling Total
December 2021 capital premium based of equity deficit attributable interest equity
payment to equity
reserve holders of
the parent
US$000 US$000 US$000 US$000 US$000 US$000 US$000 US$000
--------------- --------- --------- --------- ------------ ---------- -------------- ----------------- --------
As at 1
January 2021 6,549 359,609 1,447 796 (352,239) 16,162 - 16,162
Loss for the
year - - - - (6,960) (6,960) - (6,960)
Other - - - - - - - -
comprehensive
income
--------------- --------- --------- --------- ------------ ---------- -------------- ----------------- --------
Loss and total
comprehensive
loss for the
year - - - - (6,960) (6,960) - (6,960)
Issue of
capital 5,147 25,585 - - - 30,732 - 30,732
Issue costs - (1,876) - - - (1,876) - (1,876)
Share based
payments - - 760 - - 760 - 760
Share based
deferred
consideration - - - 142 - 142 - 142
As at 31
December 2021 11,696 383,318 2,207 938 (359,199) 38,960 - 38,960
--------------- --------- --------- --------- ------------ ---------- -------------- ----------------- --------
Chariot Limited
Consolidated Statement of Changes in Equity for the Year Ended
31 December 2022 (continued)
For the year
ended 31 Share Other
December 2022 Share Share based components Retained Total Non-controlling
capital premium payment of equity deficit attributable interest Total
reserve to equity equity
holders of
the parent
US$000 US$000 US$000 US$000 US$000 US$000 US$000 US$000
--------------- --------- --------- --------- ------------ ---------- -------------- ----------------- ---------
As at 1
January 2022 11,696 383,318 2,207 938 (359,199) 38,960 - 38,960
Loss for the
year - - - - (14,882) (14,882) (2) (14,884)
Other
comprehensive
income - - - (3) - (3) - (3)
--------------- --------- --------- --------- ------------ ---------- -------------- ----------------- ---------
Loss and total
comprehensive
loss for the
year - - - (3) (14,882) (14,885) (2) (14,887)
Issue of
capital 2,567 32,143 (276) - - 34,434 - 34,434
Issue costs - (1,618) - - - (1,618) - (1,618)
Share based
payments - - 4,168 - - 4,168 - 4,168
As at 31
December 2022 14,263 413,843 6,099 935 (374,081) 61,059 (2) 61,057
--------------- --------- --------- --------- ------------ ---------- -------------- ----------------- ---------
The notes form part of these final results.
Chariot Limited
Consolidated Statement of Financial Position as at 31 December
2022
31 December 31 December
2022 2021
Notes US$000 US$000
Non-current assets
Exploration and evaluation assets 10 51,795 31,750
Goodwill 11 380 380
Investment in power projects 12 448 450
Property, plant and equipment 15 428 84
Right of use asset 19 332 328
Total non-current assets 53,383 32,992
----------------------------------- ------ ------------ ------------
Current assets
Trade and other receivables 16 755 1,167
Inventory 17 1,424 1,183
Cash and cash equivalents 18 12,052 19,406
----------------------------------- ------ ------------ ------------
Total current assets 14,231 21,756
----------------------------------- ------ ------------ ------------
Total assets 67,614 54,748
----------------------------------- ------ ------------ ------------
Current liabilities
Trade and other payables 20 6,198 15,358
Lease liability: office lease 19 359 430
----------------------------------- ------ ------------ ------------
Total current liabilities 6,557 15,788
----------------------------------- ------ ------------ ------------
Total liabilities 6,557 15,788
----------------------------------- ------ ------------ ------------
Net assets 61,057 38,960
----------------------------------- ------ ------------ ------------
Capital and reserves attributable
to equity holders of the parent
Share capital 21 14,263 11,696
Share premium 413,843 383,318
Share based payment reserve 6,099 2,207
Other components of equity 22 935 938
Retained deficit (374,081) (359,199)
----------------------------------- ------ ------------ ------------
Capital and reserves attributable
to equity holders of the parent 61,059 38,960
----------------------------------- ------ ------------ ------------
Non-controlling interest 13 (2) -
----------------------------------- ------ ------------ ------------
Total equity 61,057 38,960
----------------------------------- ------ ------------ ------------
The notes form part of these final results.
The financial statements were approved by the Board of Directors
and authorised for issue on 20 June 2023 .
George Canjar
Chairman
Chariot Limited
Consolidated Cash Flow Statement for the Year Ended 31 December
2022
Year ended Year ended
31 December 31 December
2022 2021
US$000 US$000
Operating activities
Loss for the year before taxation (14,884) (6,960)
Adjustments for:
Finance income (74) -
Finance expense 608 512
Depreciation 472 358
Share based payments 4,168 760
Net cash outflow from operating
activities before changes in working
capital (9,710) (5,330)
Decrease/ (Increase) in trade and
other receivables 210 (116)
(Decrease)/ Increase in trade and
other payables (132) 445
Increase in inventories - (1,183)
Cash outflow from operating activities (9,632) (6,184)
Net cash outflow from operating
activities (9,632) (6,184)
----------------------------------------- -------------- --------------
Investing activities
Finance income 62 -
Payments in respect of property,
plant and equipment (256) (72)
Payments in respect of exploration
assets (29,243) (5,301)
Net cash consideration on acquisition - (21)
Net cash outflow used in investing
activities (29,437) (5,394)
----------------------------------------- -------------- --------------
Financing activities
Issue of ordinary share capital
net of fees 32,816 28,175
Payments of lease liabilities (501) (419)
Finance expense on lease (27) (46)
----------------------------------------- -------------- --------------
Net cash from financing activities 32,288 27,710
----------------------------------------- -------------- --------------
Net (decrease)/ increase in cash
and cash equivalents in the year (6,781) 16,132
Cash and cash equivalents at start
of the year 19,406 3,740
Effect of foreign exchange rate
changes on cash and cash equivalents (573) (466)
Cash and cash equivalents at end
of the year 12,052 19,406
----------------------------------------- -------------- --------------
The notes form part of these final results.
Chariot Limited
Notes forming part of the financial statements for the year
ended 31 December 2022
1 General information
Chariot Limited is a company incorporated in Guernsey with
registration number 47532. The address of the registered office is
Oak House, Hirzel Street, St Peter Port, Guernsey, GY1 2NP. The
nature of the Company's operations and its principal activities are
set out in the Report of the Directors and in the Technical
Director's Review of Operations.
2 Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with
UK Adopted International Accounting Standards.
In accordance with the provisions of section 244 of the
Companies (Guernsey) Law, 2008, the Group has chosen to only report
the Group's consolidated position, hence separate Company only
financial statements are not presented.
The financial statements are prepared under the historical cost
accounting convention on a going concern basis.
In the consolidated statement of comprehensive income Other
Administrative expenses has been split out to provide further
detail of total operating expenses. The comparative figures for 31
December 2021 have been re-presented to reflect this additional
disclosure. There is no change to the total operating expenses or
loss from operations for those periods.
Going concern
As at 31 December 2022 the Group had cash of US$12.1 million, no
debt and minimal licence commitments.
The Group operates as a transitional energy group focused on
developing large-scale gas, renewable power, and hydrogen projects
in Africa. To date, it has not earned any revenues and so is
reliant on various options, including asset partnering, project
finance debt, and equity placements to finance the Group's
overheads and progress its projects to first revenues.
The Board have reviewed a range of potential cash flow forecasts
for the period to 31 December 2024, including reasonable possible
downside scenarios. This has included the following
assumptions:
Anchois Gas Development:
On the Group's Anchois gas development, offshore Morocco,
significant progress has been made since the successful drilling at
the start of 2022, with the completion of the engineering and
design for the development, ongoing detailed negotiations with
Moroccan and other gas offtakers and a consortium of Moroccan and
international banks indicating their strong support to provide
project debt finance.
On the Anchois asset partnering process, there has been strong
industry interest, with 40 companies participating and multiple
offers received, and as such management is confident, based on the
advanced stage of negotiations, that the partnering process will
complete shortly. Based on current negotiations, the Group
anticipates that an agreement would see Chariot receive both an
upfront cash recovery payment and the financing of the Group's
share of the Anchois development costs so the progression towards
achieving first gas and delivering cashflows to investors can
happen as quickly as possible.
Management's possible downside scenario includes a delay or a
failure to complete a partnering transaction. Management is
confident that alternate financing options are available, including
project finance debt and further investments in the Group to enable
progress on the Anchois project to first revenues and to fund
ongoing overheads.
Power and Hydrogen Projects :
The renewable and hydrogen projects are at an earlier stage of
development and the Group is evaluating project finance and
investment at subsidiary levels ahead of any significant capital
requirement.
Management's possible downside scenario includes a delay or
failure to secure investment at the subsidiary levels to fund its
share of future capital expenditure on projects and related
overheads. Management is confident that alternate financing options
are available ahead of any making any significant capital
commitments.
Conclusion
The Directors have reviewed the Group's cash flow forecasts for
the next 18-month period to December 2024. The Group's forecasts
and projections indicate that the Group's ability to meet its
obligations as and when they fall due is dependent on a variety of
factors, including the completion of a partnering agreement in
respect of the Anchois project. Based on the offers received and
the significant historic and ongoing investment on the Anchois
project, it is anticipated that the Group will recover a
significant portion of past cash expenditure in the second half of
2023. If partnering fails to complete, management is confident that
alternate financing options are available to fund ongoing project
work and overheads. In the event that neither a partnering
agreement or alternative financing is concluded, the Group has
sufficient cash to meet its corporate overhead until Q4 2023.
Based on feedback from ongoing financing and partnering
discussions, the Directors have made a judgement that the necessary
funds to adequately finance the Group's obligations will be secured
and that the Group will continue to realise its assets and
discharge its liabilities in the normal course of business.
Accordingly, the Directors have adopted the going concern basis in
preparing the consolidated financial statements, however, the need
for additional financing indicates the existence of a material
uncertainty, which may cast significant doubt about the Group's
ability to continue as a going concern, and, its ability to realise
its assets and discharge its liabilities in the normal course of
business. These financial statements do not include adjustments
that would be required if the Group was unable to continue as a
going concern.
New Accounting Standards
The following new standards and amendments to standards are
mandatory for the first time for the Group for the financial year
beginning 1 January 2022. The implementation of these standards and
amendments to standards has had no material effect on the Group's
accounting policies.
Standard Effective year
commencing on
or after
Annual Improvements to IFRS: 2018-2020 Cycle 1 January 2022
---------------
Conceptual Framework for Financial Reporting 1 January 2022
(Amendments to IFRS 3)
---------------
IAS 37 Provisions, Contingent Liabilities 1 January 2022
and Contingent Assets (Amendment - Onerous
Contracts - Cost of Fulfilling a Contract)
---------------
IAS 16 Property, Plant and Equipment (Amendment 1 January 2022
- Proceeds before Intended Use)
---------------
Certain new standards and amendments to standards have been
published that are mandatory for the Group's accounting periods
beginning after 1 January 2023 or later years to which the Group
has decided not to adopt early when early adoption is
available.
The implementation of these standards and amendments is expected
to have no material effect on the Group's accounting policies.
These are:
Standard Effective year
commencing on
or after
IFRS 17 Insurance Contracts 1 January 2023
---------------
IAS 1 Presentation of Financial Statements 1 January 2023
and IFRS Practice Statement 2 (Amendment
- Disclosure of Accounting Policies)
---------------
IAS 8 Accounting policies, Changes in Accounting 1 January 2023
Estimates and Errors (Amendment - Definition
of Accounting Estimates)
---------------
IAS 12 Income Taxes (Amendment - Deferred 1 January 2023
Tax related to Assets and Liabilities arising
from a Single Transaction)
---------------
IFRS 16 Leases (Amendment - Liability in 1 January 2024
a Sale and Leaseback)
---------------
IAS 1 Presentation of Financial Statements 1 January 2024
(Amendment - Classification of Liabilities
as Current or Non-Current)
---------------
IAS 1 Presentation of Financial Statements 1 January 2024
(Amendment - Non-current Liabilities with
Covenants)
---------------
IFRS 16 - Leases
Under IFRS 16 lease liabilities are initially measured at the
present value of the remaining lease payments and discounted using
an incremental borrowing rate at the date of recognition.
Associated right-of-use assets are measured at an amount equal to
the lease liability adjusted for any prepaid or accrued lease
payments.
Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to profit or loss over
the lease period to produce a constant periodic rate of interest on
the remaining balance of the liability for each period. The
right-of-use asset is depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis.
The Group has elected not to recognise right-of-use assets and
liabilities for leases where the total lease term is less than or
equal to 12 months, or for leases of low-value assets. Low-value
assets comprise IT equipment and small items of office furniture.
Payments associated with short-term leases and leases of low-value
assets are recognised on a straight-line basis as an expense in
profit or loss.
Further details on the lease liability can be found in note
19.
Exploration and evaluation assets
The Group accounts for exploration and evaluation costs in
accordance with the requirements of IFRS 6 Exploration for and
Evaluation of Mineral Resources.
Any costs incurred prior to obtaining the legal rights to
explore an area are expensed immediately to the Income Statement.
All expenditures relating to the acquisition, exploration and
appraisal of oil and gas interests, including an appropriate share
of directly attributable overheads, are recognised as exploration
and evaluation assets and initially capitalised by reference to
appropriate geographic areas. Costs recognised as exploration and
evaluation assets are transferred to property, plant and equipment
and classified as oil and gas assets when technical feasibility and
commercial viability of extracting hydrocarbons is
demonstrable.
Costs recognised as exploration and evaluation assets are tested
for impairment whenever facts and circumstances suggest that they
may be impaired. Where exploration wells have been drilled,
consideration of the drilling results is made for the purposes of
impairment of the specific well costs. If the results sufficiently
enhance the understanding of the reservoir and its characteristics
it may be carried forward when there is an intention to continue
exploration and drill further wells on that target.
Where farm-in transactions occur which include elements of cash
consideration for, amongst other things, the reimbursement of past
costs, this cash consideration is credited to the relevant accounts
within the geographic area where the farm-in assets were located.
Any amounts of farm-in cash consideration in excess of the value of
the historic costs in the geographic area are treated as a credit
to the Consolidated Statement of Comprehensive Income.
Investment in power projects
The Group, through its subsidiary Chariot Transitional Power
France , holds a 10% investment in the Essakane solar project,
Burkina Faso. This investment is recognised at fair value through
profit and loss with any movement in fair value subsequently
recognised in the Consolidated Statement of Comprehensive
Income.
The investment is not held under a 'hold to collect' or 'hold to
collect and sell' business model and is therefore categorised as
fair value through profit and loss.
Further details on the investment in power projects can be found
in note 12.
Inventories
The Group's share of any material and equipment inventories is
accounted for at the lower of cost and net realisable value. The
cost of inventories comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
Taxation
Income tax expense represents the sum of the current tax and
deferred tax charge for the year.
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial statements and
the corresponding tax bases, and is accounted for using the balance
sheet liability method. Deferred tax liabilities are recognised for
all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that have been
enacted or substantively enacted and are expected to apply in the
year when the liability is settled or the asset realised. Deferred
tax is charged or credited to the Consolidated Statement of
Comprehensive Income, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Foreign currencies
Transactions in foreign currencies are translated into US
Dollars at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies
are translated into US Dollars at the closing rates at the
reporting date and the exchange differences are included in the
Consolidated Statement of Comprehensive Income.
The functional currency of the Company and its subsidiaries is
the US dollar, except for Chariot Transitional Power France,
Chariot Transitional Power Africa and Chariot Transitional Power
South Africa Pty Limited which have the European Euro as their
functional currency.
Translation gains or losses resulting from the translation of
the financial statements from the functional currency to the
presentation currency are recorded as a foreign currency
translation reserve in the Statement of Changes in Equity.
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost or fair value
on acquisition less depreciation and impairment. As well as the
purchase price, cost includes directly attributable costs and the
estimated present value of any future unavoidable costs of
dismantling, decommissioning and removing items. The corresponding
liability is recognised within provisions. Depreciation is provided
on a straight line basis at rates calculated to write off the cost
less the estimated residual value of each asset over its expected
useful economic life. The residual value is the estimated amount
that would currently be obtained from disposal of the asset if the
asset were already of the age and in the condition expected at the
end of its useful life.
Assets in the course of construction are carried at cost, less
any recognised impairment loss. Depreciation of these assets, on
the same basis as other assets, commences when the assets are
complete and ready for their intended use.
Fixtures, fittings and office equipment are depreciated using
the straight line method over their estimated useful lives over a
range of 3 - 5 years.
Energy plant and equipment is depreciated using the straight
line method over their estimated useful lives over a range of 5 -
20 years.
The carrying value of property, plant and equipment is assessed
annually and any impairment charge is charged to the Consolidated
Statement of Comprehensive Income.
Goodwill
Goodwill represents the excess of the cost of a business
combination over the Group's interest in the fair value of
identifiable assets, liabilities and contingent liabilities
acquired.
Goodwill is initially recognised as an asset at cost and is
subsequently measured at cost less accumulated impairment
losses.
The Group tests goodwill annually for impairment, or more
frequently if there are indications that goodwill might be
impaired.
Share based payments
Where equity settled share awards are awarded to employees or
Directors, the fair value of the awards at the date of grant is
charged to the Consolidated Statement of Comprehensive Income over
the vesting period. Non-market vesting conditions are taken into
account by adjusting the number of equity instruments expected to
vest at each balance sheet date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of
awards that eventually vest. Market vesting conditions are factored
into the fair value of the awards granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of
whether the market vesting conditions are satisfied. The cumulative
expense is not adjusted for failure to achieve a market vesting
condition.
Where the terms and conditions of awards are modified before
they vest, the increase in the fair value of the awards, measured
immediately before and after the modification, is also charged to
the Consolidated Statement of Comprehensive Income over the
remaining vesting period.
Where shares already in existence have been given to employees
by shareholders, the fair value of the shares transferred is
charged to the Consolidated Statement of Comprehensive Income and
recognised in reserves as Contributed Equity.
Basis of consolidation
Where the Company has control over an investee, it is classified
as a subsidiary. The Company controls an investee if it has power
over the investee and it is exposed to variable returns from the
investee and it has the ability to use its power to affect those
variable returns. Control is reassessed whenever facts and
circumstances indicate that there may be a change in any of these
elements of control. The consolidated financial statements present
the results of the Company and its subsidiaries ("the Group") as if
they formed a single entity. Intercompany transactions and balances
between the Group companies are therefore eliminated in full.
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Group's equity.
Non-controlling interests consist of the non-controlling
shareholder's share of changes in equity. The non-controlling
interests' share of losses, where applicable, are attributed to the
non-controlling interests irrespective of whether the
non-controlling shareholders have a binding obligation and are able
to make an additional investment to cover the loss.
Business Combinations
Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the
sum of the acquisition-date fair values of assets transferred by
the Group, liabilities incurred by the Group to the former owners
of the acquiree and the equity interest issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are
recognised in profit or loss as incurred.
Trade and other receivables
Trade and other receivables are stated initially at fair value
and subsequently at amortised cost.
Financial instruments
The Group's financial assets consist of a bank current account
or short-term deposits at variable interest rates and other
receivables. Any interest earned is accrued and classified as
finance income.
The Group's financial liabilities consist of trade and other
payables. The trade and other payables are stated initially at fair
value and subsequently at amortised cost.
Joint arrangements
The group is a party to a joint arrangement when there is a
contractual arrangement that confers joint control over the
relevant activities of the arrangement to the group and at least
one other party. Joint control is assessed under the same
principles as control over subsidiaries.
The group classifies its interests in joint arrangements as
either:
- Joint ventures: where the group has rights to only the net
assets of the joint arrangement;
- Joint operations: where the group has both the rights to
assets and obligations for the liabilities of the joint
arrangement.
In assessing the classification of interests in joint
arrangements, the Group considers:
- The structure of the joint arrangement
- The legal form of joint arrangements structured through a
separate vehicle
- The contractual terms of the joint arrangement agreement
- Any other facts and circumstances (including any other
contractual arrangements).
Joint operations are those in which the Group has certain
contractual agreements with other participants to engage in joint
activities that do not create an entity carrying on a trade or
business on its own. The Group includes its share of assets,
liabilities and cash flows in joint arrangements, measured in
accordance with the terms of each arrangement, which is usually pro
rata to the Group's interest in the joint operations. The Group
conducts some of its gas exploration, development and production
activities jointly with other companies in this way.
Joint ventures are initially recognised in the consolidated
statement of financial position at cost as investments in joint
ventures. Subsequently, joint ventures are accounted for using the
equity method, where the Group's share of post-acquisition profits
and losses and other comprehensive income is recognised in the
consolidated statement of profit and loss and other comprehensive
income (except for losses in excess of the Group's investment in
the joint venture unless there is an obligation to make good those
losses). Where there is objective evidence that the investment in a
joint venture has been impaired the carrying amount of the
investment is tested for impairment in the same way as other
non-financial assets. The Group conducts some of its transitional
power and green hydrogen activities jointly with other companies in
this way.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on
historical experiences and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may deviate from
these estimates and assumptions. If these estimates and assumptions
are significantly over or under stated, this could cause a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year. The areas where this could impact the
Group are:
a) Areas of judgement
i. Recoverability of exploration and evaluation assets
Expenditure is capitalised as an intangible asset by reference
to appropriate geographic area and is assessed for impairment
against the criteria set out in IFRS 6 when management assesses
that circumstances suggest that the carrying amount may exceed its
recoverable value.
The making of this assessment involves judgement concerning the
Group's future plans and current technical and legal assessments.
In considering whether exploration and evaluation assets are
impaired, the Group considers various impairment indicators and
whether any of these indicates existence of an impairment. If those
indicators are met, a full impairment test is performed. At 31
December 2022 the Group considers that no formal indicators of
impairment exist under the framework of IFRS 6.
b) Estimates and assumptions
i. Impairment of goodwill
The assessment the carrying value of goodwill includes a number
of judgements and estimates exercised by management including
assessment of future discounted cash flows or fair value less costs
to sell.
When value in use calculations are undertaken, the Group
estimates the expected future cash flows from the asset and chooses
a suitable discount rate to calculate the present value of those
cash flows. In undertaking these value in use calculations, the
Group is required to make use of estimates and assumptions
concerning the Group's future plans.
When fair value less costs to sell calculations are undertaken,
the Group uses earnings multiples derived from observable market
data from recent transactions within the relevant sector.
At 31 December 2022 the Group has not identified an impairment
of goodwill.
ii. Fair value of investments in power projects
The assessment of the fair value of the investment in the
Essakane power project includes a number of judgements and
estimates exercised by management including assessment of future
discounted cash flows.
The Group estimates the expected future cash flows from the
asset and chooses a suitable discount rate to calculate the present
value of those cash flows. In undertaking this value in use
calculation, the Group is required to make use of estimates and
assumptions concerning the Essakane power project's future
production and cash flow.
3 Segmental analysis
The Group has three reportable segments being transitional gas,
transitional power and corporate costs. The operating results of
each of these segments are regularly reviewed by the Board of
Directors in order to make decisions about the allocation of
resources and assess their performance.
31 December 2022 Transitional Transitional Corporate Total
Gas Power
US$000 US$000 US$000 US$000
------------- ------------- ---------- ---------
Share based payments - (15) (4,153) (4,168)
------------- ------------- ---------- ---------
Hydrogen and other
business development costs - - (1,704) (1,704)
------------- ------------- ---------- ---------
Administrative expenses (516) (2,521) (5,441) (8,478)
------------- ------------- ---------- ---------
Finance income 12 - 62 74
------------- ------------- ---------- ---------
Finance expense - (70) (538) (608)
------------- ------------- ---------- ---------
Loss after taxation (504) (2,606) (11,774) (14,884)
------------- ------------- ---------- ---------
Additions to non-current
assets 20,290 366 21 20,677
------------- ------------- ---------- ---------
Total assets 54,158 1,474 11,982 67,614
------------- ------------- ---------- ---------
Total liabilities (5,227) (203) (1,129) (6,559)
------------- ------------- ---------- ---------
Net assets 48,931 1,271 10,853 61,055
------------- ------------- ---------- ---------
31 December 2021 Transitional Transitional Corporate Total
Gas Power
US$000 US$000 US$000 US$000
------------- ------------- ---------- ---------
Share based payments - (85) (675) (760)
------------- ------------- ---------- ---------
Hydrogen and other
business development costs - - (1,139) (1,139)
------------- ------------- ---------- ---------
Administrative expenses (553) (212) (3,784) (4,549)
------------- ------------- ---------- ---------
Finance expense (31) (9) (472) (512)
------------- ------------- ---------- ---------
Loss after taxation (584) (306) (6,070) (6,960)
------------- ------------- ---------- ---------
Additions to non-current
assets 18,928 - 72 19,000
------------- ------------- ---------- ---------
Total assets 34,687 973 19,088 54,748
------------- ------------- ---------- ---------
Total liabilities (14,384) (158) (1,246) (15,788)
------------- ------------- ---------- ---------
Net assets 20,303 815 17,842 38,960
------------- ------------- ---------- ---------
4 Loss from operations
31 December 31 December
2022 2021
US$000 US$000
------------ ------------
Loss from operations is stated after
charging:
------------ ------------
Depreciation of property, plant and equipment 45 31
------------ ------------
Depreciation of Right of Use asset 427 327
------------ ------------
Share based payments - Long Term Incentive
Scheme 3,661 533
------------ ------------
Share based payments - Restricted Share
Unit Scheme 492 142
------------ ------------
Share based payments - deferred consideration 15 85
------------ ------------
Share of post-tax losses of joint venture 14 -
------------ ------------
Auditors' remuneration:
------------ ------------
Fees payable to the Company's Auditors
for the audit of the Company's annual
accounts 108 84
------------ ------------
Audit of the Company's subsidiaries pursuant
to legislation 17 17
------------ ------------
Total payable 125 101
------------ ------------
5 Employment costs
Employees 31 December 31 December
2022 2021
US$000 US$000
------------ ------------
Wages and salaries 3,863 1,095
------------ ------------
Pension costs 413 62
------------ ------------
Share based payments 2,141 170
------------ ------------
Sub-total 6,417 1,327
------------ ------------
Capitalised to exploration costs (2,189) (656)
------------ ------------
Total 4,228 671
------------ ------------
Key management personnel 31 December 31 December
2022 2021
US$000 US$000
------------ ------------
Wages, salaries and fees 2,481 1,574
------------ ------------
Social security costs 304 199
------------ ------------
Pension costs 52 46
------------ ------------
Benefits 9 6
------------ ------------
Share based payments 2,027 505
------------ ------------
Sub-total 4,873 2,330
------------ ------------
Capitalised to exploration costs (827) (365)
------------ ------------
Total 4,046 1,965
------------ ------------
The Directors are the key management personnel of the Group.
Details of the Directors' emoluments and interest in shares are
shown in the Directors' Remuneration Report.
6 Finance income and expense
Finance income 31 December 31 December
2022 2021
US$000 US$000
------------ ------------
Foreign exchange gain 9 -
------------ ------------
Bank interest receivable 65 -
------------ ------------
Total 74 -
------------ ------------
Finance expense 31 December 31 December
2022 2021
US$000 US$000
------------ ------------
Foreign exchange loss 581 466
------------ ------------
Finance expense on lease 27 46
------------ ------------
Total 608 512
------------ ------------
7 Investments
The Company's principal subsidiary undertakings at 31 December
2022 and 31 December 2021, excluding dormant entities, were:
Subsidiary undertaking Principal activity Country Proportion Non-controlling
of incorporation of ownership interest ownership
at 31 December at 31 December
2022 2021 2022 2021
--------------------------------------------------------------------- -------- -------- ---------- ----------
Chariot Oil & Gas
Investments (Namibia)
Limited Holding company Guernsey 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Chariot Oil & Gas
Investments (Morocco) Oil and gas
Limited exploration Guernsey 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Chariot Oil and
Gas Statistics
Limited Service company UK 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Enigma Oil & Gas
Exploration (Proprietary) Oil and gas
Limited(1) exploration Namibia 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Chariot Oil & Gas
Investments (Brazil)
Limited Holding company Guernsey 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Chariot Brasil
Petroleo e Gas Oil and gas
Ltda exploration Brazil 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Chariot Oil & Gas
Finance (Brazil)
Limited(1) Service company Guernsey 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Chariot Oil & Gas
Holdings (Morocco) Oil and gas
Limited exploration UK 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Chariot Rissana Oil and gas
Limited exploration UK 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Holding company
Chariot Transitional and renewable
Power Limited energy solutions UK 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Chariot Transitional
Power Holdings
Limited (1,2) Holding company UK 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Chariot Transitional
Power France (formerly
AEMP Essakane Solar
SAS)(1) Holding company France 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Chariot Transitional
Power Africa (formerly
Africa Energy Management Renewable energy
Platform)(1,) solutions Mauritius 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
Chariot Transitional
Power South Africa Renewable energy
(Pty) Ltd (1) solutions South Africa 100% 50% - -
-------------------- ------------------- -------- -------- ---------- ----------
Oasis Water Limited Renewable energy
(1,2) solutions Mauritius 70% n/a 30% -
-------------------- ------------------- -------- -------- ---------- ----------
Quantum Solar Limited
(1,2) Holding company UK 100% 100% - -
-------------------- ------------------- -------- -------- ---------- ----------
(1) Indirect shareholding of the Company.
(2) Incorporated in 2022.
8 Taxation
The Company is tax resident in the UK, however no tax charge
arises due to taxable losses for the year (31 December 2021:
US$Nil).
No taxation charge arises in Morocco or the group subsidiaries
as they have recorded taxable losses for the year.
There was no deferred tax charge or credit in either period
presented.
Factors affecting the tax charge for the current year
The reasons for the difference between the actual tax charge for
the year and the standard rate of corporation tax in the UK applied
to losses for the year are as follows:
31 December 31 December
2022 2021
US$000 US$000
------------ ------------
Tax reconciliation
------------ ------------
Loss on ordinary activities for the
year before tax (14,884) (6,960)
------------ ------------
Loss on ordinary activities at the
standard rate of corporation tax in
the UK of 19% (31 December 2021: 19%) (2,828) (1,322)
------------ ------------
Non-deductible expenses 881 212
------------ ------------
Deferred tax effect not recognised 1,947 1,110
------------ ------------
Total taxation charge - -
------------ ------------
The Company had tax losses carried forward on which no deferred
tax asset is recognised. Deferred tax not recognised in respect of
losses carried forward total US$10.6 million (31 December 2021:
US$8.7 million). Deferred tax assets were not recognised as there
is uncertainty regarding the timing of future profits against which
these assets could be utilised.
9 Loss per share
The calculation of basic loss per Ordinary share attributable to
the equity holders of the parent is based on a loss of
US$14,882,000 (31 December 2021: loss of US$6,960,000) and on
891,215,431 Ordinary shares (31 December 2021: 519,854,783) being
the weighted average number of Ordinary shares in issue during the
year. Potentially dilutive share awards are detailed in note 26,
however these do not have any dilutive impact as the Group reported
a loss for the year, consequently a separate diluted loss per share
has not been presented.
10 Exploration and evaluation assets
31 December 2022 31 December 2021
US$000 US$000
----------------- -----------------
Net book value brought forward 31,750 12,822
----------------- -----------------
Additions 20,286 18,928
----------------- -----------------
Transferred to inventory (241) -
----------------- -----------------
Net book value carried forward 51,795 31,750
----------------- -----------------
During the year certain wellheads and casing items previously
capitalised within exploration and evaluation assets were
transferred to inventory as their condition allows them to be
reused in future drilling campaigns.
As at 31 December 2022 the net book value of the Moroccan
geographic area is US$51.8 million (31 December 2021: US$31.8
million).
11 Goodwill
Goodwill
US$000
---------
Gross carrying amount at 31 Dec 2020 -
---------
Acquired through business combination 380
---------
Balance at 31 Dec 2021 380
---------
Balance at 31 Dec 2022 380
---------
The goodwill solely relates to the acquisition of Africa Energy
Management Platform in 2021 and reflects the intellectual property,
management team and customer relationships acquired through the
business combination now contained in the Transitional Power
segment.
The Group tests cash-generating units with goodwill annually for
impairment, or more frequently if there is an indication that a
cash-generating unit to which goodwill has been allocated may be
impaired. The recoverable amount of a cash generating unit is the
higher of the cash-generating unit's fair value less cost of
disposal and its value-in-use .
Fair value less cost of disposal has been used to assess the
recoverable amount of the Group's goodwill. Fair value less cost of
disposal is determined using earnings multiples derived from
observable market data from recent transactions within the solar
and wind sector. The fair value measurement is categorised as a
level 2 fair value based on the inputs in the valuation techniques
used.
12 Investment in power projects
31 December 2022 31 December 2021
US$000 US$000
----------------- -----------------
-
----------------- -----------------
Essakane power project 448 450
----------------- -----------------
The Group's investment in power projects represents its 10%
project equity holding in the Essakane power project. The
investment is fair valued at each reporting date and has been
classified within level 3 of the hierarchy (as defined in IFRS 13)
as the investment is not traded and contains unobservable inputs.
Due to the nature of the investment, it is always expected to be
classified as level 3. There have been no transfers between levels
during the year ended 31 December 2022.
Valuations are derived using a discounted cash flow methodology
and reflect the annual forecast shareholder distributions resulting
from net available cash of the Essakane power project, and a risk
adjusted discount rate.
Significant unobservable input Sensitivity of the fair value measurement to input
Discount rate An increase in the discount rate would decrease the fair value and a decrease in the
discount
rate would increase the fair value of the asset.
-------------------------------------------------------------------------------------
Shareholder distributions An increase in the forecast shareholder distributions would increase the fair value
and a
decrease in the forecast shareholder distributions would decrease the fair value of
the asset.
-------------------------------------------------------------------------------------
The sensitivities above are assumed to be independent of each
other. There were no changes to valuation techniques in the
period.
13 Non-controlling interests
Oasis Water Limited, a 70% owned subsidiary of the Group, has
immaterial non-controlling interests (NCI). Summarised financial
information in relation to Oasis Water Limited, before intra-group
eliminations, is presented below together with amounts attributable
to NCI:
For the period ended 31 December 31 December 2022
US$000
-----------------
Administrative expenses (6)
-----------------
Loss before and after tax (6)
-----------------
Loss allocated to NCI (2)
-----------------
Other comprehensive income allocated to NCI -
-----------------
Total comprehensive income allocated to NCI (2)
-----------------
Cash inflows from operating activities 216
-----------------
Cash outflows from investing activities (215)
-----------------
Net cash inflows 1
-----------------
As at 31 December
-----------------
Assets
-----------------
Property plant and equipment 348
-----------------
Trade and other receivables 1
-----------------
Cash and cash equivalents 1
-----------------
Liabilities
-----------------
Trade and other payables (355)
-----------------
Accumulated non-controlling interests (5)
-----------------
14 Joint Ventures
The Group has a 24.99% interest in, Etana Energy (Pty) Limited,
which is a separate structured vehicle incorporated and operating
in South Africa. The primary activity of Etana Energy (Pty) Limited
is to hold an electricity trading licence. The contractual
arrangement provides the group with only the rights to the net
assets of the joint arrangement, with the rights to the assets and
obligation for liabilities of the joint arrangement resting
primarily with Etana Energy (Pty) Limited. Under IFRS 11 this joint
arrangement is classified as a joint venture and has been included
in the consolidated financial statements using the equity
method.
Summarised financial information
Period ended 31 December 2022
US$000
-----------
Loss from continuing operations (57)
-----------
Other comprehensive income -
-----------
Total comprehensive income (100%) (57)
-----------
Group's share of comprehensive income (24.99%) (14)
-----------
Investments in equity-accounted joint ventures
-----------
Opening balance -
-----------
Shareholder loan to Etana in the year 19
-----------
Group's share of comprehensive income for the year (included in administrative expenses) (14)
-----------
Closing balance 5
-----------
15 Property, plant and equipment
Fixtures, Assets in Total
fittings the course
and equipment of construction
US$000 US$000 US$000
--------------- ----------------- -------
Cost
--------------- ----------------- -------
At 1 January 2021 1,356 - 1,356
--------------- ----------------- -------
Additions 72 - 72
--------------- ----------------- -------
At 31 December 2021 1,428 - 1,428
--------------- ----------------- -------
At 1 January 2022 1,428 - 1,428
--------------- ----------------- -------
Additions 40 349 389
--------------- ----------------- -------
At 31 December 2022 1,468 349 1,817
--------------- ----------------- -------
Depreciation
--------------- ----------------- -------
At 1 January 2021 1,313 - 1,313
--------------- ----------------- -------
Charge 31 - 31
--------------- ----------------- -------
At 31 December 2021 1,344 - 1,344
--------------- ----------------- -------
At 1 January 2022 1,344 - 1,344
--------------- ----------------- -------
Charge 45 - 45
--------------- ----------------- -------
At 31 December 2022 1,389 - 1,389
--------------- ----------------- -------
Net book value 1 January 2021 43 - 43
--------------- ----------------- -------
Net book value 31 December 2021 84 - 84
--------------- ----------------- -------
Net book value 31 December 2022 79 349 428
--------------- ----------------- -------
The net book value of assets under construction relates to the
construction of a desalination plant in Djibouti by a subsidiary of
the group, Oasis Water Limited whose results are reported within
the Transitional Power segment. The cost of the plant will be
depreciated once the construction is complete and available for
use. The estimated cost to completion of the plant to which the
Group is contractually committed, is US$246,000.
16 Trade and other receivables
31 December 31 December
2022 2021
US$000 US$000
------------ ------------
Other receivables and prepayments 755 1,167
------------ ------------
The fair value of trade and other receivables is equal to their
book value.
17 Inventory
31 December 31 December
2022 2021
US$000 US$000
------------ ------------
Wellheads and casing 1,424 1,183
------------ ------------
Inventory is held and retained for use in future drilling
campaigns.
18 Cash and cash equivalents
31 December 31 December
2022 2021
Analysis by currency US$000 US$000
------------ ------------
US Dollar 5,475 15,567
------------ ------------
Euro 209 135
------------ ------------
Sterling 6,254 3,130
------------ ------------
Moroccan Dirham 51 538
------------ ------------
Other 63 36
------------ ------------
12,052 19,406
------------ ------------
As at 31 December 2022 and 31 December 2021 the US Dollar and
Sterling cash is held in UK and Guernsey bank accounts. All other
cash balances are held in the relevant country of operation.
As at 31 December 2022, the cash balance of US$12.1 million (31
December 2021: US$19.4 million) contains the following cash
deposits that are secured against bank guarantees given in respect
of exploration work to be carried out:
31 December 31 December
2022 2021
US$000 US$000
------------ ------------
Moroccan licences 750 5,350
------------ ------------
750 5,350
------------ ------------
The funds are freely transferable but alternative collateral
would need to be put in place to replace the cash security.
19 Leases
The lease relates to the UK office. The group renegotiated the
contractual terms of the lease during the year which increased the
lease term by one year. The lease liability was remeasured using
the discount rate applicable on the modification date, with the
right-of-use asset being adjusted by the same amount.
Right-of-use asset:
31 December 2022 31 December 2021
US$000 US$000
----------------- -----------------
Brought forward 328 655
----------------- -----------------
Effect of modification to lease terms 431 -
----------------- -----------------
Depreciation (427) (327)
----------------- -----------------
Carried forward 332 328
----------------- -----------------
Lease liability:
31 December 2022 31 December 2021
US$000 US$000
----------------- -----------------
Current 359 430
----------------- -----------------
Non-current - -
----------------- -----------------
Total lease liability 359 430
----------------- -----------------
The interest expense on lease liabilities during the year to 31
December 2022 was US$27,000 (2021: US$46,000) and the total cash
outflow was US$501,000 (2021: US$419,000).
The maturity analysis of the lease liability at 31 December 2022
is as follows:
31 December 2022 31 December 2021
US$000 US$000
----------------- -----------------
Maturity analysis - contractual undiscounted cash flows
----------------- -----------------
Less than one year 372 453
----------------- -----------------
Total undiscounted lease liabilities 372 453
----------------- -----------------
Effect of interest (13) (23)
----------------- -----------------
Total lease liability 359 430
----------------- -----------------
20 Trade and other payables
31 December 31 December
2022 2021
US$000 US$000
------------ ------------
Trade payables 2,264 9,470
------------ ------------
Accruals 3,934 5,888
------------ ------------
6,198 15,358
------------ ------------
The fair value of trade and other payables is equal to their
book value.
21 Share capital
Allotted, called up and fully paid
31 December 31 December 31 December 31 December
2022 2022 2021 2021
------------ ------------ ------------ ------------
Number US$000 Number US$000
------------ ------------ ------------ ------------
Ordinary
shares of
1p each(1) 959,841,091 14,263 759,587,023 11,696
------------ ------------ ------------ ------------
1. The authorised and initially allotted and issued share
capital on admission (19 May 2008) has been translated at the
historic rate of US$GBP of 1.995. The shares issued since admission
have been translated at the date of issue, or, in the case of share
awards, the date of grant and not subsequently retranslated.
Details of the Ordinary shares issued are in the table
below:
Date Description Price No. of shares
US$
31 December
2020 388,367,946
------ --------------
Issue of initial consideration
25 June 2021 shares for acquisition of AEMP 0.07 9,196,926
-------------------------------------- ------ --------------
Issue of shares at GBP0.055 in
Placing, Subscription, Open Offer
25 June 2021 and fees 0.08 238,512,856
-------------------------------------- ------ --------------
Issue of shares at GBP0.055 in
Placing, Subscription, Open Offer
19 July 2021 and fees 0.08 645,351
-------------------------------------- ------ --------------
15 December Issue of shares at GBP0.07 in
2021 Placing, Subscription and fees 0.09 101,639,842
-------------------------------------- ------ --------------
22 December Issue of shares at GBP0.07 in
2021 Open Offer 0.09 21,224,102
-------------------------------------- ------ --------------
31 December
2021 759,587,023
------ --------------
Issue of shares at GBP0.055 relating
31 January 2022 to underwriting commitment 0.07 33,742,396
-------------------------------------- ------ --------------
Issue of shares at GBP0.055 relating
3 March 2022 to underwriting commitment 0.07 33,742,396
-------------------------------------- ------ --------------
Issue of shares at GBP0.18 in
Placing, Subscription, Open Offer
13 June 2022 and fees 0.22 130,930,606
-------------------------------------- ------ --------------
10 August 2022 Issue of share award 0.08 833,333
-------------------------------------- ------ --------------
10 August 2022 Issue of share award 0.30 18,533
-------------------------------------- ------ --------------
10 August 2022 Issue of share award 0.30 212,000
-------------------------------------- ------ --------------
10 August 2022 Issue of share award 0.10 72,463
-------------------------------------- ------ --------------
10 August 2022 Issue of share award 0.16 109,795
-------------------------------------- ------ --------------
15 September
2022 Issue of share award 0.50 70,098
-------------------------------------- ------ --------------
15 September
2022 Issue of share award 0.12 76,313
-------------------------------------- ------ --------------
15 September
2022 Issue of share award 0.20 76,313
-------------------------------------- ------ --------------
15 September
2022 Issue of share award 0.05 119,438
-------------------------------------- ------ --------------
15 September
2022 Issue of share award 0.23 137,050
-------------------------------------- ------ --------------
21 October 2022 Issue of share award 0.12 13,750
-------------------------------------- ------ --------------
21 October 2022 Issue of share award 0.20 11,250
-------------------------------------- ------ --------------
21 October 2022 Issue of share award 0.19 9,343
-------------------------------------- ------ --------------
12 December
2022 Issue of share award 0.20 16,250
-------------------------------------- ------ --------------
12 December
2022 Issue of share award 0.05 43,750
-------------------------------------- ------ --------------
12 December
2022 Issue of share award 0.21 18,991
-------------------------------------- ------ --------------
31 December
2022 959,841,091
------ --------------
22 Other components of equity
The details of other components of equity are as follows:
Shares to be issued Foreign exchange reserve
Contributed equity reserve
Total
US$000 US$000 US$000 US$000
--------------------------- --------------------- --------------------------- --------------------------- --------
As at 1 January 2022 796 142 - 938
Loss for the year - - - -
Other comprehensive income - - (3) (3)
--------------------------- --------------------- --------------------------- --------------------------- --------
Loss and total
comprehensive loss for
the year - - (3) (3)
As at 31 December 2022 796 142 (3) 935
--------------------------- --------------------- --------------------------- --------------------------- --------
Shares to be issued Foreign exchange reserve
Contributed equity reserve
Total
US$000 US$000 US$000 US$000
--------------------------- --------------------- --------------------------- --------------------------- --------
As at 1 January 2021 796 - - 796
Loss for the year - - - -
Other comprehensive income - - - -
--------------------------- --------------------- --------------------------- --------------------------- --------
Loss and total - - - -
comprehensive loss for the
year
Share based deferred
consideration - 142 - 142
As at 31 December 2021 796 142 - 938
--------------------------- --------------------- --------------------------- --------------------------- --------
23 Reserves
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share capital Amount subscribed for share capital at nominal
value.
----------------------------------------------------
Share premium Amount subscribed for share capital in excess
of nominal value.
----------------------------------------------------
Share based payments Amount representing the cumulative charge
reserve recognised under IFRS2 in respect of share
option, LTIP and RSU schemes.
----------------------------------------------------
Contributed equity Amount representing equity contributed by
the shareholders
----------------------------------------------------
Shares to be issued Deferred consideration on acquisition recognised
reserve in equity
----------------------------------------------------
Foreign exchange Foreign exchange differences arising on translating
reserve into the reporting currency
----------------------------------------------------
Retained deficit Cumulative net gains and losses recognised
in the financial statements.
----------------------------------------------------
24 Related party transactions
Key management personnel comprises the Directors and details of
their remuneration and shareholding reflecting participation in
recent equity placements are set out in note 5 and the Directors'
Remuneration Report.
Magna Capital LDA (of which Adonis Pouroulis, CEO, has a
substantial interest), underwrote the June 2021 equity fundraising
to ensure the total fundraising equated to approximately US$23
million. Accordingly, 33,742,396 new Ordinary shares were admitted
on 31 January 2022 and 33,742,396 new Ordinary shares were admitted
on 3 March 2022 and the Company received proceeds totalling US$5
million. The underwriting commitment constitutes a related party
transaction.
Kinsella Consulting Limited, a company of which Adonis Pouroulis
is a Director, incurred costs on behalf of Chariot Limited for
which it was reimbursed during the year of US$18,452 (31 December
2021: US$8,813). The amount outstanding as at 31 December 2022 was
US$Nil (31 December 2021: US$Nil).
Together with Total Eren, the Group entered into a Memorandum of
Understanding with Karo Holdings Limited to work together on the
development, financing, construction, and operation of a solar
photovoltaic project for the Karo Platinum Project, in Zimbabwe.
Adonis Pouroulis, CEO, has a substantial interest in the total
voting rights in Karo Mining Holdings Limited. No transactions have
occurred between Karo Holdings Limited and the Group during the
period.
Together with Total Eren, the Group entered into a Memorandum of
Understanding with Tharisa plc to work together on the development,
financing, construction, and operation of a solar photovoltaic
project for the Tharisa mine, in South Africa. Adonis Pouroulis,
CEO, has a substantial interest in the total voting rights in
Tharisa plc. No transactions have occurred between Tharisa plc and
the Group during the period.
25 Financial instruments
The Board of Directors determine, as required, the degree to
which it is appropriate to use financial instruments or other
hedging contracts or techniques to mitigate risk. Throughout the
year ending 31 December 2022, no trading in financial instruments
was undertaken (31 December 2021: US$Nil). There is no material
difference between the book value and fair value of the Group cash
balances, short-term receivables and payables.
Market risk
Market risk arises from the Group's use of interest bearing and
foreign currency financial instruments. It is the risk that future
cash flows of a financial instrument will fluctuate because of
changes in interest rates (interest rate risk) and foreign exchange
rates (currency risk). Throughout the year, the Group has held
surplus funds on deposit, principally with its main relationship
bank Barclays, on fixed short-term deposits. The credit ratings of
the main relationship bank the Group holds cash with do not fall
below A or equivalent. The Group does not undertake any form of
speculation on long term interest rates or currency movements,
therefore it manages market risk by maintaining a short-term
investment horizon and placing funds on deposit to optimise short
term yields where possible but, moreover, to ensure that it always
has sufficient cash resources to meet payables and other working
capital requirements when necessary. As such, market risk is not
viewed as a significant risk to the Group. The Directors have not
disclosed the impact of interest rate sensitivity analysis on the
Group's financial assets and liabilities at the year-end as the
risk is not deemed to be material.
This transactional risk is managed by the Group holding the
majority of its funds in US Dollars to recognise that US Dollars is
the trading currency of the industry, with an appropriate balance
maintained in Sterling, Euro and Moroccan Dirham to meet other
non-US Dollar industry costs and ongoing corporate and overhead
commitments.
At the year end, the Group had cash balances of US$12.1 million
(31 December 2021: US$19.4 million) as detailed in note 18.
Other than the non-US Dollar cash balances described in note 18,
no other material financial instrument is denominated in a currency
other than US Dollars. A 10% adverse movement in exchange rates
would lead to a foreign exchange loss of US$658,000 and a 10%
favourable movement in exchange rates would lead to a corresponding
gain; the effect on net assets would be the same as the effect on
profits (31 December 2021: US$380,000).
Capital
In managing its capital, the Group's primary objective is to
maintain a sufficient funding base to enable it to meet its working
capital and strategic investment needs. For further details of the
Group's position, please refer to the going concern paragraph in
note 2 of these accounts.
Liquidity risk
The Group's practice is to regularly review cash needs and to
place excess funds on fixed term deposits. This process enables the
Group to optimise the yield on its cash resources whilst ensuring
that it always has sufficient liquidity to meet payables and other
working capital requirements when these become due.
For further details of the Group's position, please refer to the
going concern paragraph in note 2 of these accounts.
Credit risk
The Group's policy is to perform appropriate due diligence on
any party with whom it intends to enter into a contractual
arrangement. Where this involves credit risk, the Group will put in
place measures that it has assessed as prudent to mitigate the risk
of default by the other party. This could consist of instruments
such as bank guarantees and parent company guarantees.
As such, the Group has not put in place any particular credit
risk measures in this instance as the Directors view the risk of
default on any payments due from the joint venture partner as being
very low.
26 Share based payments
Long Term Incentive Scheme ("LTIP")
The plan provides for the awarding of shares to employees and
Directors for nil consideration. The award will lapse if an
employee or Director leaves employment.
Shares granted when an individual is an employee will vest in
equal instalments over a three year period from the grant date and
shares granted when an individual is a Director or otherwise
specified will vest three years from the end of the year or period
the period to which the award relates.
The Group recognised a charge under the plan for the year to 31
December 2022 of US$3,661,000 (31 December 2021: US$533,000).
The following table sets out details of all outstanding share
awards under the LTIP:
31 December 2022 31 December
2021
Number of awards Number of awards
----------------- -----------------
Outstanding at beginning of the
year 28,242,865 7,401,780
----------------- -----------------
Granted during the year 40,888,091 20,841,085
----------------- -----------------
Shares issued for no consideration (592,546) -
during the year
----------------- -----------------
Outstanding at the end of the
year 68,538,410 28,242,865
----------------- -----------------
Exercisable at the end of the
year 14,754,985 7,379,562
----------------- -----------------
Non-Executive Directors' Restricted Share Unit Scheme
("RSU")
The plan provides for the awarding of shares to Non-Executive
Directors for nil consideration. An award can be Standalone or
Matching.
Standalone share awards are one-off awards to Non-Executive
Directors which will vest in equal instalments over a three year
period and will lapse if not exercised within a fixed period on
stepping down from the Board.
Matching share awards will be granted equal to the number of
existing Chariot shares purchased by the Non-Executive Director in
each calendar year capped at the value of their gross annual fees
for that year. The shares will vest in equal instalments over a
three year period and will lapse if not exercised prior to stepping
down from the Board or if the original purchased shares are sold
prior to the vesting of the relevant Matching award. Any potential
Matching awards not granted in a calendar year shall be forfeited
and shall not roll over to subsequent years.
The Group recognised a charge under the plan for the year to 31
December 2022 of US$492,000 (31 December 2021: US$142,000).
The following table sets out details of all outstanding share
awards under the RSU:
31 December 31 December
2022 2021
Number of awards Number of awards
----------------- -----------------
Outstanding at beginning of the
year 8,755,156 2,839,875
----------------- -----------------
Granted during the year 3,528,248 5,915,281
----------------- -----------------
Shares issued for no consideration
during the year (1,246,124)
----------------- -----------------
Outstanding at the end of the
year 11,037,280 8,755,156
----------------- -----------------
Exercisable at the end of the
year 4,251,485 2,623,568
----------------- -----------------
Post-acquisition share-based payment charge
As at 31 December 2022 contingent payments representing a
maximum of 3,964,192 new ordinary shares are payable to key members
of the Chariot Transitional Power Africa team regarding the
acquisition of the business of Africa Energy Management Platform in
June 2021. These payments are dependent on the retention of the key
team members and certain project pipeline targets being met and
have been recognised as share based payments in the Consolidated
Statement of Comprehensive Income over the retention period. The
Group recognised a charge of US$15,000 in the year to 31 December
2022 (31 December 2021: $85,000). On 17 April 2023 a portion of the
contingent consideration was paid which was settled through the
issue of 1,585,678 new ordinary shares.
27 Contingent liabilities
From 30 December 2011 the Namibian tax authorities introduced a
withholding tax of 25% on all services provided by non-Namibian
entities which are received and paid for by Namibian residents.
From 30 December 2015 the withholding tax was reduced to 10%. As at
31 December 2022, based upon independent legal and tax opinions,
the Group has no withholding tax liability (31 December 2021:
US$Nil). Any subsequent exposure to Namibian withholding tax will
be determined by how the relevant legislation evolves in the future
and the contracting strategy of the Group.
28 Events after the balance sheet date
The Directors consider these events to be non-adjusting post
balance sheet events.
Acquisition of Renewable Water Production Business
On 27 January 2023 Chariot Limited entered into a sales
agreement for the acquisition of the business and assets of an
independent water producer, ENEO Water PTE Limited, an African
company focused on delivering clean water solutions using renewable
energy.
Consideration for the acquisition shall be payable in Chariot
Ordinary Shares with an initial US$0.5 million paid on completion
of the sales agreement (representing 2,267,694 shares issued on 24
February 2023) and a further deferred consideration of up to US$0.5
million payable (representing a maximum of 2,267,694 shares) on the
achievement of financial close on further projects.
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END
FR SELEFSEDSESM
(END) Dow Jones Newswires
June 21, 2023 02:00 ET (06:00 GMT)
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