The appraisal well has come up trumps says FinnCap, which has hiked its price target.
Jonathan Wright, analyst at FinnCap, in a note, called it excellent news which has seen the company’s transformational gas strategy “come good at the first time of asking”.
“The Anchois-2 appraisal/exploration well on the Lixus licence, offshore Morocco, has come up trumps, significantly exceeding expectations with multiple high-quality gas reservoirs encountered.
“Further analysis will be needed to fully understand the positive implications of the well on the gas resources of the expanded Anchois field and its development scale.
“However, even without fully de-risking the Anchois deep discoveries or raising resource estimates, and still giving zero value for the significant number of similar prospects identified on the licence.”
As a result, FinnCap has hiked its prior price target. At 54p the broker’s new target suggests more than 400% upside to the current price of 10.05p.
“This well result transforms Chariot’s Moroccan gas ambitions and sets it firmly on a path to becoming a strategically important transitional gas producer,” Wright said.
Peel Hunt analyst Werner Riding, meanwhile, echoed the sentiments – similarly calling it a “potentially transformational well result” that confirms a new commercial development and de-risked further substantial exploration upside.
“In addition to the positive appraisal outcome, several exploration targets also yielded new discoveries, with gas encountered in various separate, high-quality reservoirs,” Riding said.
“The Anchois-2 well has therefore exceeded pre-drill expectations, with further analysis likely to confirm an increased estimate of recoverable resources.”
Anchois-2 was drilled to a total depth of 2,512 metres and encountered significant gas accumulations with the appraisal target, Sand B, marking some 50 metres of net pay across two stacked reservoirs – the uppermost was the reservoir seen in the original discovery well.
The well saw exploration success with three targets – Sands C, M and O – representing 250 metres of gross pay, exceeding expectations. All reservoirs were described as high quality.
It will now be suspended for potential completion as a production well in the development of the field, subsequently, the Stena Don rig will move to the Anchois-1 gas discovery well which will be re-entered to assess the integrity of the previously drilled well. It potentially allows it to be included in the development of the field.
Chariot chief executive, Adonis Pouroulis, in this morning’s statement told investors that the result had materially exceeded expectations.
“We continue to conduct further analysis on the data collected from the well, but as it stands, we believe the result is transformational for the company.”
Pouroulis added: “With the recently announced key terms of gas offtake with a prominent international energy group, interest from two highly regarded institutional lenders to provide debt finance, an ongoing collaboration with a leading constructor of offshore gas projects and now this successful gas well result, the Anchois project is getting closer to helping provide a clean transitional fuel to support Morocco’s industrial and economic growth.”
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