Caracal Energy builds big plans on small oil fields in Chad

LONDON (Reuters) - Caracal Energy, a newcomer to the London market, sees potential for steep growth in its oil output in the next five years as it develops fields in Chad that major companies view as too small to exploit. The company, which is days away from starting to pump its first oil from a field in the central African country, hopes to start producing from a second field by the end of the year when it aims to have output of 20,000-23,000 barrels per day (bpd). While big oil and gas finds in African countries such as Mozambique and Kenya have been grabbing headlines, Caracal has acquired three licences with six existing opportunities in Chad that are unwanted by major companies such as Exxon Mobil.. It also plans exploration of its own. Chief Executive Gary Guidry said this strategy of developing existing discoveries and adding new finds could within five years lift Caracal's production to 100,000 bpd or more, similar to the current level of Tullow Oil, one of the biggest Africa-focused independent oil firms listed in London. Output is expected to reach 36,000 bpd by the end of 2014, Guidry said in an interview on Thursday. An export pipeline runs southwest from landlocked Chad to Cameroon on the coast and currently carries around 100,000 bpd pumped by the owners Exxon and its partner, Malaysia's Petronas. "We see today that there's about 125,000 bpd spare capacity in this pipeline, and we believe that with modest estimates of what the exploration potential looks like, and the six undeveloped fields, our vision is that we can fill that pipeline up," Guidry said. Calgary-based Caracal, whose partner in the Chad licences is commodity trading giant Glencore Xstrata, joined London's main market in July, abandoning plans to raise $150 million due to difficult market conditions. It could seek to raise $150 million of new funds within the next 12 months, Guidry said, adding that both equity and debt options were being considered. The funds would be used to accelerate Caracal's exploration plans in Chad, the only country where it is currently active. The company, formerly known as Griffiths Energy International after founder Bradley Griffiths, has a market capitalisation of around 520 million pounds. The family trust of Griffiths, who died in a boating accident in 2011, is one of its biggest shareholders.