Chariot Oil & Gas drops after abandoning Namibian well

LONDON (ShareCast) - Chariot Oil & Gas shares plunged Tuesday after the company plugged and abandoned a well in Namibia and reported a 39.2 per cent fall in its cash balance.

Shares fell 18.33% to 24.50p at 08:00 as the group announced its Tapir South-1 well in the north of Nambia produced no commercial hydrocarbons so was abandoned.

The group has identified 19 new targets across 13 prospect areas in central Namibia and plans to begin drilling at new licences in Mauritania and Morocco in 2015 and 2016 respectively.

"In acquiring our licences in Mauritania and Morocco last year, we demonstrated our ability to secure early access to further quality acreage in areas that are receiving increasing interest from the oil and gas industry," Chief Executive Officer, Larry Bottomley, said.

"We will continue to pursue new venture activities as this is an important ongoing value creation catalyst for our business."

The oil and gas explorer said its cash balance was $68.3m at December 31st, down from $112m at the end of June, as a result of $36.5m expenditure on Nambian drilling and seismic activities, $2.4 on Mauritanian and Moroccan geological and geophysical (G&G) and general and administrative (G&A.

The company also incurred $5.2m on other G&G and G&A costs.

Operations across ventures in Namibia, Mauritania and Morocco were also pending evaluation results.

"Whilst this operational review has led to a revised timetable on our prospective drilling, this approach will help to further de-risk the drilling targets we ultimately select," Bottomley added.

"We believe all our assets have the potential for giant discoveries, we have a focused strategy and we are committed to realising the value in the portfolio."