Chariot Oil & Gas Ltd. (AIM: CHAR) reports that the farm-out agreement signed between its wholly owned subsidiary, Chariot Oil & Gas Investments (Morocco) Ltd., and a wholly owned subsidiary of Woodside Petroleum Ltd. has been approved for the Rabat Deep Offshore permits I-VI by the Moroccan authorities.
As part of the farm-out agreement, Woodside committed to pay 100% of the 3D seismic acquisition and processing costs incurred across the license by Chariot, along with other back costs. Woodside also agreed to carry Chariot on future work up to an agreed cap, including a multi-beam side-scan sonar and seabed coring survey.
A substantial part of these funds has now been received, and, as a result, Chariot now expects its cash balance as of Dec. 31 to be US$52 million. The remaining balance of these funds is anticipated to be received during the first quarter of 2015, which is when the multi-beam side-scan sonar and seabed coring survey is expected to take place.
Chariot remains operator of the license with a 50% equity interest. The Office National des Hydrocarbures et des Mines (ONHYM) retains a 25% carried interest, and Woodside holds 25%. As part of the agreement, Woodside has an option to acquire a further 25% of Chariot’s equity and to become operator of the license in return for a full well carry up to an agreed cap consistent with other farm-outs concluded in the area.