Chariot moves into next phase of exploration offshore Namibia

Source: Chariot Oil & Gas

Through a subsidiary Chariot Oil & Gas Limited (LON: CHAR) has received formal approval from the Ministry of Mines and Energy in Namibia to enter the First Renewal Phase for its Northern Blocks, 1811 A&B, and Southern Block, 2714 B, offshore Namibia. The First Renewal Phase will take effect from October 27, 2010 until October 26, 2012.

In order to move into the next phases of the 1811A&B and 2714B licences, Chariot has agreed a work program over the next two years. Chariot must perform 3D seismic interpretation, economic evaluation, determine well location and design, and subsequently rig procurement, for a minimum exploration spend of US$11MM.

Chariot significantly exceeded its Initial Exploration Phase commitments on these licenses through its aggressive acquisition of large 3D seismic datasets. As a result, the well commitments in the First Renewal Phase have been waived by the Namibian government.

However, Chariot fully intends to continue its aggressive exploration program in these blocks and it remains Chariot's objective to drill as soon as possible.

As previously announced, Chariot has a dataroom open in its London offices soliciting partner interest for the blocks within its portfolio. The Company expects to announce additional details about this farm-out process later this year.

As a requirement of moving into this First Renewal Phase, Chariot will relinquish 50% of the acreage within each of the licenses in the Northern Blocks and the Southern Block as held throughout the Initial Exploration Phase. The initial 2D seismic program highlighted the primary areas of interest in the blocks which were then covered by 3D seismic. The areas of less geologic significance will be handed back to the government.

The total acreage for all eight blocks held by the Company will stand at 30,503 km² (from 38,725 km² previously) and the unrisked gross prospective resources for Chariot's prospect and lead inventory remains unchanged at 8.5 billion bbls.

Paul Welch, CEO commented, "This is a further step forward for us and we are very pleased to have received this approval so quickly after lodging our application to enter this next phase. Our work programs as detailed above will commence in earnest immediately as we continue to expedite our exploration activities in these blocks."

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