Chariot shares plunge on dry well discovery

SHARES in oil explorer Chariot Oil & Gas plummeted by half their value yesterday, as the company announced a well offshore Namibia was dry.

Shares closed down 66.41 per cent yesterday at 33p.

Chariot, which largely operates in Africa, said it had abandoned the Kabeljou well in the Nimrod prospect after tests showed there was no commercially viable oil or gas.

The Nimrod project was Chariot’s largest project in southern Africa, although the chief executive, Paul Welch, argued that there were still “other interests” to be explored within the licence.

He added: “This is the second well of a larger well programme in Namibia and we will continue to move forward with our work in the central and northern blocks. Our efforts in Mauritania continue to progress as do our plans to add new assets to our portfolio.”

It follows an announcement in May, when Chariot said another well offshore Namibia was dry. Shares had gradually recovered from this setback until last week, when they fell around 20 per cent last Tuesday, prompting Chariot to issue a statement saying the results of the Kabeljou well were not yet known.

Analysts at Peel Hunt downgraded their recommendation on the stock, moving to “sell” from “hold” and slashing the target price to 40p from 150p. Investec followed suit, downgrading its stance from “buy” to “hold”.