Shares in oil explorer Chariot Oil & Gas (CHAR:AIM) gushed up 7.1% to 24.1p on a read-through from Brazilian firm HRT's own exploration efforts in Namibia, the group's main area of focus. A relatively upbeat appraisal of the group's prospects in today's AGM statement from chief executive officer (CEO) Larry Bottomley added fuel to the rally.


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Results (20 May) from the Wingat well, drilled by HRT in partnership with large Portuguese firm Galp Energia, did not reveal a commercial success but did demonstrate the presence of oil generating source rock off the coast of the West African country. This is a key element in identifying a working petroleum system, or in other words a commercial discovery. Broker Jefferies, which has a buy recommendation on Chariot and a price target of 50p, says: 'We believe this gives encouragement to the potential of Chariot's 90% owned central blocks and could assist in finding a farm-in partner, a process which is expected to begin in the third quarter.'


Bottomley acknowledged there would be no drilling from his company in 2013 but flagged a 'busy year' of evaluating 3D seismic data and analysis of well results, including that of third parties like HRT. He flagged cash preservation as a priority with a planned 2013 spend of $25 million underpinned by 2012's year-end cash position of $68.3 million.


The shares have lost more than 90% of their value since they peaked above 300p in March 2011. Investors dumped the stock en masse after it delivered two dry holes in a highly anticipated drilling campaign offshore Namibia last year.

Issue Date: 21 May 2013