Chariot soars on Petrobras farm-out deal

19th May 2009 10:58

Chariot Oil & Gas hit a three-month high on news it's agreed to farm-out half its interest in exploration block 2714A, offshore southern Namibia, to Petrobras Oil and Gas.The oil and gas explorer will get $16.04m (£10.38m) in cash and reimbursement of the recently acquired 3D seismic programme in block 2714A.In the event of a commercial discovery, Chariot will get a production bonus equal to 4.75% of Petrobras' share of production up to either 2m barrels of oil equivalent or a value of $118m, whichever occurs first. Block 2714A is one of Chariot's eight exploration blocks located offshore Namibia and covers an area of 5,481km² in the southern Orange basin. The firm's wholly-owned subsidiary, Enigma Oil & Gas Exploration, will remain as operator of the block until the end of the initial exploration period after which Petrobas can decide whether it wants to take over.