Chariot Oil & Gas� (LSE: CHAR.L ) was steady at 30 pence in early London trade this morning despite half-year results that showed the shares trading below the company's cash value.
Chariot, which is exploring for oil and gas in Africa, revealed an $84 million interim loss, of which $81 million related to writing off the Tapir South Well in Namibia. Back in May, Chariot confirmed the well had been abandoned after its drilling found "no commercial hydrocarbons."
However, Chariot's figures today revealed no debt and total cash of $112 million. The cash position was bolstered by a $49 million share placing earlier in the year.
Chariot's current market cap is �60 million, while the cash pile is equivalent to �68 million or 34 pence per share.
The discount reflects Chariot's poor run of luck of late. As well as the Tapir South Well disappointment, the group had to suffer "no commercial hydrocarbons" at a different Namibian well this month. That news chopped about two-thirds off the share price.
Paul Welch, chief executive of Chariot, remains upbeat. He said today:
We have multiple future targets for drilling in different geographic locations targeting different geological play types, as well as the opportunity to add new assets to our portfolio. Despite the recent well results being disappointing, we are still in control of our next steps and will seek to preserve this position in order to get the best value for shareholders over the longer term. We remain committed to our efforts in Namibia and will update the market with our drilling objectives for 2013 in due course.
Despite Chariot's recent drilling record, it's worth remembering these shares zoomed from 16 pence to 305 pence between 2009 and 2011 on the prospect of sizable oil discoveries.
And you never know, actual drilling success in Namibia could see similar handsome gains. Chariot's cash pile could limit the downside from here, too.
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