Oil Co.'s Target Price 300% Current

Source: Stephane Foucaud 12/04/2024

Chariot Ltd. (CHAR:AIM) recently reported a US$100 million guarantee finance facility for Etana Energy from British International Investment and GuarantCo, according to an Auctus Advisors research note.

Auctus Advisors analyst Stephane Foucaud, in a research report published on December 4, 2024, maintained his target price of £0.08 on Chariot Ltd. (CHAR:AIM). The report follows the announcement of a US$100 million guarantee finance facility for Etana Energy from British International Investment and GuarantCo.

Foucaud emphasized the significance of the guarantee facility, stating, “Etana is one of the few companies holding an electricity trading license in South Africa that can buy and sell electricity through the grid. Etana is, therefore, a required counterparty to power producers.” He added, “With the US$100 mm guarantees, Etana is bankable.”

The analyst highlighted the potential impact, noting that “As a result of Etana bankability, a total generation capacity of up to 500 MW of wind and solar projects can access debt and be sanctioned.”

Regarding the strategic importance of the development, Foucaud stated, “This transaction highlights the importance of Etana to the power value chain and provides strong validation of Etana’s business model.” He added that it “also highlights Etana’s deep understanding of the power sector and its capability to attract very high-quality counterparties.”

The analyst noted that while “We currently value the South Africa business (Etana and Tharisa) at £0.02 per share,” this valuation “might prove too conservative.”

Auctus Advisors’ valuation methodology is based on a Sum of the Parts approach. Foucaud explained, “Our Core NAV based on Morocco Onshore and Tharisa is £0.03/sh. Adding the value of Anchois, Zambia power (First Quantum), and the green H2 project in Mauritania leads to a Some of the Parts Valuation of £0.08/sh.”

The share price at the time of the report of £0.02 represents a potential return of approximately 300% to the analyst’s £0.08 target price.

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