Namibia approves Chariot's farm-out with BP

A subsidiary of Chariot Oil and Gas has received regulatory approval for its farm-out agreement with sector giant BP in block 2714A offshore Namibia.

The agreement between Enigma Oil and Gas Exploration and BP, first announced on August 8th 2011, has now received full approval from the Ministry of Mines and Energy in Namibia. BP said it will cover the cost of drilling the first exploration well in this block as well as past costs incurred, which have now been received by Chariot.

The operator, Petrobas, owns 50% of the Sourthern Block 2714A, while BP and Enigma have a 25% interest each.

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"We are very pleased to have concluded this agreement with the support of the Ministry of Mines and Energy in Namibia," said Chief Executive Officer Paul Welch.

"We can now push forward with our drilling campaign on Kabeljou-1 using the additional knowledge and experience of our new partner, whilst reducing our capital and risk exposure," he said.

Chariot shares rose 2.48% to 124p in early trading on Thursday.

BC