The latest research note from Cavendish has reiterated its Buy rating on Chariot Limited (LON:CHAR), highlighting what analyst James McCormack describes as a compelling combination of upstream oil and gas growth alongside value creation from renewable power assets.
Cavendish maintained its 7.2p target price for Chariot, compared with a share price of 1.3p at the time of publication, implying significant potential upside according to the broker’s analysis.
In the report, Research Analyst James McCormack said: “Through Chariot’s recent transaction offshore Angola, the Company has secured economic exposure to a prolific producing asset with material upside.”
The broker believes the Angola acquisition could become a transformational source of long term cash flow for the business. Cavendish stated that, on a pre debt basis, it values Chariot’s economic exposure in Angola at US$114 million using a flat US$60 per barrel oil price assumption. The valuation increases further in stronger oil price environments.
According to the note, rising oil prices could also improve interim cash flows before completion of the deal in the second half of 2026, while accelerating repayment of the Shell facilities linked to the transaction. This, in turn, could speed up distributions to Chariot.
Renewable Power Business Creating Additional Value
Alongside upstream expansion, Cavendish highlighted Chariot’s progress in renewable power, particularly in South Africa.
McCormack wrote: “Having co-founded one of the fastest growing energy trading companies in South Africa and reached financial close on two utility scale wind projects, Chariot is looking to realise value from its Renewable Power business and reinvest in its upstream growth to capture the opportunity that can deliver the most value to shareholders.”
The broker noted that Chariot has established a leading South Africa-focused electricity trading platform and secured material stakes in two large wind generation projects. With financing now in place for these future revenue streams, management is focused on monetising value from the renewables division while continuing to expand the upstream portfolio.
Anchois Development and Namibia Exposure
Cavendish also pointed to ongoing work at the offshore Anchois gas development, where Chariot is attempting to optimise the project through a revised development plan with lower capital expenditure requirements.
The report added that industry interest in Moroccan offshore acreage remains active, particularly following Murphy Oil Corporation securing adjacent acreage. Cavendish believes this could support future farm-out opportunities for Chariot’s acreage position.
Elsewhere, Chariot continues to maintain exposure to its multi-billion barrel opportunity offshore Namibia through a 10% back-in right linked to its previously operated blocks.
Highlights from the Cavendish Research Note
- Buy rating maintained by Cavendish
- Target price maintained at 7.2p
- Angola exposure valued at US$114 million at US$60/bbl oil
- Potential valuation rises to approximately US$155 million at US$80/bbl
- Renewable Power division includes South African electricity trading platform
- Financial close achieved on two utility-scale wind projects
- Ongoing optimisation work at Anchois gas development
- Continued exposure to offshore Namibia opportunity
- Management pursuing additional African upstream M&A opportunities
Financial Snapshot
Cavendish forecasts adjusted EBITDA losses narrowing from US$14.2 million in 2024 to US$8.3 million in 2025, before improving further in 2026.
The report also highlighted Chariot’s market capitalisation of approximately £38.4 million and enterprise value of £37.5 million.
Final Thoughts
Cavendish’s latest note presents Chariot as a company entering a potentially important phase of development, supported by new production-linked cash flow opportunities in Angola and increasing value within its renewable power portfolio. With management focused on monetising mature renewable assets while expanding upstream exposure across Africa, the broker believes Chariot is positioning itself for long term growth across multiple energy markets.
