Chariot Oil & Gas Limited  Annual Report & Accounts 2010
Annual Report & Accounts 2010
UnLOCKin G
AFRiCA’S  
OiL & GAS 
pOtentiAL
Chariot Oil & Gas Limited
Registered Office
Sydney Vane House
Admiral Park
St. Peter Port
Guernsey
GY1 3EL
www.chariotoilandgas.com  Company Overview
01 Highlights
02 At a Glance
04 Chairman’s Statement
06 Chief Executive Officer’s Report
08 Review of Operations
12  Board of Directors and  
Senior Technical Team
Corporate Governance
14 Directors’ Remuneration Report
16 Social Responsibility Statement
17 Corporate Governance Statement
18 Report of the Directors
20 Independent Auditors’ Report
 
Financial Statements
21  Consolidated Statement of 
Comprehensive Income
22  Consolidated Statement of 
Changes in Equity
23  Consolidated Statement of 
Financial Position
24 Consolidated Cash Flow Statement
25  Notes forming part of the  
financial statements
ibc Advisers
Chariot Oil & Gas Limited is an 
independent oil and gas exploration 
company with interests in Namibia. 
Enigma Oil and Gas Exploration (Pty) 
Limited is a wholly owned subsidiary  
of Chariot and is the operator of the 
licence areas.
Four licences covering eight offshore blocks in Namibia 
Large block allocation – one of largest holdings in Namibia –   
38,725 km²
8.5 billion barrels of gross unrisked mean prospective resources 
3 geologically distinctive basins – well positioned across   
Namibian South Atlantic margin
Frontier exploration with a proven working petroleum system 
Increasing interest in Africa, specifically in West African deep   
water plays 
Advisers
Registered Office
Sydney Vane House
Admiral Park
St. Peter Port
Guernsey
GY1 3EL
Registration Number: 47532
nominated Adviser
Ambrian Partners Limited
Old Change House
128 Queen Victoria Street
London
EC4V 4BJ
United Kingdom
Broker
Ambrian Partners Limited
Old Change House
128 Queen Victoria Street
London
EC4V 4BJ
United Kingdom
Bankers
Barclays Bank PLC
PO Box 41
Le Marchant House
Le Truchot
St. Peter Port
Guernsey
GY1 3BE
 
Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
United Kingdom
Financial public Relations adviser
Buchanan Communications
45 Moorfields
London
EC2Y 9AE
United Kingdom
 
Solicitors
As to British Law:
Memery Crystal LLP
44 Southampton Buildings
London
WC2A 1AP
United Kingdom
 
As to Namibian Law:
Lorentz Angula Inc.
Private Bag 12007
Ausspannplatz
Windhoek 3rd Floor
LA Chambers
Ausspann Plaza
Windhoek
Namibia
 
As to Guernsey Law:
Babbé
PO Box 69
18–20 Smith Street,
St. Peter Port
Guernsey
GY1 4BL
 
Company Secretary
Artemis Secretaries Limited
Sydney Vane House
Admiral Park
St. Peter Port
Guernsey
GY1 3EL
 
Registrars and receiving agents
Anson Registrars Limited
PO Box 426
Anson Place
Mill Court
La Charroterie
St. Peter Port
Guernsey
GY1 3WX Chariot Oil & Gas Limited
Annual Report & Accounts 2010
01
COMPANY OVERVIEW
Highlights
Chariot’s blocks of interest are located off  
the coast of Namibia – a significant acreage 
position in one of the last frontiers for  
oil and gas exploration
Highlights
Completed extensive seismic programmes  
across all blocks of interest
Dataroom opened for potential partners 
Paul Welch appointed as CEO 
Strengthened in-house technical team 
Range of due diligence undertaken on new  
business opportunities
Cash on hand of US$16.2m at   
28th February 2010
Post period highlights
3.3 billion barrels increase in mean  
prospective resource volumes
George Canjar appointed to Board of  
Directors
“I am very pleased to report  
on what was a transformational 
period for the Company. We 
have made great strides in our 
exploration efforts in Namibia, 
furthered our other business 
development opportunities 
and significantly increased 
value for shareholders.”
Paul Welch
Chief Executive Officer Chariot Oil & Gas Limited
Annual Report & Accounts 2010
02
BRAZILIAN SALT BASIN
(~50 BILLION BOE)
WEST AFRICAN 
SALT BASIN
(~30 BILLION BOE)
NAMIBIA 
KUDU GAS FIELD
MORE THAN 1 TCF
ATLANTIC
OCEAN
NORTH FALKLANDS
RECENT REPORTED 
OIL DISCOVERY
BREDASDORP BASIN
(OIL AND GAS FIELDS)
RECENT LARGE
OIL DISCOVERIES
(CHARIOT ACREAGE GROSS 
 RESOURCE ESTIMATE: 
8.5 BILLION BOE)
At a Glance
KEY MiLEst OnEs
May 2008 
Listed on AIM raising 
US$90m
October 2008 
Increased mean 
prospective resources from 
3.9 bbbls to 5.24 bbbls
May 2009 
Signed farm-out with 
agreement with Petrobras 
for 50 per cent of  
block 2714A
Chariot continues to progress the exploration 
programmes across its Namibian blocks as  
it looks to further mature its prospect and 
lead inventory
Unlocking AFR ic A’S 
oil & g AS potenti Al Chariot Oil & Gas Limited
Annual Report & Accounts 2010
03
COMPANY OVERVIEW
“We have committed to and completed the 
largest exploration programme undertaken 
offshore Namibia to date.”
Paul Welch 
Chief Executive Officer
strategy
Maximise value from position  
in Namibia
Mature prospects for drilling 
Secure farm-in partners 
Introduce nearer term assets  
into portfolio
Bring first oil date forward   
and diversify risk
January 2010 
Completed all seismic 
acquisition programmes
February 2010 
Dataroom opened  
in London
March 2010 
Further increase in gross 
mean resource potential  
– up 62 per cent to  
8.5 bbbls Chariot Oil & Gas Limited
Annual Report & Accounts 2010
04
Chairman’s Statement
Key positioning
within prolific South Atlantic margins
“Our key focus is 
on developing our 
Namibian assets 
whilst at the same 
time looking to 
bring the first oil 
date forward.”
Peter Kidney 
Non-Executive Chairman
It is with pleasure that I present the 
latest results for Chariot Oil & Gas 
Limited, reporting on a year that saw 
transformational changes within our 
Company. The Board was delighted to 
welcome Paul Welch as CEO in October 
2009 and Chariot has made significant 
steps forward with our exploration in 
Namibia, furthered efforts on numerous 
new business opportunities and built a 
strong in-house technical team. The 
Board was also very pleased to 
welcome George Canjar who joined us 
as a non-executive director post period.  
He has extensive experience in the oil 
and gas industry which will be of great 
value to us going forward.
Namibia – frontier region, high 
impact exploration
Since our last report, there have been a 
number of major discoveries in deeper 
water environments. Brazilian 
exploration continues its unprecedented 
success and high profile discoveries 
have also been reported in West Africa, 
both in the established West African 
Basins and in new offshore areas such 
as Ghana and Sierra Leone.  These 
latter discoveries prove the prolific 
capability of African Atlantic margin plays 
outside the proven basins indicating 
positive implications for Namibia which 
lies in a comparable geologic setting. 
The recent reported discovery offshore 
the Falklands is also highly encouraging.  
Deep water exploration and production, 
pioneered across the Atlantic in the Gulf 
of Mexico and in Brazil, is leading to 
increased interest in the remaining 
underexplored high potential West 
African areas with majors, national oil 
companies and governments looking to 
secure acreage and future supply. 
Chariot in Namibia – one of the 
largest licence holdings and biggest 
work programmes
Chariot, through its wholly owned 
subsidiary Enigma Oil & Gas Exploration 
(Pty) Limited (“Enigma”) holds one of 
the largest net acreage positions in 
Namibia (after the Namibian State Oil 
Company, Namcor). This totals an area of 
38,725 km², and we have committed to 
and fulfilled the largest exploration work  Chariot Oil & Gas Limited
Annual Report & Accounts 2010
05
COMPANY OVERVIEW
“The Group is debt 
free, issued no  
new shares in the 
financial period and 
held cash balances 
of US$16.2m at  
28th February 20 10. ”
programme offshore Namibia to date. We 
have been very pleased with our results 
from the seismic acquisition which we 
completed across all of our blocks of 
interest. This has identified gross unrisked 
prospective resource volumes of 8.5 
billion barrels and provided us with a 
more detailed understanding of the 
structural composition and prospectivity 
of the region. Net unrisked prospective 
resources attributable to Chariot have 
increased 89 per cent from 3.9 billion 
barrels as reported at the time of listing 
on AIM in 2008 to the current estimate 
of 7.4 billion barrels. 
We feel that we are very well positioned 
within the Namibian margin with licence 
areas situated in three distinct geological 
settings. Our work continues to develop 
our knowledge and understanding  
of our blocks of interest as we look to 
further define targets for drilling. 
 
Our focus on Africa
Creating value is at the core of the 
Company’s strategy and we are focused 
on developing our high impact 
exploration whilst looking to balance  
our risk profile. As part of this strategy, 
concurrent with our farm-out efforts,  
we are looking to secure nearer term 
development opportunities and bring 
our first oil date forward in order to 
generate production cash flow. 
Our focus is on African plays and this  
is where most of our expertise lies. Africa 
is a rapidly emerging region on the world 
energy stage, possessing a multitude  
of business opportunities for investors. 
Having worked on the continent for 
many years, our management team has 
a broad range of experience in both 
finding and producing oil whilst working 
with governments and other partners. 
Africa holds a wealth of energy potential, 
a fact that is becoming ever more 
apparent as more companies focus on 
the region. 
Financial review
The Group incurred a loss of US$3.1m 
(2009: US$28.5m loss) for the year 
ended 28th February 2010. The other 
administrative expenses were 
US$3.03m; this is comparable to the 
prior year balance of US$3.2m. 
Capitalised exploration costs for the 
period totalled US$17.6m which are 
primarily related to the acquisition of 3D 
seismic data. The farm-out agreement 
with Petrobras in relation to block 
2714A allows the Group to recharge  
50 per cent of the exploration costs and 
a portion of the overhead costs related 
to this block. 
The Petrobras farm-out agreement 
included a payment of US$16.04m to 
Chariot, and this reduced the capitalised 
exploration costs for the period. 
Petrobras have also agreed to pay 
Chariot a production bonus of up to 
2 million barrels of oil equivalent or 
US$1 18m from its share of the first 
production from block 2714A, whichever 
occurs first. As this bonus is contingent 
on future production, it has not been 
included in the financial statements.
During the year, the Group terminated its 
services agreement with High Resolution 
Technology & Petroleum Ltd (“HRT”), 
this was subsequently referred to 
arbitration. A settlement was achieved  
in February 2010, whereby both parties 
agreed that there will be no payment  
of damages by either side and that each 
party pays their own respective costs 
incurred during the dispute. As part of 
the settlement HRT agreed to provide  
all outstanding data and reports to the 
Group. A US$2.9m provision for payment 
to HRT which was provided for in  
the 28th February 2009 financial 
statements, for unpaid exploration  
costs, was released upon settlement. 
Conclusion
The Group has overcome many 
challenges since floating on AIM in 2008. 
It has also substantially exceeded its  
work commitments in Namibia and has 
attracted the attention of many major 
international oil companies. Furthermore, 
the Group is debt free, issued no  
new shares in the financial period and 
held cash balances of US$16.2m at 
28th February 2010 (2009: US$28.9m).
I wish to thank my fellow Directors and 
the management and staff of the 
Chariot Group for their hard work and 
achievements of the past year. I look 
forward to an exciting year as we 
progress our strategic growth objectives. 
Peter Kidney
Non-Executive Chairman Chariot Oil & Gas Limited
Annual Report & Accounts 2010
06
Chief Executive Officer’s Report
“I believe Chariot 
presents a real value 
add opportunity. 
Our Namibian 
acreage is a solid 
platform from which 
to develop, and over 
the coming years  
I believe that Chariot 
can grow from 
being a junior 
exploration 
company  
into a mid-tier E & P 
player with both 
exploration and 
production success.” 
Paul Welch 
Chief Executive Officer
I am very pleased to report on my first 
set of full year financial statements as 
CEO and I am delighted with the 
progress we have made since I joined 
Chariot. I am also honoured to be part  
of a company that I believe has the 
potential to deliver a great deal of value 
to shareholders and to put Namibia 
firmly on the oil producing map. I am 
pleased to recount our progress and look 
forward to continuing developments 
throughout the coming year. 
Progress to date 
Since our interim results, published in 
November 2009, we have completed 
all planned seismic acquisition 
programmes across our blocks of 
interest, the final programme in the 
Northern block concluded in January 
2010. Such acquisition programmes 
were extensive, in some licences 
significantly exceeding the requirements 
as agreed with the Namibian Ministry, 
providing a strong indication of our 
commitment to developing our assets. 
Due to our large acreage position and 
the substantial amount of newly 
acquired seismic data, we negotiated 
licence extensions for our blocks in the 
second quarter of last year in order to 
have the time to pursue our exploration 
efforts to the best of our ability. All of 
our licences are in good standing.
With the completion of the 2D 
acquisition and interpretation 
programme, we were very pleased to 
announce resource volumes for our 
Central blocks. Three new leads have 
been identified with 3.3 billion barrels 
of prospective resources. This increased 
our previous estimate of gross unrisked 
prospective resources by 62 per cent  
to 8.5 billion barrels (net prospective 
resources of 7.4 billion barrels) and 
underscored our belief in the oil 
potential of the Namibian margin. 
We announced in February the opening 
of a dataroom in London in order to 
seek out further farm-outs for our 
blocks of interest. Having partners 
alongside us will help to mitigate the risk 
and expedite our exploration activity. 
Since the dataroom opened, we have 
8.5 billion (boe)
Very large oil targets – gross mean prospective 
resources of 8.5 billion barrels of oil Chariot Oil & Gas Limited
Annual Report & Accounts 2010
07
COMPANY OVERVIEW
“I was delighted  
to welcome new 
technical staff to the 
Group; all of whom 
have worked in the 
industry for many 
years and whose 
experience is 
proving invaluable.  
I look forward to the 
coming year with 
confidence as we 
continue to deliver 
on our strategy  
and objectives.”
welcomed a number of interested 
international oil companies and we 
expect further visitors over the coming 
quarter. The expressions of interest have 
significantly increased from the visits to 
our first dataroom with parties keen to 
view the newly acquired 3D seismic 
information. As we have previously 
stated, this is a key part of our strategy 
as we look to secure industry partners 
to share in the costs and rewards of 
exploration going forward. We continue 
to liaise closely with Petrobras on block 
2714A in the south and look forward  
to working alongside other interested 
parties in due course.
Our new business opportunity 
evaluation efforts continue across  
the African continent as we seek out 
additional prospects. As previously 
stated, we are looking to balance  
our current portfolio with nearer  
term production potential in order to 
introduce production cash flows and 
reduce our risk profile. This process  
is ongoing using our in-house skills  
and expertise.
I was delighted to welcome new 
technical staff to the Group during the 
period: Matthew Taylor (Director  
of Exploration), Julia Kemper (Senior 
Staff Geophysicist), Martin Richards 
(Development Engineering Manager) 
and Alex Green (Commercial Manager), 
all of whom have worked in the industry 
for many years and their experience is 
proving invaluable.
Operating in Namibia
Namibia is a country that I am very 
familiar with from my earlier activities 
with Shell and Hunt Oil – both early 
entrants into the country. As well as the 
interesting geology that the offshore 
basins offer, Namibia is a superb place 
to do business. Namibia has recently 
celebrated the 20th anniversary of  
its independence and inaugurated 
President Hifikepunye Pohamba for a 
second five-year term. It has a stable 
democracy with a competitive fiscal 
regime and sound investment profile. 
The government has pursued free-
market principles designed to promote 
commercial development, has good 
relations with its neighbours, and 
actively encourages international foreign 
investment. We have an excellent 
working relationship with the Ministry  
of Mines and Energy and Namcor and  
it is a continuing pleasure to work there.
Chariot – the future
I believe Chariot presents a real value 
add opportunity. Our Namibian acreage 
is a solid platform from which to 
develop, and over the coming years  
I believe that Chariot can grow from 
being a junior exploration company  
into a mid-tier E & P player with both 
exploration and production success. 
Whilst securing new opportunities is  
a priority for us, our position offshore 
Namibia remains our key focus. The 
team that we have in place now is  
one that I am extremely pleased to  
be working with and I value their input 
immensely. We now possess the 
in-house skills to both further develop 
the Namibian potential and expand the 
business by acquiring additional assets. 
We believe that we have an enviable 
strategic position within one of the  
few remaining high impact exploration 
frontier regions off the West African 
coast. I relish the prospect of an  
exciting year ahead which will see 
significantly increased activity levels  
and I look forward to updating 
shareholders accordingly.
Paul Welch
Chief Executive Officer Chariot Oil & Gas Limited
Annual Report & Accounts 2010
08
NAM I BIA
Leads and Prospect
Prospective Trends
2D Seismic 
3D Seismic 
1811A 
ENIGMA
1811B 
ENIGMA
2312A&B 
ENIGMA
2412A&B (NORTHERN HALVES) 
ENIGMA
2714B 
ENIGMA
2714A ENIGMA
(PETROBRAS 50%)
Review of Operations
Namibia – three basins, distinct 
geology
Chariot is well positioned with our 
blocks situated in three geologically 
distinct settings:
The “Northern blocks” in the  •	
Namibe Basin, located north  
of the Walvis Ridge. 
The “Central blocks” straddling  •	
the Luderitz/Walvis Basins.
The “Southern blocks” in the  •	
Orange Basin.
The Namibe Basin forms part of  
the prolific West African “salt basin”, 
bounded to the south by the Walvis 
ridge. Prior to the Atlantic Ocean 
opening, the Namibe Basin lay adjacent 
to the Santos Basin of Brazil, in which 
recent super-giant oil discoveries have 
been made. The Luderitz and Walvis 
Basins are virtually unexplored with  
only four wells drilled to date, in an  
area similar in size to the prolific UK 
North Sea Central Graben, where 
hundreds of exploration wells have 
been drilled. The Orange Basin contains 
the very large delta of the Orange River 
system and also hosts the giant Kudu 
gas field.
Exploration in Namibian margin  
to date
Sporadic exploration activity in the 
Southern African Atlantic margin led to 
the discovery of the giant Kudu gas field 
(in Namibian waters), now under 
development, and the Ibhubesi oil and 
     Licence  Licence 
   Interest   expiry date – first  area 
Asset  Licence  Operator  %  Status phase  exploratory phase  km
2
  Comment
Offshore basins
Block 181 1A  14  Enigma  100  Exploration  27th October 2010  5,481
Block 181 1B  14  Enigma  100  Exploration  27th October 2010  5,481
Block 2312A  19  Enigma  100  Exploration  31st August 201 1  Minimum
Block 2312B  19  Enigma  100  Exploration  31st August 201 1 
16,801
 four year
N/2 of Block 2412A  19  Enigma  100  Exploration  31st August 201 1  exploration
N/2 of Block 2412B  19  Enigma  100  Exploration  31st August 201 1  period
Block 2714A  20  Enigma  50  Exploration  31st August 2010  5,481
Block 2714B  15  Enigma  100  Exploration  27th October 2010  5,481
Summary table of the blocks
strategically positioned across 3 distinct basins Chariot Oil & Gas Limited
Annual Report & Accounts 2010
09
COMPANY OVERVIEW
northern Blocks
Volume potential 2.5 billion barrels 
Located in the Namibe Basin 
WD 0–2,750 m over block 
1,500 km 
2
 3D seismic (2008/09)
Processing to be complete in   
Q2 2010
One Prospect identified to date   
– WD at location 700–1,000 m
6 leads identified 
Central Blocks
Volume potential 3.3 billion barrels 
Located in Walvis Basin 
WD 500–3,000 m 
3,000 km of 2D seismic (2008) 
Processing and interpretation  
completed March 2010
13 leads identified 
southern Blocks
Volume potential 2.7 billion barrels 
Located in the Orange Basin 
WD 100–1,500 m 
3,000 km 
2
 3D acquired in 
2008/09
16 leads identified 
Petrobras farmed into Block 2714A  
for a 50 per cent interest
Leads located in shallow water  
less than 500 m
gas fields (in South African waters). 
There has only been one phase of 
exploration, in the early 90s, which  
was targeted at the primary Namibian 
margin and culminated in the drilling  
of eight exploration wells, all located in 
the shallow waters on the shelf and 
slope portions of the basin due to 
technical and commercial limits that 
existed at that time. Our newly acquired 
seismic data combines evidence of 
large structural features with direct 
hydrocarbon indications which provide 
strong support for the move into the 
deeper water sections of these basins. 
These were areas that were technically 
out of reach to the early explorers  
in Namibia. 
Prospectivity
The Namibian margin south of the 
Walvis Ridge is proven to host 
productive rift system source rocks as 
well as Lower Aptian marine oil prone 
facies (equivalent in age to source rich 
sequences in the Aptian salt basin to 
the north) and Cenomanian-Turonian 
source rocks. Although gas is the 
dominant phase found to date this 
appears to be a function of high 
maturity in the local fetch area of the 
main discovery (Kudu) which lies below 
the very thick Orange delta sediment 
deposits. Source rock characteristics are 
oil prone and oil is the expected phase 
in most of the prospectivity identified in 
Chariot’s exploration areas. The absence 
of salt has inhibited trap development 
on the shelf and slope (hence the poor 
exploration record of past drilling) but 
deepwater seismic demonstrates a 
wide range of large structural and 
stratigraphic traps that appear to be 
associated with large rotated rift fault 
blocks. Chariot has positioned itself to 
exploit this, as yet, untapped potential. 
Key features of Chariot’s licences
Prospect portfolio includes several •	
large structural traps and combination 
structural/stratigraphic closures in 
three different geological settings.
Prolific hydrocarbon generation is •	
proven in the Orange Basin with the 
giant Kudu gas field, demonstrably 
sourced from an oil prone, but locally 
over mature source rock.
Extensive seabed gas hydrates,  •	
gas chimneys and other Direct 
Hydrocarbon Indicators (“DHIs”),  
all positive indicators of both gas  
and oil generation. 
Past drilling, even where unsuccessful, •	
has revealed interbedded sandstone 
and shale intervals providing multiple 
sealed reservoir target levels for  
future exploration.
Despite poor trap development on the •	
shelf, discoveries have been made 
and oil shows encountered proving a 
petroleum charge system. 
strategically positioned across 3 distinct basins Chariot Oil & Gas Limited
Annual Report & Accounts 2010
10
Review of operations continued
“We remain 
confident about the 
significant potential 
of offshore Namibia 
and believe that  
we are well placed 
to develop and 
realise the value  
of our assets.”
Northern Blocks
Blocks 181 1A and B are situated to the north of the Walvis Ridge. Multiple leads 
are mapped including a very large fault block overlain by Aptian age carbonates. 
Chariot undertook two acquisition programmes across the Northern blocks in 2009 
completing an initial programme of 900 km² which was followed up with a further 
600 km² focusing on an area of specific interest over the previously identified 
Zamba prospect. The area of 3D seismic data acquired totalled 1,500 km
2
 and 
processing and interpretation has commenced and will be completed in the near 
future. As well as the Zamba prospect, four stacked leads have been identified in 
the Tapir Complex. A seismic line through this prolific section is shown here.
This area has proven hydrocarbon potential as evidenced by the Kunene-1 well in 
adjacent block 171 1 which shows potential for up to 14 Tcf gas, (as reported by the 
Namibian Ministry of Mines and Energy). Basin modelling demonstrates potential for 
oil in Chariot’s licence area.
Central Blocks
The blocks are located on an arch between the Walvis and Luderitz Basins 
and can be charged by hydrocarbons from a thick rift section in either,  
or both flanking basins. Large structural features have been mapped and 
hydrocarbon indicators seen in the Chariot concessions resulting in a lead 
portfolio being defined. 
Chariot completed over 3,000 line km of 2D seismic data acquisition across its 
2312A and B blocks in the period. Following the processing and interpretation this 
data the Company announced, in March 2010, that these licences contain 3.3 billion 
barrels of unrisked prospective resources. Prior to this announcement, no volume 
potential had been assigned to this area. Three leads were reported, Klipspringer, 
Hartebeest and Oryx all of which lie in relatively deepwater depths of 2,000–
2,500 m. The leads are interpreted to lie within a mapped Cretaceous channel-fan 
system with seismic character indicative of deep marine sandstone facies. These high 
graded leads are identified as combination traps with a component of structural dip 
closure (apparent following depth conversion) with upside stratigraphic trapping 
potential. Preliminary source maturity modelling suggests that the leads are oil prone. 
(Only the volumes contained within the structural closure have been included in the 
prospective resource volume estimates.) 
Southern Blocks
Blocks 2714A and B are situated to the south of the Luderitz High, on the 
northern edge of the Orange Delta. The mapped leads are mainly early 
Cretaceous turbidites and transitional phase Kudu type pinch-outs. 
On blocks 2714A and B, 3D seismic processing continues, the results of which will 
be available in the near future. Chariot, as Operator, completed 3,000km² of data 
acquisition across these blocks, the latter 1,500 km² in partnership with Petrobras. 
The Company has been buoyed by the interest of Petrobras in the period, resulting 
in the farm-in agreement being signed and announced in May 2009. Chariot looks 
forward to developing a closer relationship with them as the partners assess drilling 
prospects on block 2714A. 
Conclusion
We feel that we are very well positioned within the Namibian margin with our 
licence areas situated in three distinct geological settings. Our work continues to 
develop our knowledge and understanding of our blocks of interest as we look to 
further define targets for drilling. 
“Our work 
continues to 
develop our 
knowledge and 
understanding of 
our blocks of 
interest as we look 
to further define 
targets for drilling.”
Matthew Taylor 
Director of Exploration Chariot Oil & Gas Limited
Annual Report & Accounts 2010
11
COMPANY OVERVIEW
Northern Blocks
Central Blocks
Southern Blocks Chariot Oil & Gas Limited
Annual Report & Accounts 2010
12
Board of Directors and Senior Technical Team
Peter Kidney
Non-Executive Chairman
Peter is a fellow of the Institute of 
Chartered Accountants in Ireland and he 
has over 26 years of experience in natural 
resources, including oil and gas. Peter was 
previously the Chief Executive Officer of 
the quoted mining company, ARCON 
International Resources Plc which was 
taken over by Lundin Mining in 2005.  
He was also a founding Director of 
Providence Resources Plc, an oil and gas 
exploration and production company 
quoted on AIM. From 2004 to 2006, 
Peter also acted as the Chairman of the 
Irish Mining Industries Association, IMEG. 
Board of Directors:
James Burgess
Commercial Director
James set up Everett Financial 
Management Limited in 1992 and sold it 
in 2003. Since then, he has been involved 
in numerous fund raisings and admissions 
to trading on AIM of a number of 
companies in the energy and resource 
sectors, operating largely in the African 
continent. Prior to Everett Financial 
Management Limited, James worked with 
Hoare Govett which is now part of RBS. 
He is a Non-Executive Director of a 
number of companies, including Chromex 
Mining plc which is also listed on AIM.
Adonis Pouroulis
Non-Executive Director
Adonis, one of the founders of Chariot  
and Enigma, is a mining entrepreneur 
whose expertise lies in the discovery and 
exploration of natural resources. Adonis  
is also Chairman of Petra Diamonds Ltd.,  
a pan-African diamond mining company 
which he founded and listed on London’s 
AIM market in 1997. Petra is now one  
of the largest independent diamond 
producers in Africa. He has been 
influential in the listing of a number of 
other companies onto AIM and has been 
instrumental in structuring and raising 
funds to help finance early stage 
exploration and mining projects  
across Africa.
Paul Welch
Chief Executive Officer
Paul has extensive oil and gas industry 
experience having worked for Shell 
International for 12 years, followed by a 
further nine years with independent 
companies, most recently with Hunt Oil 
and Pioneer Natural Resources. He held a 
wide variety of engineering, management 
and business development positions 
throughout Shell’s global operations across 
all of its core regions of exploration, 
development and production. At Hunt Oil, 
Paul evaluated exploration and production 
opportunities across its international asset 
portfolio and more recently he worked in 
Northern Africa with Pioneer, responsible 
for producing assets in Tunisia. Paul was 
instrumental in significantly increasing the 
production profile and overseeing new 
business development in Algeria, Libya, 
Morocco, Egypt and Iraq. 
Heindrich ndume
Country Director Namibia
Heindrich is a Namibian national with 
mining exploration experience 
throughout sub-Saharan Africa. Heindrich 
has played a unique role within the 
development of Namibia’s mining and 
energy strategies, including acting as 
National Energy Council Secretary and 
World Energy Council Representative for 
the Namibian Ministry of Mines and 
Energy. Heindrich was one of the 
founding shareholders of Enigma,  
which is now a 100 per cent subsidiary 
of Chariot.
Robert sinclair
Non-Executive Director
Robert is Managing Director of the 
Guernsey-based Artemis Company, a 
Director of a number of investment fund 
management companies and investment 
funds associated with Artemis Company. 
Robert is Chairman of Schroder Oriental 
Income Fund Limited, a Director of ING 
UK Real Estate Income Trust Limited, 
Chairman of its Audit Committee and a 
Director of Chromex Plc. He is a Fellow 
of the Institute of Chartered Accountants 
in England and Wales and is resident in 
Guernsey. Robert represents the interests 
of Westward, a major shareholder  
of Chariot. Chariot Oil & Gas Limited
Annual Report & Accounts 2010
13
COMPANY OVERVIEW
Senior Technical Team:
Alex Green
Commercial Manager
Alex has over 20 years experience in 
business development, commercial and 
financial experience in the upstream oil  
and gas sector. Alex began his career as a 
Petroleum Economist for Clyde Petroleum 
where he was responsible for developing 
the company’s corporate business model 
and evaluating acquisition opportunities. He 
subsequently worked as a Risk Analyst for 
BG Plc and moved to Commercial Manager 
and then Group Economics Manager for 
Paladin Resources. At Paladin, Alex led 
successful joint venture negotiations and ran 
the financial and commercial analysis within 
the company’s business development team. 
He also played a key role in developing 
internal and external financial models.
Martin Richards
Development Engineering 
Manager
Martin has worked in the oil and gas 
industry for over 30 years and has an 
in-depth experience of all aspects of 
subsurface management, reservoir 
engineering and petroleum economics. 
He has worked as both a Chief and 
Senior Reservoir Engineer for a variety of 
companies, including Petro-Canada, Suez 
Oil Company, Deminex and Mobil. He 
has particular expertise in operational and 
functional reservoir management, leading 
multi-disciplinary reservoir studies, asset 
management and reserves reporting. 
Martin has had numerous exploration and 
drilling successes to date.
Matthew taylor
Director of Exploration 
Matthew is a petroleum geologist who has 
worked in the industry for nearly 30 years. 
He began his career with BP Exploration  
in 1980 and subsequently held senior 
geologist posts with BHP Petroleum and 
Triton Energy. Further to this Matthew 
consulted and advised a range of clients 
including Chevron, Dana Petroleum and 
Marathon Oil on New Venture projects, 
both identifying targets and providing 
detailed prospect and basin evaluations 
and opportunity assessments. Subsequent 
to this, he played a major role in the 
acquisition of exploration acreage in 
Namibia, Oman, Senegal, Togo and 
Western Europe working for Hunt Oil. 
Julia Kemper
Senior Staff Geophysicist
Julia has more than 25 years of 
experience in the oil and gas industry 
having worked as a geophysicist for 
both BP and Shell and more recently as 
senior geophysicist with Hunt Oil and 
MND Exploration & Production. She  
has been involved in all aspects of 
geophysical work throughout her career 
and has been a formative part of, and 
had key roles in, New Venture divisions. 
Julia specialises in the development, 
interpretation and evaluation of 2D and 
3D seismic programmes as well as the 
assessment of new opportunities.  
She has a long track record working in 
Namibia and her knowledge of the 
country contributed to securing the 
offshore acreage for Hunt Oil in 2005.
George Canjar
Non-Executive Director
George has 30 years of experience in 
the oil industry and began his career at 
Shell having graduated with a Bachelor 
of Science in Geologic Engineering  
from the Colorado School of Mines.  
He subsequently worked for Royal 
Dutch/Shell Oil for 17 years, followed by 
Carrizo Oil & Gas as Vice President of 
Exploration and Development and more 
recently he was Executive Vice President 
and Chief Operating Officer for Davis 
Petroleum Corporation. His career has 
spanned a broad spectrum of the  
E & P sector involving all petroleum 
engineering and exploration disciplines 
as well as a variety of corporate activity. 
His expertise lies in deal structuring, 
portfolio development, risk analysis, and 
strategic modelling in addition to being 
the operational catalyst for bringing 
successful projects to first production. Chariot Oil & Gas Limited
Annual Report & Accounts 2010
14
Remuneration Committee
The Group’s Remuneration Committee comprises of Peter Kidney (Chairman), Robert Sinclair and Adonis Pouroulis.
The purpose of the Remuneration Committee is to:
make recommendations to the Board on an overall remuneration policy for Executive Directors and other senior executives  •	
in order to retain, attract and motivate high quality executives capable of achieving the Group’s objectives; and
demonstrate to shareholders that the remuneration of the Executive Directors of the Group is set by a committee whose •	
members have no personal interest in the outcome of their decision, and who will have due regard to the interests of  
the shareholders.
Procedures for developing policy and fixing remuneration
The Board fixes executive remuneration and ensures that no Director is involved in deciding his or her own remuneration.  
The Committee is authorised to obtain outside professional advice and expertise.
The Remuneration Committee is authorised by the Board to investigate any matter within its terms of reference. It is authorised 
to seek any information that it requires from any employee.
Details of the remuneration policy
The basic fees to be paid to the directors are recommended by the Remuneration Committee, and are subject to approval by 
the full Board.
Directors’ service agreements
All service agreements for directors are terminable by either party on six months’ notice.
Directors’ remuneration
The following remuneration comprising directors’ fees, share option charge and benefits in kind, were payable to directors during 
the year:
 
  Performance    
 Fees/ cash Share option Benefits Pension 2010 2009
 basic salary bonus valuation
(2)
 in kind
(1)
 contribution Total Total
 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
P Welch 188 – 125 1 – 314 –
K Broger
(4)
 238 – – 2 – 240 638
J Burgess 219 49 – – 4 272 350
A Pouroulis 71 – – – – 71 201
P Kidney 275
(3)
 – – – – 275 968
R Sinclair 20 – – – – 20 146
N Leighton
(4)
 14 – – – – 14 148
H Ndume 150 – – 6 – 156 459
Total 1,175 49 125 9 4 1,362 2,910
1 Benefits typically comprise private health care arrangements and permanent health insurance.
 Pension costs in 2009 in relation to Directors were US$4,000 (2009: US$ nil).
2  The IFRS 2, share option valuation charge relating to the Directors is US$125,000 (non-cash) (2009: US$2,175,000, of which US$368,000 worth have 
been reversed from the share-based payment reserve due to Kevin Broger’s options lapsing upon his resignation).
3 Includes US$204,000 for additional services during the year including work on the HRT contract dispute.
4 Directors who resigned during the year.
Directors’ interests in shares
The Directors who held office at the end of the year had the following interests in the issued share capital of the Group.
 
      2010 2009
P Welch      – –
J Burgess      2,250,000 2,250,000
A Pouroulis
(1)
      22,835,971 22,835,971
P Kidney      500,000 500,000
R Sinclair      – –
H Ndume
(2)
      2 1,376, 171 22,37 6,1 7 1
Total      47 ,963,592 48,963,592
1 Shares are held by Westward Investments Limited a Company which is owned by a discretionary trust of which A Pouroulis is one of a number of beneficiaries.
2 Shares are held by Protech Namibia (Pty) Limited of which H Ndume is the sole registered shareholder.
Directors’ Remuneration Report Chariot Oil & Gas Limited
Annual Report & Accounts 2010
15
Corporate Governan Ce Share options
The Group operates a share option scheme pursuant to which Directors and senior executives may be granted options to 
acquire ordinary shares in the Company at a fixed option exercise price. During the year, options were granted over a total of 
4,000,000 ordinary shares.
Further details of the above share option scheme and long-term incentive plan can be found in note 20.
Directors’ share options
The Directors who held office at the end of the financial year had the following interests in the share option scheme:
 
  Options  Options
  held at  Options held at
  1st March  granted 28th February Exercise Exercisable
  2009  in the year  2010 price (p) from Expiry date
P Welch  – 3,000,000 3,000,000 26.00 1 3 / 11 /2 0 11 1 3 / 11 /2 0 1 9
J Burgess  200,000 – 200,000 130.00 1 3/05/20 10 1 3/05/20 18
A Pouroulis  100,000 – 100,000 130.00 1 3/05/20 10 1 3/05/20 18
P Kidney  500,000 – 500,000 38.50 25/04/20 10 25/04/20 1 8
R Sinclair  100,000 – 100,000 130.00 1 3/05/20 10 1 3/05/20 18
H Ndume  250,000 – 250,000 130.00 1 3/05/20 10 1 3/05/20 18
Total  1,150,000 3,000,000 4,150,000 
No options were exercised during the year. Kevin Broger’s 300,000 options were cancelled upon his resignation on 15 June 
2009. Norman Leighton resigned on 10th October 2009, and he may exercise 100,000 options at a price of £1.30 per share, at 
the discretion of the Board. 
The interests of the Directors to subscribe for ordinary shares have not changed since the year end.
Significant shareholders
Westward Investments Limited       16.1%
Protech Namibia (Pty) Limited       15.1%
Citigroup       13.3%
Generali       5.6%
Baillie Gifford       5.1%
Libra Advisors       4.5%
Approximate percentage of ordinary shares not in public hands: 34 per cent.
By order of the Board
Peter Kidney 
Chairman of the Remuneration Committee Chariot Oil & Gas Limited
Annual Report & Accounts 2010
16
The Group supports the growing awareness of social, environmental and ethical matters when considering business practices. 
This statement provides an outline of the policies in place that guide the Group and its employees when dealing with social, 
environmental and ethical matters in the workplace.
Code of conduct
The Group maintains and requires the highest ethical standards in carrying out its business activities in regard to dealing with 
gifts, hospitality, corruption, fraud, the use of inside information and whistle-blowing.
Equal opportunity and diversity
The Group promotes and supports the rights and opportunities of all people to seek, obtain and hold employment without 
discrimination. It is our policy to make every effort to provide a working environment free from bullying, harassment, intimidation 
and discrimination on the basis of disability, nationality, race, sex, sexual orientation, religion or belief.
Employee welfare
The Group aims to assist employees at all levels to improve their professional abilities and to develop their skills.
The Group will practise manpower and succession planning in regard to the number and type of personnel resources that will 
be required in the future. Individual career progression activities are developed with this in mind.
Joint venture partners, contractors and suppliers
The Group is committed to being honest and fair in all of its dealings with partners, contractors and suppliers. The Group has a 
policy to provide clarity and protection, within its terms of business, to ensure the delivery and receipt of products and services  
at agreed standards. The Group also closely guards information entrusted to it by joint venture partners, contractors and 
suppliers, and seeks to ensure that it is never used improperly.
Operating responsibly and continuous improvement
The Group is committed to a proactive quality policy to ensure that stakeholders are satisfied with the Group’s results and the 
way in which the business operates and to promote continuous improvement in the overall operation of the Group. In pursuit  
of these objectives, the Group will use recognised standards and models as benchmarks for its management system.
Environmental policy
The Group adopts an environmental policy which sets standards which meet or exceed industry guidelines and host 
government regulations. This will be reviewed on a regular basis. As part of the environmental assessment, Chariot employed 
marine mammal observers to travel on board the seismic vessels. These observers were able to compile marine mammal and 
bird count statistics which will assist in the preparation of future environmental impact assessments. Social impacts will also form 
part of these assessments and preliminary work in this area will consider the impact of the Namibian coastline in the event that it 
becomes a petroleum province.
Social Responsibility Statement Chariot Oil & Gas Limited
Annual Report & Accounts 2010
17
Corporate Governan Ce Corporate Governance Statement
The Combined Code
Chariot Oil & Gas Limited’s shares are traded on AIM and as such, Chariot is not subject to the requirements of the Combined 
Code on corporate governance, nor is it required to disclose its specific policies in relation to corporate governance. The 
Directors, however, support high standards of corporate governance and will progressively adopt best practices in line with the 
Combined Code on Corporate Governance, so far as is practisable.
The Board of Directors operates within the framework described below.
The workings of the Board and its Committees
The Board of Directors
The Board meets frequently to consider all aspects of the Group’s activities. A formal schedule of matters reserved for the Board 
has been issued and approved and includes overall strategy and approval of major capital expenditure.
The Board consists of the Chairman, Chief Executive Officer, Executive Directors and Non-Executive Directors. All Directors have 
access to the advice and services of the Company Secretary and the Group’s professional advisers. Peter Kidney and George 
Canjar are independent Directors.
Remuneration Committee
The Remuneration Committee comprises Robert Sinclair, Adonis Pouroulis and is chaired by Peter Kidney. Its terms of reference 
are discussed in the Remuneration Report.  
Audit Committee
The Audit Committee comprises Peter Kidney (Chairman) and Adonis Pouroulis and Robert Sinclair. It meets at least twice  
each year and at any other time when it is appropriate to consider and discuss audit and accounting related issues. The Audit 
Committee is responsible for monitoring the quality of any internal controls and for ensuring that the financial performance of 
the Group is properly monitored, controlled and reported on. It also meets the Group’s auditors and reviews reports from the 
auditors relating to accounts and any internal control systems. 
Nomination Committee
The Nomination Committee comprises Peter Kidney, Robert Sinclair and is chaired by Adonis Pouroulis. The Committee is 
responsible for reviewing the structure, size and composition of the Board, preparing a description of the role and capabilities 
required for a particular appointment and identifying and nominating candidates to fill Board positions, as and when they arise.
Relations with shareholders
Communications with shareholders are given a high priority by the Board of Directors who take responsibility for ensuring that a 
satisfactory dialogue takes place. Directors plan to meet with the Company’s institutional shareholders following the announcement 
of interim and final results and at other appropriate times. The Directors are also in regular contact with stockbrokers’ analysts.  
The Company has developed a website containing investor information to improve communications with individual investors and 
other interested parties.
Internal control
The Directors acknowledge their responsibility for the Group’s system of internal controls and for reviewing its effectiveness. The 
system of internal control is designed to safeguard the Group’s assets and interests and to help ensure accurate reporting and to 
help ensure compliance with applicable laws and regulation. Despite the inherent limitations in any system of internal control the 
Board considers that the Group’s existing systems operated effectively throughout the year. Chariot Oil & Gas Limited
Annual Report & Accounts 2010
18
The Directors present their report together with the audited financial statements for the year ended 28th February 2010.
Results and dividends
The results for the year are set out on page 21.
The directors do not recommend payment of a final dividend (2009: nil).
Principal activity
The principal activity of the Group is that of oil and gas exploration.
Going concern
The Directors consider that the Group has adequate financial resources to enable it to continue in operation for the foreseeable 
future. For this reason they continue to adopt the going concern basis in preparing the financial statements.
Business review and principal risks and uncertainties
A full review of the Group’s activities during the year, recent events, and expected future developments and principal risks and 
uncertainties is contained within the Chairman’s Statement on pages 4 to 5. These pages form part of this Directors’ Report.
Key performance indicators
The key performance indicators of the Group are as follows:
 
      2010 2009
      US$’000 US$’000
Cash at bank at 28th February       16,226 28,850
Exploration expenditure       17,630 38,1 86
Financial instruments
Details of the use of financial instruments by the Group are contained in note 19 to the financial statements.
Directors
The Directors of the Company during the year were:
Paul Welch (CEO) Appointed 5th October 2009
Peter Kidney (Chairman) 
Kevin Broger (Chief Executive Officer) Resigned 15th June 2009
James Burgess (Executive Director) 
Heindrich Ndume (Executive Director) 
Norman Leighton (Non-executive Director) Resigned 9th October 2009
Adonis Pouroulis (Non-executive Director) 
Robert Sinclair (Non-executive Director)
Details of Directors’ interests in shares and share options are disclosed in the Remuneration Report on pages 14 and 15.
Report of the Directors Chariot Oil & Gas Limited
Annual Report & Accounts 2010
19
Corporate Governan Ce Directors’ responsibilities
The Directors are responsible for preparing the Directors’ Report and the financial statements for the Group in accordance with 
applicable Guernsey law and regulations.
Guernsey legislation requires the Directors to prepare financial statements for each financial year which give a true and fair view 
of the state of affairs of the Group and of the profit or loss of the Group for that year.
International Accounting Standard 1 requires that the financial statements present fairly for each financial year the Group’s 
financial position, financial performance and cash flows. This requires the faithful representation of the effects of transaction, 
other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses 
set out in the International Accounting Standards Board’s “Framework for the preparation and presentation of financial 
statements”. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRS. A fair 
presentation also requires the Directors to:
consistently select and apply appropriate accounting policies; •	
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and •	
understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to •	
understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial 
performance; and
prepare the financial statements on a going concern basis unless, having assessed the ability of the Group to continue as a •	
going concern, management either intends to liquidate the entity or to cease trading, or have no realistic alternative to do so.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time  
the financial position of the Group and to enable them to ensure that the financial statements comply with The Companies 
(Guernsey) Law 2008. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable  
steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the 
Group’s website. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions.
Auditors
All of the current Directors have taken all the steps they ought to have taken to make themselves aware of any information 
needed by the Company’s auditors for the purposes of their audit and to establish that the auditors are aware of that 
information. The Directors are not aware of any relevant audit information of which the auditors are unaware.
BDO LLP were appointed as auditors of the Company by the Directors. BDO LLP have expressed their willingness to continue in 
office and a resolution to re-appoint them as auditors will be proposed at the next general meeting.
By order of the Board
Artemis Secretaries Ltd
Secretary
28th May 2010 Chariot Oil & Gas Limited
Annual Report & Accounts 2010
20
To the members of Chariot Oil & Gas Limited
We have audited the financial statements of Chariot Oil & Gas 
Limited for the year ended 28th February 2010 which are set 
out on pages 21 to 24. These financial statements have been 
prepared under the historical cost convention and in 
accordance with the accounting policies set out on page 25.
This report is made solely to the Company’s members, as a 
body, in accordance with Section 262 of The Companies 
(Guernsey) Law, 2008. Our audit work is undertaken so that 
we might state to the Company’s members those matters we 
are required to state to them in an auditor’s report and for no 
other purpose. To the fullest extent permitted by law, we do 
not accept or assume responsibility to anyone other than the 
Company and the Company’s members as a body, for our 
audit work, for this report, or for the opinions we have formed.
Respective responsibilities of the directors  
and auditors
As described in the Statement of Directors’ Responsibilities 
within the Directors’ Report the Company’s directors are 
responsible for the preparation of the financial statements  
in accordance with applicable law and International  
Financial Reporting Standards (IFRS) as adopted by the 
European Union.
Our responsibility is to audit the financial statements in 
accordance with relevant legal and regulatory requirements 
and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial 
statements give a true and fair view and are properly prepared 
in accordance with The Companies (Guernsey) Law, 2008. 
We also report to you if, in our opinion, the Directors’ Report is 
not consistent with the financial statements, if the Company 
has not kept proper accounting records, if we have not 
received all the information and explanations we require for 
our audit, or if information specified by law is not disclosed.
We read the Directors’ Report and consider the implications 
for our report if we become aware of any apparent 
misstatements within it.
Independent Auditors’ Report
Basis of opinion
We conducted our audit in accordance with International 
Standards on Auditing (UK and Ireland) issued by the Auditing 
Practices Board. An audit includes examination, on a test basis, 
of evidence relevant to the amounts and disclosures in the 
financial statements. It also includes an assessment of the 
significant estimates and judgements made by the directors  
in the preparation of the financial statements, and of whether 
the accounting policies are appropriate to the Company’s 
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the 
information and explanations which we considered necessary 
in order to provide us with sufficient evidence to give 
reasonable assurance that the financial statements are free 
from material misstatement, whether caused by fraud or other 
irregularity or error. In forming our opinion we also evaluated 
the overall adequacy of the presentation of information in the 
financial statements.
Opinion
In our opinion the financial statements:
give a true and fair view, in accordance with International •	
Financial Reporting Standards as adopted by the  
European Union, of the state of the company’s affairs  
as at 28th February 2010 and of its loss for the year  
then ended; and
have been properly prepared in accordance with  •	
The Companies (Guernsey) Law, 2008.
BDO LLP
Chartered Accountants and Registered Auditors
London
28th May 2010 Chariot Oil & Gas Limited
Annual Report & Accounts 2010
21
Finan Cial Statement S
Consolidated statement of comprehensive income
For the year ended 28th February 20 10
 
      Year ended Year ended
      28th February  28th February
      2010 2009
     Note US$’000 US$’000
Provision for impairment of intangible assets      – (3,098)
Share-based payments      (195) (2,641 )
IPO costs expensed      – (1,842)
Other administrative expenses      (3,028) (3,217)
Total administrative expenses      (3,223) (10,798)
Loss from operations     4 (3,223) (10,798)
Finance income      97 2,039
Finance expense     7 – ( 1 9,8 11 )
Loss for the year before taxation      (3,126) (28,570)
Taxation expense     9 – –
Loss for the year attributable to the equity holders of the parent    (3,126) (28,570)
Other comprehensive income: 
Exchange differences on translating foreign operations     (56) (832)
Total comprehensive income attributable to the equity holders of the parent   (3,182) (29,402)
Loss per ordinary share – basic and diluted     10 US$(0.02) US$(0.22)
All amounts relate to continuing activities.
The notes on pages 25 to 36 form part of these financial statements. Chariot Oil & Gas Limited
Annual Report & Accounts 2010
22
Consolidated statement of changes in equity
For the year ended 28th February 20 10
 
       Total
       attributable
       to equity
  Share Share Other Exchange Retained holders or
  capital premium reserve reserve losses the parent
  US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
As at 29th February 2008  1,988 45,506 1,454 (353) (2,861) 45,734
Total comprehensive income for the year   – – – (832) (28,570) (29,402)
Convertible loan note conversion  – 1,1 1 1 (1,1 1 1) – – –
Issue of share capital  814 97,497 – – – 98,31 1
Issue costs  – (9,484) – – – (9,484)
Share-based payments  – (1,421) 4,062 – – 2,641
As at 28th February 2009  2,802 133,209 4,405 (1,185) (31,431) 107,800
Total comprehensive income for the year  – – – (56) (3,126) (3,182)
Share-based payments  – – 919 – – 919
Transfer of reserves due to lapsed options  – – (368) – 368 –
As at 28th February 2010  2,802 133,209 4,956 (1,241) (34,189) 105,537
The following describes the nature and purpose of each reserve within owners’ equity.
Share capital Amount subscribed for share capital at nominal value.
Share premium Amount subscribed for share capital in excess of nominal value.
Other reserve  Amount of proceeds on issue of convertible debt relating to the equity component and share-based 
payments reserve.
Retained earnings Cumulative net gains and losses recognised in the financial statements.
Exchange reserve Foreign exchange differences arising on translating into the reporting currency.
The notes on pages 25 to 36 form part of these financial statements. Chariot Oil & Gas Limited
Annual Report & Accounts 2010
23
Finan Cial Statement S
 
      28th February  28th February
      2010 2009
     Note US$’000 US$’000
Non-current assets
Exploration and appraisal costs     11 88,582 86,991
Property, plant and equipment     12 486 209
Total non-current assets      89,068 87,200
Current assets
Trade and other receivables     13 723 122
Cash and cash equivalents     14 16,226 28,850
Total current assets      16,949 28,972
Total assets      106,017 11 6, 1 72
Current liabilities
Trade and other payables     15 480 8,372
Total liabilities      480 8,372
Net assets      105,537 1 07,800
Capital and reserves attributable to equity holders of the parent
Share capital     16 2,802 2,802
Share premium account      133,209 133,209
Other reserve      4,956 4,405
Retained loss      (34,189) (31,431 )
Foreign exchange reserve      (1,241) ( 1,1 85)
Total equity      105,537 1 07,800
The financial statements were approved by the Board of Directors and authorised for issue on 28th May 2010.
Peter Kidney
Chairman
The notes on pages 25 to 36 form part of these financial statements.
Consolidated statement of financial position
At 28th February 20 10 Chariot Oil & Gas Limited
Annual Report & Accounts 2010
24
Consolidated cash flow statement
For the year ended 28th February 20 10
 
    Year ended  Year ended Year ended  Year ended
    28th February  28th February 28th February  28th February
    2010 2010 2009 2009
    US$’000 US$’000 US$’000 US$’000
Loss for the year before taxation     (3,126)  (28,570)
Finance income    (97)  (2,039) 
Finance expense    –  54 
IPO costs expenses    –  1,842 
Impairment    –  3,098 
Depreciation    11  47 
Foreign exchange differences    (189)  19,757 
Share-based payment expense    195  2,641 
     (80)  25,400
Net cash flow from operating activities before changes in working capital  (3,206)  (3,1 70)
(Increase) in trade and other receivables     (601)  ( 11 4)
(Decrease) in trade and other payables     (7,892)  (504)
Net cash (outflow) from operating activities     (1 1,699)  (3,788)
Investing activities
Finance income    97  2,039 
Payments in respect of property, plant and equipment   (403)  (100) 
Payments in respect of intangible assets    (16,847)  (31,375) 
Proceeds in respect of intangible assets    16,039   – 
Cash outflow used in investing activities     (1,1 14)  (29,436)
  
Financing activities
Proceeds from issue of Convertible Loan notes    –  1,992 
Issue of ordinary share capital    –  88,847 
Issue costs relating to share capital    –  (9,484) 
Repayment of borrowings    –  (3,052) 
Net cash flow from financing activities     –  78,303
Net (decrease)/increase in cash and cash equivalents in the year   (12,813)  45,079
Cash and cash equivalents at start of year     28,850  3,528
Effect of foreign exchange rate changes on cash and cash equivalents   189  ( 19,757)
Cash and cash equivalents at end of year (note 14)    16,226  28,850
  
The notes on pages 25 to 36 form part of these financial statements. Chariot Oil & Gas Limited
Annual Report & Accounts 2010
25
Finan Cial Statement S
1 General information
Chariot Oil & Gas Limited is a Company incorporated and domiciled in Guernsey with registration number 47532. The address 
of the registered office is Sydney Vane House, Admiral Park, St Peter Port, Guernsey, GY1 3EL. The Company’s administrative & 
head office is in Guernsey. The nature of the Company’s operations and its principal activities are set out in the Directors’ Report 
and in the Review of Operations and the Financial Review.
The functional and presentational currency of the Group is US dollars (US$).
2 Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS and IFRIC 
interpretations), as issued by the International Accounting Standards Board (IASB), as adopted by the European Union.
In accordance with the provisions of section 244 of the Companies (Guernsey) Law 2008, the Group has chosen to only report 
the Group’s consolidated position hence separate Company only financial statements are not presented.
The financial statements are prepared under the historical cost accounting convention on a going concern basis.
Going concern
The Directors are of the opinion that the Group has adequate financial resources to enable it to undertake its planned 
programme of exploration and appraisal activities over the forthcoming 12 months.
New accounting standards
Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for the 
Groups accounting periods beginning on or after 1st March 2010 or later periods and which the Group has decided not to adopt 
early. These are:
The IASB and IFRIC have issued the following standards and interpretations:
The following were amendments to published standards and interpretations to existing standards effective in the 
year adopted by the Group.
 Effective date
International Accounting Standards (IAS/IFRS) (periods beginning on or after)
IAS 1 Amendment – Presentation of financial statements: a revised presentation 1st Jan 2009 •	
IAS 23 Amendment – Borrowing costs 1st Jan 2009 •	
IFRS 2 Amendment – Share-based payment: vesting conditions and cancellations 1st Jan 2009 •	
IFRS 7 Amendment – Improving Disclosures about Financial Instruments 1st Jan 2009 •	
 Improvements to IFRSs (2009) 1st Jan 2009 •	
Notes forming part of the financial statements for the year ended 28th February 2010
New standards effective in the year relevant to the Group:
IFRS 8 Operating Segments 1st Jan 2009 •	
The adoption of IFRS 8 and the amendment to IAS 1 and IFRS 7 affected the presentation and disclosure of the financial 
statements. The amendment to IAS 23 and IFRS 2 did not have any financial effect in the year. Where appropriate the 
accounting policies of the Group have been updated to reflect the required amendments.
Standards, interpretations and amendments to published standards effective in the year but which are not 
relevant to the Group:
 Effective date
International Accounting Standards (IAS/IFRS) (periods beginning on or after)
IFRS1 and  Amendments – Cost of an Investment in a subsidiary, jointly controlled entity or associate •	
IAS 27   1st Jan 2009 •	
IFRS 2 Amendment – Vesting conditions and cancellations  1st Jan 2009 •	
IFRIC 13 Customer loyalty programmes 1st Jul 2008 •	
IAS 39/IFRS7 Reclassification of financial instruments – Effective date and transition  1st Jul 2008 •	
IFRIC 16 Hedges of a Net Investment in a Foreign Operation 1st Oct 2008 •	
IAS 32 and 1 Amendments – Puttable financial instruments and obligations arising on Liquidation 1st Jan 2009 •	
IFRIC 15 Agreements for the Construction of Real Estate 1st Jan 2009 •	
IFRS 1 First-time adoption of international accounting standards  1st Jan 2009 •	
Notes forming part of the financial statements
For the year ended 28th February 20 10 Chariot Oil & Gas Limited
Annual Report & Accounts 2010
26
2 Accounting policies continued
Standards, interpretations and amendments, which are effective for reporting periods beginning after the date of 
these financial statements:
 Effective date
International Accounting Standards (IAS/IFRS) (periods beginning on or after)
IFRIC9 and  Amendments – Embedded derivatives •	
IAS 39   30th Jun 2009 •	
IAS 27 Amendment – Consolidated and separate financial statements 1st Jul 2009 •	
IAS 39 Amendment – Recognition and measurement: Eligible hedged items 1st Jul 2009 •	
IFRS 3 Revised – Business combinations 1st Jul 2009 •	
IFRIC 17 Distributions of non-cash assets to owners 1st Jul 2009 •	
IFRIC 18 Transfers of assets from customers  1st Jul 2009 •	
IFRS 1* Additional exemptions for first-time adopters  1st Jan 2010 •	
IFRS 2* Amendment – Group Cash-settled Share-Based payment transactions 1st Jan 2010 •	
IAS32 Amendment – Classification of Rights Issues 1st Feb 2010 •	
IFRIC19* Extinguishing Financial Liabilities with Equity Instruments 1st Apr 2010 •	
 Improvements to IFRSs (2009)* generally 1st Jan 2010 •	
IAS24* Revised – Related party disclosures 1st Jan 201 1 •	
IFRIC 14*  Amendment to IFRIC 14 – IAS 19 Limit on a defined benefit asset,  •	
Minimum funding requirements and their interaction 1st Jan 201 1
IFRS9* Financial instruments 1st Jan 2013 •	
Except for the adoption of IFRS 3 Revised, which would materially affect the presentation and financial impact of a business 
combination, the above standards, interpretations and amendments will not significantly affect the Group’s results or financial 
position. The adoption of IFRS 9 will eventually replace IAS 39 in its entirety and consequently may have a material affect on the 
presentation, classification, measurement and disclosures of the Group’s financial instruments.
Items marked* had not yet been endorsed by the European Union at the date that these financial statements were approved 
and authorised for issue by the Board.
The Directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact 
on the financial statements of the Group. There will be additional presentational and disclosure impacts affecting the 
presentation of the financial statements.
Intangible fixed assets
The Group applies the full-cost method of accounting under which all expenditure relating to the acquisition, exploration, 
appraisal and development of oil and gas interests, including an appropriate share of directly attributable overheads, is capitalised 
within cost pools. Capitalised costs are amortised on a unit of production basis. The Board regularly reviews the carrying values 
of intangible assets and writes down capitalised expenditure to levels it considers to be prudent. Costs pools are determined on 
the basis of geographical principles. The Group currently has one cost pool, relating to offshore exploration interests in Namibia.
Taxation
Income tax expense represents the sum of the current tax and deferred tax charge for the period.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and 
the corresponding tax bases, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised 
for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits 
will be available against which deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer 
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that have been enacted or substantially enacted and are expected to apply in the year 
when the liability is settled or the asset realised. Deferred tax is charged or credited to the income statement, except when it 
relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current 
tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its 
current tax assets and liabilities on a net basis.
Notes forming part of the financial statements continued
For the year ended 28th February 20 10 Chariot Oil & Gas Limited
Annual Report & Accounts 2010
27
Finan Cial Statement S
2 Accounting policies continued
Foreign currencies
Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in  
which they operate (“their functional currency”) are recorded at the rates ruling when the transactions occur. Foreign currency 
monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the 
retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss, except for foreign currency 
borrowings qualifying as a hedge of a net investment in a foreign operation, in which case exchange differences are recognised 
in other comprehensive income and accumulated in the foreign exchange reserve.
When a gain or loss on a non-monetary item is recognised in other comprehensive income, any exchange component of that 
gain or loss shall be recognised in other comprehensive income. Conversely, when a gain or loss on a non-monetary item is 
recognised in profit or loss, any exchange component of that gain or loss shall be recognised in profit or loss.
On consolidation, the results of overseas operations are translated into US dollar at rates approximating to those ruling when the 
transactions took place. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those 
operations, are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net 
assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income and 
accumulated in the foreign exchange reserve.
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost or fair value on acquisition less depreciation. Depreciation is provided on a 
straight line basis at rates calculated to write off the cost less the estimated residual value of each asset over its expected useful 
economic life. The residual value is the estimated amount that would currently be obtained from disposal of the asset if the 
asset were already of the age and in the condition expected at the end of its useful life.
Property, plant and equipment are depreciated using the straight line method over their estimated useful lives over a range of 
2.5–5 years.
The carrying value of tangible fixed assets is assessed annually and any impairment charge is charged to the income statement.
Leases
Rent paid on operating leases is charged to the income statement on a straight line basis over the term of the lease.
Share-based payments
Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the 
consolidated income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the 
number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised 
over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the 
fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the 
market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options,  
measured immediately before and after the modification, is also charged to the consolidated income statement over the 
remaining vesting period.
Where equity instruments are granted to persons other than employees, the consolidated income statement is charged with the 
fair value of goods and services received. Where the equity instruments are granted for goods and services are capital in nature, 
the fair value is changed to the intangible asset value.
Basis of consolidation
Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or 
business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present 
the results of the Company and its subsidiaries (“the Group”) as if they formed a single entity. Intercompany transactions and 
balances between the Group companies are therefore eliminated in full.
Financial instruments
The Group’s financial assets consist of current account or short-term deposits at variable interest rates, loans and other 
receivables. Any interest earned is accrued and classified as interest. Trade and other receivables are stated initially at fair value 
and subsequently at amortised cost.
The Group’s financial liabilities consist of trade and other payables. All are non-derivative assets. The trade and other payables are 
stated initially at fair value and subsequently at amortised cost.  Chariot Oil & Gas Limited
Annual Report & Accounts 2010
28
2 Accounting policies continued
Joint arrangements
Joint arrangements are those in which the Group has certain contractual agreements with other participants to engage in joint 
activities that do not create an entity carrying on a trade or business on its own. The Group includes its share of assets, liabilities, 
and cash flows in joint arrangements, measured in accordance with the terms of each arrangement, which is usually pro rata to 
the Group’s interest in the joint arrangement. The Group’s exploration, development and production activities are generally 
conducted jointly with other companies in this way.
 
Critical accounting estimates and judgements 
The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based 
on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the 
circumstances. In the future, actual experience may deviate from these estimates and assumptions. The estimates and 
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within 
the next financial year are as follows:
 
Recoverability of intangible assets
Under the full cost based method of accounting, the Group capitalises exploration costs until it is capable of determining 
whether its exploration efforts were successful and, if they were successful, whether any impairment charges may be required to 
bring the net book values of assets in line with their economic values.
Impairment review
The carrying amounts of the Group’s assets are reviewed at each balance sheet date and, if there is any indication that an asset 
may be impaired, its recoverable amount is estimated. The recoverable amount is the higher of its net selling price and its value 
in use. 
Estimates on impairment are limited to an assessment by the Directors of any events or changes in circumstance that would 
indicate that the carrying value of the asset may not be recoverable. 
Any impairment loss arising from the review is charged to administrative expenses whenever the carrying amount of the asset 
exceeds its recoverable amount.
Share-based payments
Directors best estimate of the valuations underlying the share-based payments are based on assumptions made by Directors 
using updated models previously prepared by external consultants. See note 20 for further details of these assumptions.
3 Segmental analysis
In the opinion of the Directors, the operations of the Group companies comprise one single class of business including oil  
and gas exploration. The Group operates in one geographic area, Namibia. The financial information presented reflects all the 
activities of this single business.
2010
 
     Exploration of 
     oil and gas Corporate Total
     US$000 US$000 US$000
Administrative expenses     (1,629) (1,594) (3,223)
Loss after taxation     (1,629) (1,497) (3,126)
Non-current assets     88,913 155 89,068
Total assets     89,158 16,859 106,017
Total liabilities     (52) (428) (480)
2009
 
     Exploration of 
     Oil and Gas Corporate Total
     US$000 US$000 US$000
Administrative expenses     (3,747) (7,051) (10,798)
Loss after taxation     (1 1,197) (17,393) (28,570)
Total assets     87,200 28,972 1 16,172
Total liabilities     (3,050) (5,322) (8,372)
Notes forming part of the financial statements continued
For the year ended 28th February 20 10 Chariot Oil & Gas Limited
Annual Report & Accounts 2010
29
Finan Cial Statement S
4 Loss from operations
 
      28th February  28th February
      2010 2009
      US$’000 US$’000
Loss from operations is stated after charging/crediting:
Depreciation      11 47
Share-based payments – share option scheme (all equity settled)    145 2,641
Share-based payments – long-term incentive scheme (all equity settled)    50 –
Pre licence acquisition expenditure      – 383
AIM admission costs expensed      – 1,842
Professional and consultancy fees      853 825
Auditors’ remuneration:
Fees payable to the Company’s auditors for the audit of the Company’s annual accounts   50 45
Audit of the Company’s subsidiaries pursuant to legislation     27 
Fee payable to the auditor for corporate finance services     – 212
Total payable      77 257
Fees payable for corporate finance services in 2009 include an amount of US$150,000 set against the share premium account.
5 Leases commitments
 
      28th February  28th February
      2010 2009
      US$’000 US$’000
Not later than one year      214 –
Later than one year and not later than five years      378 –
Later than five years      – –
6 Employees
 
      28th February  28th February
      2010 2009
      US$’000 US$’000
Directors fees and emoluments      617 309
Wages and salaries – staff costs      719 275
Amounts paid to third parties in respect of Directors’ services     401 426
Share-based payments expense (note 20)      195 2,641
Social security costs      20 20
      1,952 3,671
Included in the Directors fees is an amount of US$292,600 (2009: US$1 18,000) in respect of capitalised exploration costs, 
included in wages and salaries is an amount of US$121,000 (2009: US$216,000) in respect of capitalised exploration costs. 
Included in the amounts paid to third parties in respect of Director’s services is an amount of US$204,000 (2009: US nil) in 
respect of capitalised exploration costs.
7 Finance income and expense
 
      28th February  28th February
      2010 2009
      US$’000 US$’000
Bank interest receivable      97 2,039
Other finance expense      – (54)
Foreign exchange gain/(loss)      189 (19,757)
Net finance gain/(expense)      286 (17,772) Chariot Oil & Gas Limited
Annual Report & Accounts 2010
30
8 Investment
The Company’s directly (*) and indirectly (**) held subsidiary undertakings at 28th February 2010 are:
 
   Percentage of
  Country of ordinary share
Subsidiary undertaking Principal activity incorporation capital held
Enigma Oil and Gas Exploration (Pty) Limited** Oil and Gas exploration Namibia 100%
Chariot Oil and Gas Investments (Namibia) Limited* Holding Company Guernsey 100%
Chariot Oil and Gas Statistics Limited*
(1)
 Services Company UK 100%
Enigma Petroleo Y Gas N.V.** Holding Company Dutch Antilles 100%
1 Chariot Oil and Gas Statistics Limited was acquired on 3rd December 2009.
9 Taxation
The Company is tax resident in Guernsey, where corporate profits are taxed at zero per cent.
No taxation charge arises in Namibia as the Namibia subsidiary has recorded a taxable loss for the period.
Factors affecting the tax charge for the current period
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in Guernsey 
applied to profits for the year are as follows:
 
      Year ended Year ended
      28th February  28th February
      2010 2009
      US$’000 US$’000
Tax reconciliation
Loss on ordinary activities for the year before tax      (3,126) (28,570)
Loss on ordinary activities at the standard rate of corporation tax in Guernsey of 0% (2009: 0%)  – –
Difference in tax rates in local jurisdictions at the applicable tax rate of 35% (2009: 35%)  (1,366) (2 41 )
Disallowable expenses      – 1
Deferred tax effect not recognised      1,366 240
Total taxation charge      – –
Deferred tax not recognised in respect of losses carried forward in Namibia total US$1,120,909 (2009: US$498,576). The 
Company had tax losses carried forward on which no deferred tax asset is recognised. Deferred tax assets were not recognised 
as there is uncertainty regarding the timing of future profits against which these assets could be utilised.
Namibian taxation and royalties
Normal taxation
The petroleum income tax is payable annually at a rate of 35 per cent of the taxable income received by or accrued to any 
person from a license area in connection with exploration, development or production operations in that area. Each licence area 
is assessed separately and losses in one cannot be set off against profits in another.
Additional profits tax
In addition to the above tax, annually there will be paid an additional profits tax (“APT”). APT shall be payable at the end of each 
tax year on each petroleum licence area and determined on the basis of the rate of return on the project. It is levied on the 
project’s net cash receipt, the after tax net cash flow achieved above certain defined tiers of threshold rate of return on the 
project. The first tier rate of APT is 25 per cent. 
10 Loss per share
The calculation of basic loss per ordinary share is based on a loss of US$3,126,000 (2009: loss of US$28,570,000) and on 
141,173,471 ordinary shares (2009: 132,261,953), being the weighted average number of ordinary shares in issue during the 
year. Potentially dilutive options are detailed in note 20, however these are anti-dilutive as the Group reported a loss for the year 
consequently a separate diluted loss per share has not been presented. 
Notes forming part of the financial statements continued
For the year ended 28th February 20 10 Chariot Oil & Gas Limited
Annual Report & Accounts 2010
31
Finan Cial Statement S
11 Exploration and appraisal costs by cost pool
 
     Namibia Namibia US$000’s
     Onshore Offshore Total
     US$’000 US$’000 US$’000
Cost and net book value
At 1st March 2008     1,970 49,933 51,903
Additions     1,128 37,058 38,186
Impairment charge for the period     (3,098) – (3,098)
At 1st March 2009     – 86,991 86,991
Additions     – 17,630 17,630
Farm in proceeds      – (16,039) (16,039)
At 28th February 2010     – 88,582 88,582
During 2009, after review of the results of the aeromagnetic survey the Directors considered the carrying value of the on-shore 
assets to be nil, therefore an impairment charge of US$3,098,000 was charged to the income statement in 2009 representing 
all the costs incurred on the onshore licences to date. This view was taken given the expected recoverable prospects of this 
licence which was subsequently relinquished. 
The Group signed a farm-out agreement with Petrobras for a 50 per cent stake in one of the four licences offshore in Namibia; 
Block 2714A. This agreement included a payment of US$16.04m which has been paid in full.
12 Property, plant and equipment
 
      Fixtures, Fixtures,
       fittings and  fittings and
      equipment equipment
      year ended year ended
      28th February  28th February
      2010 2009
      US$’000 US$’000
Cost
At 1st March      256 156
Additions      403 100
At 28th February      659 256
Depreciation
At 1st March      47 –
Charge for the year      126
(1)
 47
At 28th February      173 47
Net book value       486 209
1 US$1 15,000 of the depreciation charge relates to oil exploration activities and has been capitalised to exploration and appraisal costs during the year
13 Trade and other receivables
 
      28th February  28th February
      2010 2009
      US$’000 US$’000
Other receivables and prepayment      723 122
 
      28th February  28th February
      2010 2009
      US$’000 US$’000
Amounts due:
Under three months      350 53
Between three and six months      – 57
Over six months      373 12
      723 122 Chariot Oil & Gas Limited
Annual Report & Accounts 2010
32
14 Cash and cash equivalents
 
      28th February 28th February
      2010 2009
      US$’000 US$’000
Analysis by currency
Sterling balance      279 2,665
Namibian dollar balance      42 7
Restricted cash balance (sterling)      – 4,630
US dollar balance      15,905 21,548
      16,226 28,850
The restricted cash balance in 2009 relates to funds placed by the Group in a jointly managed deposit account to provide 
Wavefield Inseis (the service provider for the 3D seismic data acquisition) settlement of their monthly invoices. Funds were 
released upon approval of periodic invoices with the bank mandated to accept payment instructions only on signature receipt 
from both a group director and the service provider. The full amount shown as restricted cash above was released to settle final 
payments relating to the completion of the seismic acquisition within 30 days of the prior year’s balance sheet date.
15 Trade and other payables
 
      28th February  28th February
      2010 2009
      US$’000 US$’000
Trade payables      139 6,696
Accruals      279 1,676
Amounts due to related parties      62 –
      480 8,372
 
      28th February  28th February
      2010 2009
      US$’000 US$’000
Amounts payable
Under three months      480 5,429
Between three and six months      – 2,943
After six months      – –
      480 8,372
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.
16 Share capital
 
 Authorised
   28th February 28th February  28th February 28th February
   2010 2010 2009 2009
   Number US$’000 Number US$’000
Ordinary shares of US$0.02 (1p) each  400,000,000 2,984 400,000,000 2,984
 
 Allotted, called up and fully paid
   28th February 28th February  28th February 28th February
   2010 2010 2009 2009
   Number US$’000 Number US$’000
Ordinary shares of US$0.02 (1p) each  141,173,471 2,802 141,173,471 2,802
The shares have a nominal value of 1p. The share capital has therefore been translated at the historic rate of US$:GBP of 1.995.
Notes forming part of the financial statements continued
For the year ended 28th February 20 10 Chariot Oil & Gas Limited
Annual Report & Accounts 2010
33
Finan Cial Statement S
16 Share capital continued
Details of the ordinary shares issued to date up to 28th February 2010 are given in the table below:
 
Date Description    Price US$ Number of shares
1st March 2008 Opening balance     100,000,000
19th May 2008 Placing of shares to provide working capital  2.58 34,615,000
19th May 2008 Conversion of loan notes    1.29 846,154
19th May 2008 Conversion of loan notes    1.29 5,712,317
At 28th February 2009 and 2010       141,173,471
17 Capital commitments
At the balance sheet date the Group had entered into capital commitments of US$1.05m (2009: US$7.1m).
18 Related party transactions
The Group has entered into various transactions in which ICM, Westward and Protech are interested parties. ICM, Protech and 
Westward own 0 per cent, 15.1 per cent and 16.2 per cent (2009: 18 per cent, 16.2 per cent and 15.9 per cent respectively) of 
the issue ordinary shares. Norman Leighton, whom held office during the year, is a Director of ICM. Adonis Pouroulis, one of the 
Directors, is one of a number of potential beneficiaries of the trust that owns Westward. Robert Sinclair, one of the Directors, is a 
Director of Westward. Protech is wholly owned by Heindrich Ndume, one of the Directors. 
Details of Directors and key management personnel related party transactions are detailed below. The key management 
personnel are considered to be the Directors, see note 6 for details of their remuneration.
No funding was provided by Westward to pay exploration costs on behalf of Enigma during the year (2009: US$1.7m). •	
No funding was provided by ICM during the year (2009: US$1.4m). •	
Westward Investments Limited, a Company of which Mr Robert Sinclair is a Director and is owned by a discretionary trust of •	
which Mr Adonis Pouroulis is one of a number of beneficiaries, provides services and facilities for the Group and received fees 
totalling approximately US$69,200 for the period. (2009: US$10,581). There were no fees outstanding at the year end 
(2009: US$ nil).
J&K Property Investments Limited a company owned as to 50 per cent by James Burgess and of which he is a Director, •	
provided services and facilities for the Group in the prior year and received fees totalling US$14,437 in 2009. There were no 
fees outstanding at the end of 2009.
Pursuant to an agreement dated 1 October, 2007, Artemis Trustees Limited, a company of which Mr Robert Sinclair is a •	
Director and ultimately a shareholder, was appointed by the Company to provide administration secretarial services. Fees are 
chargeable on a time spent basis, calculated by reference to the time, work type and skills involved in providing the services. 
The fees paid for the period totalled US$177,145 (2009: US$303,009). The amount outstanding at the year end was 
US$15,224 (2009: US$26,1 1 1).
Chromex Mining PLC, a company of which Mr James Burgess and Robert Sinclair are Directors, provides services and facilities •	
for the Group and received fees totalling approximately US$29,597 for the period (2009: US$21,521). The amount 
outstanding at the year end was US$10,496 (2009: US$ nil).
Aladar Resources Limited a company of which Mr Kevin Broger is a Director and majority owner, provided services and •	
facilities for the Group and received fees totalling approximately US$67,463 for the period (2009: US$31,723). There were no 
fees outstanding at the year end (2009: US$ nil).
Fintragh Trading and Consulting Limited, a company of which Peter Kidney is a Director provided professional services for the •	
Group and received fees totalling approximately US$178,919 (2009: US$ nil). There was US$24,947 outstanding at the year 
end (2009: US$ nil).
By deed of assignment dated 7 May 2008, the Company consented to the assignment by BMO to Sirius Investment •	
Management LLP Incorporated of warrants exercisable over a number of ordinary shares calculated by dividing US$63,924 
(£44,556) by 50 per cent of the Placing Price. No further warrants were issued to Sirius Investment Management LLP during 
this year.  Chariot Oil & Gas Limited
Annual Report & Accounts 2010
34
19 Financial instruments
The Board of Directors determine, as required, the degree to which it is appropriate to use financial instruments or other hedging 
contracts or techniques to mitigate risk. Throughout the year ending 28th February 2010 no trading in financial instruments was 
undertaken (2009: nil).
There is no material difference between the book value and fair value of the Group cash balances, short-term receivables 
and payables.
Market risk
Market risk arises from the Group’s use of interest bearing and foreign currency financial instruments. It is the risk that future cash 
flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), and foreign exchange rates 
(currency risk). Throughout the period the Group has held surplus funds on deposit, principally with its main bankers Barclays, 
on fixed short-term deposits covering periods of one week to three months monitoring rates of return whilst assuring the ability 
to meeting working capital requirements.
The Directors have not disclosed interest rate sensitivity analysis on the Group’s financial assets and liabilities at the year end as 
the risk is not deemed to be material.
The Group’s treasury policy is that all significant cash balances are held in the parent company. Therefore the market risk is not 
deemed significant in any of the subsidiary undertakings.
Currency risk
The Group has very limited currency exposure in respect of items denominated in foreign currencies comprising:
Transactional exposure in respect of operating costs and capital expenditure incurred in currencies other than the functional •	
currency of operations.
This risk is managed with funds being held principally in US dollars to recognise the trading currency of the industry with a limited 
balance maintained in sterling and Namibian dollars to meet ongoing corporate and overhead commitments.
At the year end, the Group had cash balances of US$16.2m as detailed in note 14.
Other than the non US$ cash balances descried in note 14 no other financial instrument is denominated in a currency other 
than US dollars. A 10 per cent adverse movement in exchange rates would lead to an increase in the foreign exchange loss of 
US$32,100 and a 10 per cent favourable movement in exchange rates would lead to a corresponding reduction, the effect on 
net assets would be the same as the effect on profits (2009: US$250,500).
Restricted cash balances are detailed in note 14.
Capital
The Company considers its capital to comprise its ordinary share capital, share premium and retained earnings as well as the 
share-based payments reserve (“Other reserve”).
In managing its capital, the Group’s primary objective is to maintain a sufficient funding base to enable the Group to meet its 
working capital and strategic investment needs. The Group has met its work programme commitments and with the receipt of 
the farm in proceeds, the Group currently holds sufficient capital to meet its ongoing needs for the next 12 months.
Liquidity risk
The Group’s practice is to regularly review cash needs and to place excess funds on fixed term deposits for periods not 
exceeding three months with an institution that are top band rated by Standard & Poors. 
The Group has sufficient funds to continue operations for the forthcoming year and has no perceived liquidity risk.
20 Share-based payments
Share Option Scheme
During the year, the Company operated the Chariot Oil & Gas Share Option Plan (“Share Option Scheme”). The Company 
recognised total expenses (all of which related to equity settled share-based payment transactions) under the plan of:
 
      28th February 28th February
      2010 2009
      US$’000 US$’000
Share Option Scheme      145 2,641
Notes forming part of the financial statements continued
For the year ended 28th February 20 10 Chariot Oil & Gas Limited
Annual Report & Accounts 2010
35
Finan Cial Statement S
20 Share-based payments continued
The Option Plan provides for an exercise price equal to the closing market price of the Company shares on the date of the grant. 
The options expire if they remain unexercised after the exercise period has lapsed. For options valued using the Black-Scholes 
model there are no market performance conditions or other vesting conditions attributed to the options.
The following table sets out details of all outstanding options granted under the Share Option Scheme.
 
      Options Options
      Number Number
      28th February  28th February
      2010 2009
      US$’000 US$’000
Outstanding at beginning of year      1,840,000 –
Granted during the year      4,000,000 1,840,000
Forfeited during the year
(1)
      (300,000) –
Outstanding at the end of the year      5,540,000 1,840,000
1 These options relate to those that were forfeited by a Director who resigned during the year.
The range of the exercise price of share options exercisable at the year end falls between US$0.38 (25p) – US$1.98 (130p), 
(2009: US$0.55 (38.5p) – US$1.87 (130p)).
The weighted average share price at the date of exercise US$0.39 (26p), using exchange rate of £ = US$ 1.5224.  
(2009: US$1.37 (95p), using exchange rate of £ = US$ 1.4347).
The estimated fair values of options which fall under IFRS 2, and the inputs used in the Black-Scholes model to calculate those 
fair values are as follows:
 
 Estimated   Expected   Expected
Date of grant fair value Share price Exercise price volatility Expected life Risk free rate dividends
28th April 2008 £0.98 £1.21 £0.385 32% 10 years 4.94% 0%
27th March 2008 £0.62 £1.21 £1.30 32% 10 years 4.94% 0%
13th November 2009 £0.17 £0.26 £0.26 80% 5 years 4.3% 0%
15th January 2010 £0.19 £0.28 £0.25 80% 5 years 4.3% 0%
Expected volatility was determined by calculating the annualised standard deviation of the daily changes in the share price.
Long-term incentive scheme
The Plan provides for the awarding of shares to employees. The award will lapse if an employee leaves employment. 
During the year 1,531,427 awards were granted to employees, none of whom are Directors of any Group company. The shares 
will vest in equal instalments over a three year period.
 
       Share price (p)
Date of grant       at grant date
1st December 2009       25.4
15th January 2010       27.38
8th February 2010       33.70
10th February 2010       36.81
Total       
The Company recognised total expenses (all of which related to equity settled share-based payment transactions) under the 
plan of:
 
      28th February  28th February
      2010 2009
      US$’000 US$’000
Long-term incentive scheme      50 –
  Chariot Oil & Gas Limited
Annual Report & Accounts 2010
36
20 Share-based payments continued
Warrants
The following table sets out details of all outstanding warrants.
 
    28th February 28th February  28th February 28th February
    2010 2010 2009 2009
    Number of Fair value Number of Fair value
    warrants US$’000 warrants US$’000
Outstanding at beginning of year    2,996,019 1,765 130,224 344
Granted during the year    2,614,036 723 2,865,795 1,421
Outstanding at the end of the year    5,610,055 2,488 2,996,019 1,765
The range of the exercise price of warrants outstanding at the year end falls between US$0.46 (30p) – US$1.87 (130p),  
(2009: US$0.93 (65p) – US$1.87(130p)).
The weighted average share price at the date of exercise is US$0.46 (30p) using exchange rate of £ = US$ 1.5224  
(2009: US$1.77 (124p), using exchange rate of £ = US$ 1.4347).
The warrants issued during the year were a part of the fee for the Facilitator of the farm-out agreement with Petrobras and the 
cost is capitalised within exploration and appraisal cost. In 2009, the warrants were issued to the Company’s brokers and the 
cost set against the share premium account.
Since the year end, 2,653,281 warrants lapsed and 342,738 warrants were exercised therefore at the date of this report 
2,614,036 warrants are outstanding.
The estimated fair values of warrants which fall under IFRS 2, and the inputs used in the Black-Scholes model to calculate those 
fair values are as follows:
 
 Estimated   Expected   Expected
Date of grant fair value Share price Exercise price volatility Expected life Risk free rate dividends
13th February 2008 £1.33 £2.50 £0.65 32% 2.3 years 4.94% 0%
27th March 2008 £0.62 £1.21 £0.65 32% 2.1 years 4.94% 0%
25th April 2008  £0.21 £1.205 £1.30 32% 2.1 years 4.94% 0%
19th May 2009 £0.18 £0.34 £0.30 95% 2 years 1.03% 0%
Expected volatility was determined by calculating the annualised standard deviation of the daily changes in the share price.
For warrants valued using the Black-Scholes model there are no market performance conditions or other vesting conditions 
attributed to the warrants.
21 Contingent liabilities
There are no outstanding contingent liabilities as at 28th February 2010.
22 Post balance sheet events
On 20th May 2010, pursuant to an assignment of warrants to dated 7th May 2008 Sirius Investment Management LP 
Incorporated (“Sirius”) exercised its entitlement to purchase 68,547 new ordinary shares of 1 pence each in the capital of the 
Company at a price of 65 pence per share.
On 27th May 2010, pursuant to two Deed of Warrant Grants between the Company and BMO Capital Markets (“BMO”) dated 
13th February and 27th March 2008 respectively the Company received valid notice on 19th May 2010 from BMO Nesbitt 
Burns Inc that it intended to exercise its entitlement to purchase 274,191 new ordinary shares of 1 pence each in the capital of 
the Company at a price of 65 pence per share. Accordingly, the Company has issued and allotted 274,191 new ordinary shares 
to BMO Nesbitt Burns Inc (following a transfer from BMO further to a Power of Attorney dated 12th May 2009).
 
Notes forming part of the financial statements continued
For the year ended 28th February 20 10 Company Overview
01 Highlights
02 At a Glance
04 Chairman’s Statement
06 Chief Executive Officer’s Report
08 Review of Operations
12  Board of Directors and  
Senior Technical Team
Corporate Governance
14 Directors’ Remuneration Report
16 Social Responsibility Statement
17 Corporate Governance Statement
18 Report of the Directors
20 Independent Auditors’ Report
 
Financial Statements
21  Consolidated Statement of 
Comprehensive Income
22  Consolidated Statement of 
Changes in Equity
23  Consolidated Statement of 
Financial Position
24 Consolidated Cash Flow Statement
25  Notes forming part of the  
financial statements
ibc Advisers
Chariot Oil & Gas Limited is an 
independent oil and gas exploration 
company with interests in Namibia. 
Enigma Oil and Gas Exploration (Pty) 
Limited is a wholly owned subsidiary  
of Chariot and is the operator of the 
licence areas.
Four licences covering eight offshore blocks in Namibia 
Large block allocation – one of largest holdings in Namibia –   
38,725 km²
8.5 billion barrels of gross unrisked mean prospective resources 
3 geologically distinctive basins – well positioned across   
Namibian South Atlantic margin
Frontier exploration with a proven working petroleum system 
Increasing interest in Africa, specifically in West African deep   
water plays 
Advisers
Registered Office
Sydney Vane House
Admiral Park
St. Peter Port
Guernsey
GY1 3EL
Registration Number: 47532
nominated Adviser
Ambrian Partners Limited
Old Change House
128 Queen Victoria Street
London
EC4V 4BJ
United Kingdom
Broker
Ambrian Partners Limited
Old Change House
128 Queen Victoria Street
London
EC4V 4BJ
United Kingdom
Bankers
Barclays Bank PLC
PO Box 41
Le Marchant House
Le Truchot
St. Peter Port
Guernsey
GY1 3BE
 
Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
United Kingdom
Financial public Relations adviser
Buchanan Communications
45 Moorfields
London
EC2Y 9AE
United Kingdom
 
Solicitors
As to British Law:
Memery Crystal LLP
44 Southampton Buildings
London
WC2A 1AP
United Kingdom
 
As to Namibian Law:
Lorentz Angula Inc.
Private Bag 12007
Ausspannplatz
Windhoek 3rd Floor
LA Chambers
Ausspann Plaza
Windhoek
Namibia
 
As to Guernsey Law:
Babbé
PO Box 69
18–20 Smith Street,
St. Peter Port
Guernsey
GY1 4BL
 
Company Secretary
Artemis Secretaries Limited
Sydney Vane House
Admiral Park
St. Peter Port
Guernsey
GY1 3EL
 
Registrars and receiving agents
Anson Registrars Limited
PO Box 426
Anson Place
Mill Court
La Charroterie
St. Peter Port
Guernsey
GY1 3WX Chariot Oil & Gas Limited  Annual Report & Accounts 2010
Annual Report & Accounts 2010
UnLOCKin G
AFRiCA’S  
OiL & GAS 
pOtentiAL
Chariot Oil & Gas Limited
Registered Office
Sydney Vane House
Admiral Park
St. Peter Port
Guernsey
GY1 3EL
www.chariotoilandgas.com