REG - Predator O&G Hldgs - Corporate Update

Predator Oil & Gas HoldingsAnnouncement

06/06/2024 07:00

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RNS Number : 3104R  Predator Oil & Gas Holdings PLC  06 June 2024

FOR IMMEDIATE RELEASE

6 June 2024

 

               Predator Oil & Gas Holdings Plc / Index: LSE
/ Epic: PRD / Sector: Oil & Gas

 
LEI 213800L7QXFURBFLDS54

Predator Oil & Gas Holdings Plc

("Predator" or the "Company" and together with its subsidiaries the "Group")

 

 

Corporate update

 

Highlights

 

·    Morocco

o  Commencement of Sandjet rigless testing programme on MOU-3

o  Initial well MOU-3 to target gross perforating interval of 104 metres

o  Plans to source additional rig for future appraisal drilling

o  MOU-5 will commence drilling upon entry into the First Extension Period

 

·    Trinidad

o  Sale and Purchase Agreement executed for assignment of a further 16.2%
interest in the Cory Moruga

 

·    Ireland

o  Agreed in principle, farm-in terms on successor authorisation to Licencing
Option 16/26 "Corrib South"

o  Gross unrisked GIIP 303 BCF net to Predator's 50% interest with a 44%
chance of success

 

·    Company fully financed for all its near-term operations

 

 

Predator Oil & Gas Holdings Plc (LSE: PRD), the Jersey based Oil and Gas
Company with near- term hydrocarbon operations focussed on Morocco and
Trinidad, is pleased to announce a corporate update.

Morocco

Commencement of Sandjet rigless testing programme

The early stages of the Sandjet rigless testing programme have commenced with
the arrival of some well services equipment at the MOU-3 well site and the
preparation of the well for re-entry and perforating.

Extensive operations at MOU-3 are anticipated to last for at least five weeks
before moving to the next well in the Sandjet testing programme.

As a reminder to shareholders, the primary objective of the Sandjet is to
effectively reach beyond the zone of formation damage caused by the
requirement for over-balanced drilling during drill operations, which
prevented the well from flowing gas.

MOU-3 perforating procedures

Up to three intervals will be separately perforated. Each interval will be
isolated with a retrievable plug after testing to prevent cross-flow of any
produced gas at different pressures between deeper and shallower reservoir
sands. Pressure data will be collected and analysed for each interval to
determine the extent of any connected potential gas volume compared to
pre-test volumes estimated to be in place in the 13.9 km2 MOU-3 structure (the
"Moulouya" structure).

Several Sandjet perforating runs may or may not be required to perforate
additional sands depending on the outcome of the initial perforating results.

Interval objectives for MOU-3

·    TGB-6 and Ma Sand ("middle sequence") will be perforated over a gross
interval of 80 metres with initially 13 perforating points.

 

·    Estimates of potential gas resources for this interval are as
previously defined in the Independent Technical Report ("ITR") dated 24
January 2024 by Scorpion Geoscience Limited.

 

·    Subject to successful gas flow at commercial gas flow rates and
confirmation of connected volumes, the middle sequence may potentially support
a CNG gas profile of between 10 to 20 million cf/day.

 

·    TGB-4 ("lower sequence") will be perforated first over a gross
interval of 24 metres with 4 perforating points.

 

·    Estimates of potential gas resources for this interval were
previously defined in the SLR Consulting Limited Competent Persons Report
dated March 2019 and have not changed.

 

·    This is a higher risk perforating target as the potential
stratigraphic trapping mechanism defined by stronger seismic amplitudes
supported by recent seismic inversion modelling has yet to be validated by a
successful gas flow test in MOU-3.

 

·    Subject to a successful commercial gas flow rate and confirmation of
connected volumes this lower sequence may potentially support future scaling
up of the CNG gas profile to 50 million cf/day facilitated by the
Collaboration Agreement with Afriquia Gaz.

 

Following completion of the MOU-3 rigless well testing a decision will be made
to move to either MOU-1 or MOU-4 next to perforate the TGB-2 Sand and the
Moulouya Fan sequence respectively.

A carbonate interval in MOU-4 has also been selected for possible perforating
with Sandjet in order to calibrate the NuTech petrophysical log interpretation
over this interval which is located at the extreme edge of the Jurassic
structure to be tested by MOU-5.

Jurassic MOU-5 well ("Titanosaurus structure")

·    The MOU-5 well will now commence drilling as soon as practical after
entry into the First Extension Period following the unforeseen delay to the
scheduling of the Star Valley rig 101 programme due to other commitments.

 

·    The Titanosaurus structure covers an area of up to 187 km2 and has up
to 289 metres of vertical relief. Estimates of potential gas resources for
this interval are as previously defined in the Independent Technical Report
("ITR") dated 24 January 2024 by Scorpion Geoscience Limited. These are likely
to be increased based on new seismic inversion modelling to evaluate a
potentially thickened reservoir sequence.

 

·    The prospective reservoir fairway is an Early Jurassic carbonate
sequence and different from the sequences of sands for the Moulouya MOU-3
structure. The primary reservoir target and structural setting has never
before been tested in Morocco.

 

·    The gas source is interpreted as thermogenic dry gas and not biogenic
gas as found in the Moulouya structure.

 

·    Average well depths to penetrate the entire prospective interval are
in the range 800 to 1100 metres Measured Depth. Estimated drilling time is 12
to 14 days.

 

·    The Company determines that there is a better than 50% chance of
success based on the fact that MOU-5 is immediately updip from MOU-4, which
helped define the target for MOU-5.

 

·    Potential development scenarios are being considered in the event of
a successful outcome to drilling.

 

·    The MOU-5 pre-drill well location is located only 2.3 kilometres from
a valve station on the Maghreb Gas Pipeline ("MGPL") to Europe.

 

·    A fixed pipeline development option is likely to be an attractive
investment proposition if MOU-5 encounters material gas volumes and is
subsequently tested at commercial flow rates.

 

·    Based on an anticipated dry gas reservoir, development costs are
expected to be significantly reduced given the short length of new pipeline,
2.3 kilometres, necessary to connect to existing MGPL infrastructure with
significant spare throughput capacity.

 

·    For the purposes of verifying the costs to construct a tie-in
pipeline from the MOU-5 well location to the MGPL,  the Company is planning a
desk-top and site study based on pipeline capacities of 100, 300 and 500
million cf/day.

 

Rig requirements

The Company has been very frustrated during 2024 in regard to scheduling
drilling activities in a timely manner in line with its business development
strategy for locating additional gas resources in its Guercif  licence area.

As a result the Company has started the process of sourcing a rig with related
well services from overseas to bring to Morocco to enable it to have the
flexibility under its sole control and discretion to progress a potential
Titanosaurus step-out drilling campaign and further appraisal drilling of gas
targets within and adjacent to the Moulouya structure.

 

Financing

The Company is fully financed for all its near-term operations.

Following the results of the Sandjet rigless testing and the first two well
workovers in Trinidad designed to re-establish oil production, the Company
will re-assess its funding needs for the next 12 months.

 

Trinidad

·    The Sale and Purchase Agreement ("SPA") has been executed between
T-Rex Resources Trinidad Limited ("T-Rex"), a wholly owned subsidiary of
Predator Oil & Gas Holdings Plc, and  the current third-party Trinidad
partner for the assignment of a 16.2% interest in the Cory Moruga "E" Block.
The assignment is subject to the Ministry of Energy and Energy Industries
regulatory consent.

 

·    Site clearance for the first well workover will start shortly. Quotes
for a workover rig and perforating services have been received and are
currently being reviewed. Contracts will be awarded shortly.

 

·    Jacobin-1 will be re-entered first. Zones within a gross interval of
2,500 feet have been selected for perforating.  A number of these zones are
potentially at virgin reservoir pressure, which if confirmed may support
higher than anticipated initial flow rates.

 

·    Snowcap-1 will be the next well in the planned workover programme.

Interpreted legacy well and production test data are in agreement with
potential recoverable oil estimates. There is a strong expectation that
production can be restored at former levels following remedial downhole work.

 

Ireland

 

·    The Company has received correspondence from the Department of the
Environment, Climate and Communication Geoscience Regulation Office ("DECC
GSRO") in respect of its applications for successor authorisations for
Licensing Options 16/26 and 16/30.

 

·    GSRO acknowledged that the Company had met the technical assessment
criteria for Licensing Option 16/26 and offered the opportunity for the
Company to submit additional material to complete the assessment of financial
capability.

 

·    The Company has elected to focus on a potential award of a successor
authorisation for Licensing Option 16/26 ("Corrib South") as the Company is
very confident that it can demonstrate that it has the financial capability to
satisfy the Corrib South work programme and has accordingly communicated
supporting financial information to the GSRO.

 

·    Gross unrisked P10 gas in place of 303 BCF net to the Company's 50%
interest with a 44% chance of success (Tracs International Competent Person's
Report August 2023).

 

·    Option to acquire additional 50% interest prior to concluding a
farmout transaction.

 

·    Lastly, we have agreed in principle, farm-in terms on Licencing
Option 16/26, the company has expressed a desire to farm into any successor
authorisation for Licensing Option 16/26 that is eventually awarded to
Predator

 

The Corrib South structure, located just 18 kms from the Corrib gas field, was
formerly held by Shell as a "Reserved Area" during the development of the
Corrib gas field.

The Corrib South structure is potentially of an optimum size to prolong the
life of the Corrib gas filed infrastructure if gas is successfully discovered
in the future. Furthermore it may provide gas and hydrogen storage options to
enhance security of energy supply.

The Company is now cautiously optimistic that an award of the Corrib South
successor authorisation is potentially achievable in 2024.

Financial - Public Relations

The Company is pleased to announce the appointment of Capital Markets
Communications Limited ("Camarco") for public relations.

The rapid development of the Company over the past 12 months has taken it to
the next stage of business development where greater emphasis can now be
placed on developing the Predator story to a wider international audience.

 

Paul Griffiths, Executive Chairman of Predator, commented:

"We have made significant progress over the last few months developing our
portfolio of projects.

Whilst we understand that there is an expectation for instant results and
updates, we operate in a complex business sector within a framework of robust
regulatory and environmental procedures established by governments. Our
priority is to ensure that are attractive portfolio of assets is optimally
developed within our financial capabilities, without taking on burdensome
debt, and in accordance with all government regulations.

We are now at a critical stage in seeking to establish an uplift in the value
of all of our assets and this must be achieved in a cautious manner to ensure
maximum potential to monetise when the time is right and the de-risking of
scalable value is complete.

The public markets rarely give value to medium and longer term business
development plans, however systematically proving up oil and gas resources
provides the mechanism for extracting value from other entities within the
upstream and downstream natural resources sector, that understand the value of
gas in particular to support the Energy Transition and the potential for
commodity trading in what is still a very attractive global market for energy
supply and security.

The management team has focus and a clear strategy for business development
and will continue along that path until our assets reach a stage where
near-term production start-up can be  delivered as a catalyst for
monetisation.

The Company's Titanosaurus project represents a good example of why our
industry still attracts investors. The potential multiple returns on
investment on successfully drilling and flowing gas from the Titanosaurus
structure  are difficult to match in any other industry. A favourable fiscal
regime, proximity to infrastructure with significant under-utilised capacity,
low development costs and a tangible contribution to the energy transition
combine to enhance the immediate opportunity that Titanosaurus presents".

For further information visit www.predatoroilandgas.com (about:blank)

 

Follow the Company on X @PredatorOilGas.

 

This announcement contains inside information for the purposes of Article 7 of
the Regulation (EU) No 596/2014 on market abuse.

 

 

 

For more information please visit the Company's website
at www.predatoroilandgas.com (about:blank) :

 

Enquiries:

 Predator Oil & Gas Holdings Plc                                                                                                                                                                                                                                                                        Tel: +44 (0) 1534 834 600

 Paul Griffiths                Executive Chairman                                                                                                                                                                                                                                                       Info@predatoroilandgas.com (about:blank)

 Lonny Baumgardner    Managing Director

 Novum Securities Limited                                                                                                                                                                                                                                                                               Tel: +44 (0)207 399 9425

 David Coffman / Jon Belliss

 Oak Securities                                                                                                                                                                                                                                                                                         Tel: +44 (0)203 973 3678

 Jerry                                                                                                                                                                                                                                                                                                  Jerry.keen@oak-securities.com (mailto:Jerry.keen@oak-securities.com)
 Keen

 Camarco - Financial PR                                                                                                                                                                                                                                                                                 Tel: +44 (0)20 3757 4980

 Billy Clegg / Owen Roberts / Fergus Young                                                                                                                                                                                                                                                              P (mailto:PredatorOilGas@camarco.co.uk) redatorOilGas@camarco.co.uk

                                                                                                                                                                                                                                                                                                      (mailto:PredatorOilGas@camarco.co.uk)

 

Notes to Editors:

 

Predator is operator of the Guercif Petroleum Agreement onshore Morocco which
is prospective for Tertiary and Jurassic gas.  The current focus of the
exploration and appraisal drilling programme is located less than 10
kilometres from the Maghreb gas pipeline.  The MOU-1 well drilled in 2021 and
the MOU-3 and MOU-4 wells drilled in 2023 have been completed for rigless
testing in early 2024. Near-term focus is on supplying compressed natural gas
("CNG") to the Moroccan industrial market. A Collaboration Agreement for
potential CNG gas sales of up to 50 mm cfgpd has been executed with Afriquia
Gaz. Further drilling activity is anticipated in 2024 to further evaluate the
MOU-4 Jurassic prospect.

 

Predator is seeking in the medium term to apply CO2 EOR techniques onshore
Trinidad which have the advantage of sequestrating anthropogenic carbon
dioxide. The acquisition of T-Rex Resources (Trinidad) Ltd. ("T-Rex") is a
first step to realising this objective. T-Rex holds the Cory Moruga Production
Licence. Cory Moruga is a largely undeveloped near-virgin oil field of similar
potential size to the nearby Moruga West and Inniss-Trinity mature oil fields.
The Cory Moruga Production Licence is a potentially significant asset for the
Company with the capability of generating positive operating profits in the
near-term. Capital required for staged field development can be implemented
potentially utilising operating profits generated from an increasing level of
gross production revenues.

 

Predator owns and operates exploration and appraisal assets in licensing
options offshore Ireland, for which successor authorisations have been applied
for, adjoining Vermilion's Corrib gas field in the Slyne Basin on the Atlantic
Margin and east of the decommissioned Kinsale gas field in the Celtic Sea. The
applications for successor authorisations remain "under consideration" by the
DECC.

 

Predator has developed a Floating Storage and Regasification Project ("FSRUP")
for the import of LNG and its regassification for Ireland and is also
developing gas storage concepts to address security of gas supply and
volatility in gas prices during times of peak gas demand.

Further progress for the Mag Mell FSRUP will be dependent on government policy
in relation to security of energy supply. A generalised FSRUP concept has now
been recognised by the government as an option for security of energy supply.

 

The Company has a small but highly experienced management team with a proven
track record in successfully executing drilling operations in the oil and gas
sector and in acquiring assets where there is a potential to generate multiple
returns for relatively low and manageable levels of investment.

 

 

 

 

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