REG - Predator O&G Hldgs - Update on Guercif testing Morocco and Trinidad

Predator Oil & Gas HoldingsAnnouncement

30/11/2023 07:15

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RNS Number : 1362V  Predator Oil & Gas Holdings PLC  30 November 2023

FOR IMMEDIATE RELEASE

30 November 2023

 

               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")

 

 

Update on Guercif testing programme, Morocco and Trinidad

 

 

 

 
Highlights

 

·    Petroleum Agreement Amendment No.3 and corresponding Exploration
Permits being approved shortly

 

·    Rigless testing programme re-scheduled for January 2024

 

·    Memorandum of Understanding in relation to Gas Sales and
Collaboration Agreements signed with Afriquia Gaz

·    Afriquia Gas most recent reported revenue figure is 8.72 billion MAD,
approximately equivalent to £700 million

·    Fully funded for a pilot CNG development

·    Environmental Impact Assessment commissioned for 3 wells proposed for
2024 drilling programme including the Jurassic target

 

·    Cory Moruga Independent Technical and Resources Report to be
published in December 2024

 

 

Predator Oil & Gas Holdings Plc (LSE: PRD), the Jersey based Oil and Gas
Company with near-term operations focussed on Morocco and Trinidad, provides
an update on the background to, rationale for and current progress of the
Company's rigless testing programme within the northwest area of interest of
the Guercif Petroleum Agreement and corresponding Exploration Permits onshore
Morocco.

 

Petroleum Amendment No.3

 

Following the signing and approval of Petroleum Agreement Amendment No.2 dated
14 October 2022, the Initial Period of the Guercif Petroleum Agreement and
corresponding Exploration Permits, which had been extended from 30 months to
42 months as a result of Petroleum Agreement Amendment No.1 dated 27 November,
2020, which allowed for force majeure due to COVID, was extended by a further
9 months to 5 August,2023. This allowed for the acceleration of additional
drilling that would have otherwise been scheduled for the First Extension
Period.

 

A further extension of six months to 5 February, 2024 was agreed with Office
National des Hydrocarbures et des Mines ("ONHYM")  to allow for the
completion of the MOU-3 and MOU-4 drilling programme and associated reports
and studies and for a potential rigless testing programme to be executed
subject to a review of the drilling results.

Accordingly Petroleum Agreement Amendment No. 3 was executed by Predator Gas
Ventures Ltd. ("PGVL") and ONHYM dated 31 July 2023 and extended the Initial
Period of the Guercif Petroleum Agreement and corresponding Exploration
Permits to 57 months until 5 February, 2024 subject to obtaining the required
statutory approvals under the form of (i) a Joint Ministerial Order to be
executed by the Ministry of Energy and the Ministry of Finance approving the
Guercif Petroleum Agreement Amendment No.3 and (ii) an order to be executed by
the Ministry of Energy approving the six months extension to the Exploration
Permits Initial Period.

Rigless Testing Programme

Changes to the rigless testing programme were forced to be made due to
operational constraints regarding the preparedness of the Sandjet testing
equipment and required availability of  chemicals in bulk to be imported from
France.

Given the limited availability of the length of perforating gun strip for
immediate use the following intervals were selected for perforating in
sequence as follows:

MOU-3

1,406.0 to 1,412.0 metres RKB (within Moulouya Fan interval); and

845.0 to 849.0 metres RKB (Ma Sand)

MOU-1

1,236.5 to 1,241.1 metres RKB (TGB-2 Sand); and

844.0 to 848.0 metres RKB (Ma Sand)

Subject to establishing the potential quantum of gas flow rate for the
Moulouya Fan interval in MOU-3, an option to replace the Ma Sand test in MOU-1
would be considered as follows:

MOU-4

873.85 to 879.85 metres RKB (within Moulouya Fan interval).

Accordingly the revised rigless testing programme for MOU-1 and MOU-3 was
provided to ONHYM on the basis of which ONHYM sent letters to the Ministère
de la Transition Energétique et du Développement Durable dated 12 October
2023 for authorisation for the use of the new quantity of explosives required
for the rigless resting programme.

Following the receipt of all necessary approvals for rigless testing PGVL
began the panning for the mobilisation on 6 November 2023 of those
international crews required to perform certain elements of the testing
programme.

The key objective of the testing programme was to ensure that all required
rigless test data were available within the extension of the Initial Period of
the Guercif Petroleum Agreement and corresponding Exploration Permits enabled
by Petroleum Agreement Amendment No.3.

In preparation for entering the First Extension Period, PGVL has produced a
partial 37.5% relinquishment map for the end of the Initial Period as required
under the Moroccan Hydrocarbon Code but which retains all the prospective area
within the original Guercif Licence.

Update on Guercif Petroleum Agreement Amendment No.3

On 8 November 2023 PGVL was informed by ONHYM of an unforeseen administrative
regulatory issue as a consequence of which the Joint Ministerial Order
approving the Guercif Petroleum Agreement Amendment No.3 had yet to be issued.

As a result PGVL had to stand down at short notice mobilisation of its rigless
testing well services and international personnel to await resolution of the
issue by third parties.

The matter was resolved and the Joint Ministerial Order is expected to be
issued shortly.

We very much appreciate ONHYM's assistance in resolving this matter.

PGVL has begun the process of re-scheduling and re-mobilising its rigless well
testing team as a matter of urgency. It is currently forecast that rigless
testing operations will begin as early as possible in January 2024.

The current rigless testing programme will remain as defined herein in order
to minimise the lead time to commencement of operations.to enable the
information to be acquired to support an application for an Exploitation
Concession at the earliest opportunity in Q1 2024.

A follow-up rigless testing programme using Sandjet may also be scheduled for
later to evaluate additional potential reservoirs in MOU-1, MOU-3 and MOU-4.

Memorandum of Understanding in relation to Gas Sales and Collaboration
Agreements

In anticipation of a successful upcoming rigless testing programme and in
preparation for a potential submission of a future application for an
Exploitation Concession, PGVL successfully negotiated a Memorandum of
Understanding in relation to Gas Sales and Collaboration Agreements (the
"Agreement") with Afriquia Gaz, a downstream potential purchaser of gas
(together the "Parties"). The Parties have subsequently executed the Agreement
on 27 November 2023, the main terms of which are also announced today in a
separate RNS.

2024 Drilling Programme

A 2024 drilling programme and schedule will be proposed to ONHYM after
completion of the rigless testing programme and upon entering the First
Extension Period of the Guercif Petroleum Agreement.

In preparation for a drilling programme, PGVL has awarded a contract for an
Environmental Impact Assessment covering five potential well locations.

These locations include a potential well to approximately 1,100 metres RKB to
test the Jurassic prospect updip from the MOU-4 well. An independent
geochemical desk-top study  has commenced to assess the potential for mature
oil and/or condensate source rocks in the Jurassic in MOU-4.

Two well locations are planned to follow up the shallow sand intervals behind
casing in MOU-3, that was not capable of being logged, and the Ma Sand
interval in MOU-3 and MOU-1. Well depths are forecast to be approximately 800
and 1,000 metres RKB respectively.

Financing and Funding

PGVL is fully funded to execute a pilot CNG development project (the "CNG
Project") in Guercif.

The previously announced acquisition of TRex Holdings Trinidad Limited
("TRex") and the Cory Moruga field was completed using discretionary cash on
the Company's balance sheet that was surplus to the CNG Project financial
requirement.

Initial development of the Cory Moruga field will require only low cost
workovers of up to four existing wells and is fully funded by the
discretionary cash on the Company's balance sheet.

The Cory Moruga workover programme will begin to be put together in January
2024 with the objective of re-entering the first well in Q1/Q2 2024. There is
a significant and diversified well services industry in Trinidad. Cory Moruga
is an existing Production Licence that does not require additional regulatory
approvals before value-generating operations can be executed.

By the second half of 2024 TRex is expected to be generating significant
positive cash flow from workover operations.

Cash flow from Cory Moruga production revenues and remaining discretionary
cash on the balance sheet in H2 2024 would be potentially available to fund a
high-impact Jurassic well in Morocco.

The Company will maintain an opportunistic strategy with respect to potential
sale or farmout of some project equity where market conditions are conducive
to such transactions and the commercial terms are attractive. Given that the
Company is well-financed to deliver all of its current near-term firm
strategic objectives for its substantially de-risked oil and gas portfolio,
any dilution of project equity would need to be a compelling value proposition
for shareholders.

Independent Technical Reports and Reserves Estimation

An independent technical report for the Cory Moruga asset with indicative
production profiles and near-term revenue projections is expected to be
released before the end of 2023.

An independent technical report for the Guercif gas assets and prospects
including updated volumetric estimates will be available after completion of
the rigless testing programme.

 

Paul Griffiths, Executive Chairman of Predator, commented:

"We have worked diligently to plan the necessary sequence of activities
required to highlight the gas potential of the area and to be in a position
after rigless testing to submit an application for an Exploitation Concession.

 

Unfortunately an unforeseen administrative regulatory issue totally out of the
Company's control caused a delay in the execution of the rigless testing
programme. It is not possible to keep well services, equipment and personnel
on standby indefinitely. Such services are in high demand at present elsewhere
in North Africa. The costs that would have been incurred by the Company are
simply not justifiable when prudent management of cash resources is essential
during a time of uncertainty in the equity markets in the oil and gas sector.

 

However the additional time that is being accumulated before rigless testing
can commence has enabled us to execute a Memorandum of Understanding in
relation to Gas Sales with Afriquia Gaz.

Furthermore the Company was able to conclude the acquisition of TRex and
oversee the transfer of a large quantity of technical and commercial data to
enable us to  begin to plan the initial Cory Moruga workover programme for
early in 2024.

The Cory Moruga Project is equally as exciting as Morocco, which will be
demonstrated through the publication of an Independent Technical Report
expected by the end of this year summarising potential resources.

We are extremely fortunate in these difficult times not only to be fully
funded but also to have two projects competing for the generation of
production revenues in the near-term.

Administratively it has been a difficult couple of months, but we are exiting
2023 stronger and even more resilient and secure in the knowledge that the
Company has been transformed over the past 12 months. "

 

For information on Afriquia Gaz S.A.

https://www.afriquiagaz.com/ (https://www.afriquiagaz.com/)

 

 

For further information visit www.predatoroilandgas.com (about%3Ablank)

 

Follow the Company on twitter @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%3Ablank)

 

 

Enquiries:

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

 Paul Griffiths                Executive Chairman                  Info@predatoroilandgas.com (about%3Ablank)

 Lonny Baumgardner    Managing Director

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

 David Coffman / Jon Belliss

 Fox-Davies Capital                                                Tel   +44 (0)203 884 7447

 Jerry Keen                                                         jerry@fox-davies.com (about%3Ablank)

 Flagstaff Strategic and Investor Communications                   Tel: +44 (0)207 129 1474

 Tim Thompson                                                       predator@flagstaffcomms.com (about%3Ablank)

 Mark Edwards

 Fergus Mellon

Notes to Editors:

 

Predator is operator of the Guercif Petroleum Agreement onshore Morocco which
is prospective for Tertiary gas less than 10 kilometres from the Maghreb gas
pipeline.  The MOU-1 well drilled in 2021 and the MOU-3 well drilled in 2023
have been completed for rigless testing in 2024. Focus is on supplying
compressed natural gas to the Moroccan industrial market. Further drilling
activity is being progressed to evaluate Jurassic prospects.

 

Predator is seeking to apply CO2 EOR techniques onshore Trinidad which have
the advantage of  sequestrating anthropogenic carbon dioxide. Acquisition
opportunities are also being progressed which are compatible with this
strategy.

 

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.

 

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.

 

The Company has a highly experienced management team with a proven track
record in successfully executing operations in the oil and gas sector.

 

 

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