TIDMPRD
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 GBP700 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/
For further information visit www.predatoroilandgas.com
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
Enquiries:
Predator Oil & Gas Holdings Plc Tel: +44 (0) 1534 834 600
Paul Griffiths Executive Chairman Info@predatoroilandgas.com
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
Flagstaff Strategic and Investor Communications Tel: +44 (0)207 129 1474
Tim Thompson predator@flagstaffcomms.com
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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