REG - Predator O&G Hldgs - Acquisition Challenger Energys Trinidad and Tobago

Predator Oil & Gas HoldingsAnnouncement

18/02/2025 07:15

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RNS Number : 4225X  Predator Oil & Gas Holdings PLC  18 February 2025

FOR IMMEDIATE RELEASE

18 February 2025

 

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

Predator Oil & Gas Holdings Plc

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

 

                  Acquisition of Challenger Energy's
business, assets

                             and operations in
Trinidad and Tobago.

 

Highlights

 

·    Production revenues support and accelerate plans for drilling
Snowcap-3

 

·    Snowcap-3 targeting 2C 1.4M and 2P 12.91M barrels of oil

 

·    Management confident it can increase current average production of
272 bopd

 

·    Up to 100% increase in production in a single well in Inniss-Trinity
with

unconventional CO2 EOR reducing oil viscosity

 

·    Already identified high-value conventional targets for workover and
SGN chemical wax treatment to lower oil viscosities

 

Predator Oil & Gas Holdings Plc (LSE:PRD), the Jersey-based Oil and Gas
Company with near-term hydrocarbon operations and production focussed on
Morocco and Trinidad, is pleased to announce that it has entered into a
transaction with Challenger Energy ("CEG") for the acquisition of its St
Lucia domiciled subsidiary company, Columbus Energy (St. Lucia) Limited
("CEG Trinidad"), which in turn holds various subsidiary entities collectively
representing all of the CEG's business, producing assets and operations in
Trinidad and Tobago.

Caribbean Rex Limited ("CRL"), 51% owned by the Company's wholly owned
subsidiary T-Rex Resources (Trinidad) Limited ("T-Rex"), is making the
acquisition to facilitate, if warranted, the amalgamation and consolidation in
the future of tax losses in CEG Trinidad with the tax losses in T-Rex.

CRL is 49% owned by the West Indian Energy Group Limited ("WIEGL") a local
company with proven experience in increasing production from existing onshore
fields.

The three producing fields that are being acquired are Goudron, Inniss Trinity
and Icacos and are currently averaging 272 bopd of production and are held
under an Enhanced Production Sharing Contract ("EPSC") with Heritage Petroleum
and in the case of Icacos, under a Ministry of Energy and Energy Industries
private mining licence.

 

Business development rationale

 

·    Acquiring existing operations allows the Company to potentially
accelerate the drilling of the Snowcap-3 development and appraisal well, which
will target 2C oil resources of 1.4M barrels in the reservoir being restored
to production by the Snowcap-1 well workover and 2P oil resources of 12.91M
barrels from deeper reservoirs equivalent to those in the adjacent Moruga West
field formerly operated by BP

 

·    The fixed assets (inclusive of workover rigs, plant equipment,
storage tanks, vacuum truck, separator and production machinery) that form
part of the CEG Trinidad assets shall be utilised over all of the T-Rex
Assets, without additional costs, thus creating efficient synergies and
economies of scale

 

·    Management is also very familiar with the Inniss-Trinity field as a
consequence of its CO2 EOR pilot project which enhanced oil production by up
to 100% in a pilot CO2 EOR well. Several existing opportunities to increase
conventional field production were previously identified by management

 

·    The Company is confident that the application of informed subsurface
geological understanding combined with the patented SGN Technology for
chemical wax treatment, presently being prepared for the Jacobin-1 workover in
the Cory Moruga licence, will enhance production throughout the portfolio of
producing assets being acquired

 

·    The Company's management will work together with the highly
experienced local operational staff and its preferred service contractors to
merge their expertise so as to implement targeted field operations for higher
reward outcomes and to lower operating and administrative costs across its
portfolio of assets as it gears up to drill Snowcap-3. It alleviates the need
for additional staffing for the development and commercialisation of the Cory
Moruga field and to enhance production in the Bonasse field

 

·    Enhanced production achieves a better utilisation of consolidated tax
losses

 

Consideration

·    an initial deposit of $250,000 - this has been satisfied via the
issuance to CEG of 4,411,641 unrestricted Predator shares ("the Deposit
Shares")

 

·    $750,000 payable on completion - $250,000 in cash and $500,000 via
the issuance of unrestricted Predator shares (the number of Predator shares to
be issued to be determined based on the prevailing exchange rate and market
price of Predator shares at the time of completion)

 

·    deferred unconditional consideration payments of $750,000, payable in
cash, in three instalments of $250,000, on each of 31 December 2025, 2026, and
2027

 

·    the assumption by CRL of all liabilities, provisions and potential
exposures of the business, assets and operations in Trinidad and Tobago (the
"Legacy Liabilities"), which for the purposes of the sale agreement were
agreed to be in the amount of $4.25 million

 

CRL's shareholder WIEGL will separately assume the Legacy Liabilities for an
interim period of 12 months from the Closing Date (the "Interim Period") after
which WIEGL and T-Rex will meet to negotiate new terms going forward that will
consider the anticipated enhanced production from the assets being acquired
during the Interim Period.

 

WIEGL shall have the right to acquire additional shares in the business,
assets and operations in Trinidad and Tobago from CRL in the event there is a
change of control of Predator Oil & Gas Holdings Plc ("POGHL"). The
consideration shall be the pro-rated value of two times CRL's gross capital
investment in further developing the assets up until the date of any change of
control of POGHL (the "COC Date") and a pro rata royalty equal to 10% of
enhanced oil production over a base line of 400 bopd to commence from the COC
Date and to continue for a period of 5 years thereafter.

 

·    contingent payments of up to $2 million, at the rate of $2 per barrel
of oil produced by the assets sold in the period to 31 December 2027, but only
for production exceeding 750 bopd, and only after capital costs incurred by
the Buyer in support of that increased production are first recovered by the
Buyer from production

 

·    The consideration represents a total transaction value to CEG
Trinidad of up to $8M depending on contingent payments being realised

 

·    Completion is dependent upon the approval of Heritage Petroleum for
the indirect change of ownership interests in the EPSC's. CRL shall
immediately begin to commence the process of securing approval from Heritage

 

CEG will proceed to immediately convene an extraordinary general meeting
("EGM") of its shareholders given that the Trinidad operations represent 100%
of the CEG's present revenue, in accordance with the AIM rules, requiring
prior approval of the Company's shareholders for the disposal being required.

 

·    Completion of the sale is conditional on both approvals being
obtained prior to 30 April 2025. If the sale does not complete for failure of
the Heritage approval condition, the deposit will be forfeited; if the
transaction does not complete because CEG shareholders do not approve the
transaction, the deposit must be refunded.

 

 

Paul Griffiths, Chief Executive Officer of Predator Oil & Gas Holdings
Plc commented:

"Today's announcement allows us to build the operational team, at no
additional cost and funded by production revenues, to accelerate our plans to
drill the high impact Snowcap-3 well, an appraisal to the Snowcap-1 oil
discovery, targeting 2C and 2P oil resources of 1.4M and 12.91M barrels
respectively"

 

Management is very confident that it can raise production significantly from
the assets being acquired over the next 12 months by applying our know-how
from our previous involvement in Inniss-Trinity, new chemical wax treatment
technology and an integrated management structure to streamline the
decision-making process.

 

This is an exciting development for the Company and our shareholders that is
likely to lead to more high-value drilling and workover opportunities whilst
not detracting from

the Company's immediate focus on drilling for potentially large gas resources
in Morocco. The Titanosaurus MOU-5 drilling  is currently scheduled to
commence on or before 3 March 2025."

 

Admission, Settlement and Dealings in the new Placing Shares

Application is being made for the Deposit Shares to be admitted to the
Official List and to trading on the Main Market of the London Stock Exchange
("Admission") which is expected to be on or around 21 February 2025.

The rights attaching to the Deposit Shares will be uniform in all respects and
all of the Deposit Shares will rank pari passu, and form a single class for
all purposes with, the existing issued shares of no par value in the Company.

 

Total Voting Rights

Following Admission, the Company has  ordinary shares of no par value in
issue, each with one vote per share (and none of which are held in treasury).
The total number of voting rights in the Company is therefore 666,286,395 This
figure of 666,286,395 may be used by shareholders in the Company as the
denominator for calculations to determine if they have a notifiable interest
in the share capital of the Company under the Disclosure Guidance and
Transparency Rules, or if such interest has changed.

 

 

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 (http://www.predatoroilandgas.com) :

 

 

 

 

 

 

Enquiries:

 

 

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

 Paul Griffiths - Chief Executive Officer                                                                                                                                                                                                                                                               Info@predatoroilandgas.com (about:blank)

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

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

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

 David Coffman / Jon Belliss

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

 Tim Thompson                                                                                                                                                                                                                                                                                            predator@flagstaffcomms.com (about:blank)

 Mark Edwards

 Fergus Mellon

Notes to Editors:

 

Predator is an oil & gas company with a diversified portfolio of scaled
assets including unique and highly prospective onshore Moroccan gas exposure,
with multiple fully financed upcoming catalysts.

 

Predator has an interesting gas project in Morocco with fast pace of
commercialisation and significant upside. The Guercif project is a shallow CNG
biogenic gas development with different traps and separate identified
reservoirs. The Jurassic Titanosaurus is a shallow thermogenic gas prospect
evaluating 249m of potential gross reservoir thickness in a trap of maximum
closure of 187 km2 for pipeline gas to power, with pipeline 2.5km from
wellhead.   Moroccan gas prices are high, and the fiscal terms are some of
the best in the world.  Predator also has a diversified portfolio of assets
across Ireland and Trinidad, which is a near-term revenue-generating project.

 

Predator has an experienced management team with particular knowledge in
Moroccan sub surface and operations.  The team specialises in incorporating
modern, proven technologies and processes from Canada and the US to provinces
where the conventional technologies did not allow their hydrocarbon potential
to be revealed.

 

 

 

 

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