REG - Predator O&G Hldgs - Completion T-Rex Resources Cory Moruga acquisition

Predator Oil & Gas HoldingsAnnouncement

07/11/2023 07:00

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RNS Number : 5602S  Predator Oil & Gas Holdings PLC  07 November 2023

FOR IMMEDIATE RELEASE

7 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")

Completion of the acquisition of T-Rex Resources (Trinidad) Limited and Cory
Moruga

 

 Highlights

 

·    Acquisition of Cory Moruga exploration and production licence
interest completed

 

·    Opportunity to first re-establish Snowcap-1 production rate of 100 to
200 bopd

 

·    3 years to drill appraisal well ahead of proposed amended Field
Development Plan

 

·    Potential 5,000 to 9,000 bopd if future amended Field Development
Plan adopted

 

 

Predator Oil & Gas Holdings Plc (LSE: PRD), the Jersey based Oil and Gas
Company with near-term gas operations focussed on Morocco, is pleased to
advise that further to announcements of 20 December 2022, 8 March 2023, 1 June
2023 and 30 August 2023 the transaction for the acquisition from Challenger
Energy Group Plc ("CEG")  of T-Rex Resources (Trinidad) Limited ("TRex") and
an 83.8% the Cory Moruga licence ("Cory Moruga"), onshore Trinidad, has today,
7 November 2023 (the "Completion Date"), completed.

Completion of the transaction follows receipt of agreements from the
Trinidadian Ministry of Energy and Energy Industries ("MEEI").

As a consequence of negotiations associated with securing those agreements,
PRD and CEG agreed to vary certain of the terms of the previously announced
agreement between them, as follows:

 

·    On completion, PRD has paid to CEG US$1 million;

 

·    A further US$1 million, due to be paid by PRD to CEG 6 months after
the Completion Date, will instead be paid immediately by PRD direct to the
MEEI, in part agreed settlement of past dues on the Cory Moruga licence; and

 

·    A contingent US$1 million payable by PRD to CEG in the event of the
Cory Moruga field achieving certain future production benchmarks, and PRD
granting to CEG a future back-in right to a 25% interest in the Cory Moruga
field at an uplifted multiple of cost base, will no longer apply, reflective
of CEG's contribution to the value of settlement of the balance of past dues
on the Cory Moruga licence, which by agreement will be recovered by MEEI via
agreed quarterly arrears payments, which are deductible against Petroleum
Profit Tax and supplemental petroleum tax.

 

In parallel with completion, all historical differences, and disputes between
PRD and CEG in relation to the Inniss-Trinity pilot CO2 EOR Project have been
completely and amicably resolved pursuant to the terms of the previously
announced Settlement Agreement between PRD and CEG.

 

Initial Work programme

The Initial Work Programme agreed by PRD with the MEEI will be conducted over
the next three years effective from the Completion Date and will include:

 

·    Re-entering Snowcap-1 to bring the Herrera #8 Sand back onto
production;

 

·    Reprocessing, subject to the availability of seismic field tapes, the
existing 3D seismic on Cory Moruga; and

 

·    Drilling an appraisal/exploration well to test all eight Herrera
reservoir intervals (Herrera #1 to #8 Sands) that produced in the adjoining
ex-BP and Shell Moruga West field and several of which had tested oil in
Rochard-1 drilled in 1955.

 

Snowcap-1 and Snowcap-2ST1

Snowcap-1 initially flowed at a stabilised rate of 406 bopd with no water. The
Snowcap-1 test waxed off downhole during the test with the test tool recovered
covered in wax.

The well produced 3,277 barrels of oil with a final shut-in reservoir pressure
of 2076 psi.

A re-entry and work-over with a wax treatment is planned and designed to
restore production to a predicted rate of 100 to 200 bopd based on a
successful wax treatment programme and re-completion of the well.

Snowcap-2ST-1 also encountered oil-bearing Herrera Sands but no resistivity
log was run and no testing operations were performed at the time due to
operational issues.

PRD plan to survey this well for possible re-entry and if achievable will run
a resistivity wireline log to select intervals for re-completion and testing,
which if successful will allow this well also to come onto production.

Planning for the workovers will start immediately with production recommencing
in early 2024 if all operations are successfully executed.

 

Field Development Plan ("FDP")

PRD has outlined an amended FDP to the MEEI which includes up to 20
development wells to be drilled over 3 years from completion of the Initial
Work Programme.

A long-term production potential for the fully developed Cory Moruga field of
5,000 to 9,000 bopd (100% equity - PRD net 83.8%) was presented to the MEEI.

PRD also presented to the MEEI a possible longer-term miscible CO2 EOR scheme
which could be implemented at the appropriate time in the FDP after a period
of primary oil recovery.

PRD at its discretion can advance the timing of implementation and execution
of any or all of the elements of its proposed amended FDP if warranted and
subject to MEEI consent and regulatory approvals.

 

Collaboration with MEEI and Historical Outstanding Financial Obligations
("HOFO").

MEEI and PRD have jointly agreed to work collaboratively together with a
shared common goal of developing and realising new oil production from Cory
Moruga.

Under the Letter Agreement in Relation to Various Outstanding Matters
Regarding the Moruga Block Exploration and Production Licence dated 27 August,
2007 (the "Agreement") the MEEI calculate the HOFO incurred by previous
operators to be US$4,192,690.

It has been agreed with the MEEI that this will be satisfied by a payment of
US$ 1 million to the MEEI by PRD on the Completion Date together with a
quarterly arrears payment of 7.5% of gross revenue derived from the sale of
all production on Cory Moruga up to 250 bopd and 12.5% of gross revenue
derived from the sale of all production on Cory Moruga above 250 bopd until
the balance outstanding of US$3,192,690 of the HOFO is recovered by the MEEI.

Through these negotiations with the MEEI there is now commercial alignment and
a common objective of accelerating the production from Cory Moruga at the
earliest opportunity.

For the avoidance of doubt there is an element of risk-sharing in that if
production is not achieved then the HOFO liability falls away.

 

Joint Operating Agreement ("JOA") and Operating Committee Meeting ("OCM")

 

T-Rex remains the operator of Cory Moruga approved by the MEEI.

 

T-Rex will convene under the existing JOA an OCM with its partner, who hold a
16.2% interest in Cory Moruga, before the end of 2023.

 

T-Rex will present its budget and work programme for 2024 and a request to its
partner under the terms of the JOA and the Cory Moruga licence commitments for
payment in full of its share (16.2%) of the gross amount of the HOFO of
US$4,192,690.

 

Independent Technical Report

 

Following the Completion of the acquisition of Cory Moruga and the
crystallisation of commercial terms together with the receipt of additional
technical data PRD can now finalise its Independent Technical Report ("ITR")
for Cory Moruga including volumetrics and forecast projected production
profiles.

 

A summary of the ITR will be published before the end of 2023.

 

 

Paul Griffiths, Executive Chairman of Predator, commented:

"We are delighted to have successfully closed out this transaction. Once PRD
participated for the first time directly in face-to-face meetings with the
MEEI in Trinidad during the week of 24(th) September this year and made our
proposals to the MEEI the historical matters that had been outstanding for a
very long period of time were successfully resolved within one month. We
sincerely appreciate the efforts and resolve of the MEEI in concluding
negotiations quickly. We look forward to working collaboratively with the MEEI
towards the common goal of realising the oil production potential at Cory
Moruga.

 

Cory Moruga will provide newsflow over the next 12 months but most
significantly creates the opportunity for cash flow in 2024 to protect against
difficult market conditions and negative investor sentiment caused by
uncertainty generated by regional conflicts and poorer global economic
performance.

 

For the avoidance of doubt, executing the rigless testing programme onshore
Morocco remains our top priority together with moving to a CNG development
subject to regulatory approvals. Everything is in place and all approvals have
been received to commence testing. One final element in relation to our
business development strategy for Morocco is the execution of a potential
Memorandum of Understanding for gas sales. Our preference is for commercial
reasons to have this in place before testing commences and we are working to
finalise this as soon as possible."

 

For further information visit www.predatoroilandgas.com
(http://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 (http://www.predatoroilandgas.com) :

 

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 2023. 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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