REG - Predator O&G Hldgs - Corporate Update

Predator Oil & Gas HoldingsAnnouncement

08/03/2022 07:00

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RNS Number : 9417D  Predator Oil & Gas Holdings PLC  08 March 2022

FOR IMMEDIATE RELEASE

8 March 2022

 

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")

 

 
      Corporate update - Focus on Security of Energy Supply

 
Highlights

·    Collaborating in relation to European Energy Supply, Storage and
Security

 

·    Agreements to evaluate co-operation on gas marketing

 

·    Agreements to evaluate potential Moroccan farmout

 

·    C02 EOR expansion in Trinidad initiated under existing Memorandum of
Understanding

 

·    Agreement to evaluate opportunity to acquire an interest in a green
hydrogen company

 

·    Financial Advisor appointed

 

 

Predator Oil & Gas Holdings Plc (PRD), the Jersey-based Oil and Gas
Company with operations in Morocco, Ireland and Trinidad focussed on
diversification and security of European energy supply in the context of the
Energy Transition and based on gas as a sustainable lower carbon fuel, is
pleased to announce a corporate update.

 

Ireland

 

Mag Mell Energy Ireland Ltd. is a gold sponsor of Ireland's National Energy
Summit at Croke Park on 26 April 2022, https://energysummit.ie/sponsors/
(https://energysummit.ie/sponsors/) . CEO Paul Griffiths will be taking part
in the Panel Discussion "Collaborating to ensure Energy Supply, Storage and
Security".

 

Agreements

 

As previously announced the Company negotiated a Memorandum of Understanding
("MOU") with a significant downstream marketing entity to work together to
determine the potential market for FSRU gas and to assess the potential to
market gas from seasonal storage operations. The objective is to optimise the
technical specifications of the FSRU and gas storage facilities for gas
send-out to meet periods of high demand and high gas prices.

 

Preliminary discussions with an Asian LNG supplier, amongst others, have taken
place to evaluate the feasibility and possibility of securing LNG supply prior
to a Financial Investment Decision for the offshore Mag Mell Floating Storage
and Regassification Project ("FSRUP"). Potential future gas storage capacity
at the proposed Ram Head offshore subsurface facility is also being considered
by the Company in the wider context of security of European energy supply. All
decisions are subject to the required Irish regulatory approvals being given
in a timely manner at this time of European energy crisis.

 

Morocco

 

Escalating geopolitical tensions have impacted the security of European gas
supply and contributed to surging wholesale gas prices. The Company's strategy
for appraising and developing the MOU-1 gas discovery remains on track. The
release of the Competent Persons Report announced last month defining material
contingent gas resources has been a catalyst for attracting significant
interest in the Company's plans to further explore, appraise and develop gas
in an area covering 7,269 km² and which is connected to the European gas grid
through the Maghreb gas pipeline. Morocco is a country very close to Europe
and strategically located to become a potential future gas supplier for the
continent by means of a significant expansion of exploration and development.
The Company's large Guercif Petroleum Agreement is optimally located to
potentially contribute to developing Moroccan gas.

A company update note has been produced by Novum Securities and is available
at www.predatoroilandgas.com (http://www.predatoroilandgas.com) .

Agreements

The Company is pleased to announced that it has signed Confidentiality
Agreements with a company based in the United Arab Emirates and an Asian
exploration and production company  to evaluate the exploration, appraisal
and development opportunities in the area covered by the Guercif Petroleum
Agreement.

 

Separately the Company has signed a Confidentiality Agreement with a company
in the downstream sector in Morocco to work together to optimise the potential
market for gas from the area covered by the Guercif Petroleum Agreement.

 

The focus of these activities is to seek to build the partnership necessary to
finance the development of the prospective area for gas established by MOU-1
and to accelerate monetisation. The attractive commercial metrics and regional
political tensions demand that the role of gas as the fuel of choice for a
pragmatic Energy Transition and to preserve security of European Energy Supply
becomes a strategic objective.

 

Operational activities

 

The Company continues to focus on the logistical planning for follow-up
drilling to MOU-1 with the objective of developing a multi-well drilling and
testing programme (already including MOU-4 and MOU-5) to provide economies of
scale to spread fixed drilling and well services costs across several wells.

 

The recent increased perception of the value of gas assets close to the
European gas network has created additional financing opportunities for
drilling and development that potentially reduce in the medium term or may
even eliminate in the short term the requirement for significant shareholder
dilution.

 

As a result the Company is continuing to execute its work programme, which is
fully funded, to increase the scale and diversity of its exploration portfolio
of prospective leads as follows:

 

1.    MOU-NE, MOU-2 and MOU-3

 

§ 250 kilometres of 2D seismic reprocessing commenced to refine well
objectives

 

§ Environmental Impact Assessments completed

 

2.    MOU-NW

 

§ Evaluation of the Tizroutine oil seep and potential for oil in the
northwest area of the Guercif Petroleum Agreement

 

FSRU LNG import

 

The Company previously submitted to regulatory authorities an FSRU LNG import
proposal for consideration.

 

With the significant progress made in the planning and design of the FSRU LNG
import facility for Ireland and the worsening situation for security of gas
supply in Europe, the Company believes that it is an opportune time to
re-engage with the regulatory authorities in Morocco to advance an FSRU LNG
solution for Morocco.

 

Trinidad

 

The Company has successfully decommissioned its CO2 EOR surface facilities at
Inniss-Trinity and recovered its downhole equipment for safe off-site storage.
The Company continues to evaluate its options under the Inniss-Trinity Well
Participation Agreement ("WPA") with FRAM Exploration Trinidad Ltd. to recover
significant CO2 EOR revenues that the Company believes it is entitled to under
the WPA and to assess the potential for an amicable settlement resulting from
FRAM Exploration Trinidad Ltd.'s unilateral decision to prematurely terminate
the Inniss-Trinity CO2 EOR project.

 

Agreements

 

The Company is making good progress with Lease Operators Ltd ("LOL") for a new
CO2 EOR joint development project for the PS-1 Block field. LOL is making
excellent progress towards the award of a Certificate of Environmental
Clearance and initial potential CO2 injection and production wells have
been reviewed. LOL currently have 1850 bopd of production onshore Trinidad.

 

Discussions are continuing to create a jointly-owned in-country Special
Purpose Vehicle to develop CO2 EOR projects based on prioritising the
technical suitability of a number of onshore producing fields.

 

Rising oil prices combined with the Company's "Proof of Concept" for CO2 EOR
and CO2 sequestration in Trinidad has created a much more attractive
commercial case for expanding CO2 EOR for "greener" oil production at a time
of rising energy costs and demand.

 

 

Green Hydrogen

 

The Company has taken a strategic decision to add green hydrogen (from the
electrolysis of water) to its business development plans.

 

The Company's management has extensive experience in the natural gas sector in
the areas of regulatory and environmental compliance, use of infrastructure,
Compressed Natural Gas development options, gas storage, well-site gas-fired
power generation, CO2 sequestration and downstream gas marketing and
government relations. The Company's projects can create access to
infrastructure and to potentially significant volumes of future surplus gas,
particularly at times of lower prices during reduced seasonal demand, with
which to be in a position to produce cheap gas-fired, using its own surplus
gas feedstock, well-site electricity for green hydrogen as a replacement for
carbon-intensive fuel oil during the Energy Transition.

 

Surging natural gas prices have re-defined the potential commercial markets
for green hydrogen, which can also contribute to security and diversity of the
Energy Supply.

 

The Company is seeking to become an early mover into a hybrid "green hydrogen
- natural gas" business which could become a significant component of the
Energy Transition and generate potential carbon credits by displacing
carbon-intensive fuels. The Company has the necessary skills to develop "Proof
of Concept", as demonstrated by the implementation of CO2 EOR and CO2
sequestration in Trinidad.

 

Unlike gas, green hydrogen is a stable source of sustainable fuel beyond the
Energy Transition that has a fixed delivery profile, unlike gas where the
delivery profile is impacted by reservoir pressure depletion. This creates the
ability to enter into longer term supply contracts at a fixed delivery rate
for the duration of the contract, therefore contributing to security and
diversity of energy supply.

 

Currently the Company is fully funded to support desk-top studies to advance
green hydrogen opportunities.

 

Agreements

 

The Company is pleased to announced that it has signed a Confidentiality
Agreement with an entity focussed on green hydrogen to evaluate a possible
acquisition of a controlling interest in that entity to develop green hydrogen
(electrolysis of water) and green methanol (using anthropogenic CO2 emissions)
projects.

 

Appointment of Financial Advisor

 

Based on the accelerated development of potential transactions at the project
level, the Company has decided that it is the appropriate time to appoint an
independent Financial Advisor.

 

Agreements

 

The Company has appointed Peterhouse Capital Ltd. as Financial Advisor.

 

The Company has also decided to suspend the potential AIM Admission process as
the impact of the release of the Competent Persons Report on 13 January this
year combined with surging gas prices due to heightened regional instability
in Europe has in the view of the Company re-defined potential shareholder
value that was not being reflected in the AIM Admission process.

 

Other options to develop the Company's extensive portfolio of diverse Energy
Transition projects have assumed primary focus and potentially may give a
better return for shareholders without increasing the corporate running costs,
which an AIM admission would have led to, and without increasing shareholder
dilution based on a potential under-valuation of the Company's assets at a
time of surging commodity prices.

 

The independent legal due diligence work carried out by the advisors during
the early stages of the AIM Admission process is extremely valuable in the
context of adding to the materials required to support due diligence to
execute transactions with third parties at the project level.

 

Broker warrants

 

The Warrant Instruments between Novum Securities Ltd and Predator Oil &
Gas Holdings plc

 

1)    dated 15 February 2019 granting the right to subscribe in cash for
2,000,000 ordinary shares exercisable at a price per share equal to the
subscription price (12p per share)  is being amended to allow the exercise
date of the warrants to be extended by one year to the fourth anniversary of
the date of the Warrant Instrument.

 

2)    dated 24 May 2018 granting the right to subscribe in cash for
2,053,678 ordinary shares exercisable at a price per share equal to the
subscription price (2.8p per share)  is being amended to allow the exercise
date of the warrants to be extended by one year to the fifth anniversary of
the date of the Warrant Instrument; and

 

the Warrant Instrument between Optiva Securities Ltd and Predator Oil &
Gas Holdings plc

 

3)    dated 24 May 2018 granting the right to subscribe in cash for 160,714
ordinary shares exercisable at a price per share equal to the subscription
price (2.8p per share)  is being amended to allow the exercise date of the
warrants to be extended by one year to the fifth anniversary of the date of
the Warrant Instrument.

 

This is in recognition of the fact that the COVID-19 pandemic has had an
unexpected and significant impact on business activities during the last 2
years.

 

These existing warrants have already previously been factored into the fully
diluted share capital of the Company.

 

Directorate changes

 

With immediate effect Dr. Steve Staley is stepping down from the Board to
pursue other interests. The Board wishes to thank him for the significant
contribution that he has made to the Company since admission to the Official
List (standard listing segment) and to trading on the London Stock Exchange's
main market for listed securities Standard List segment in May 2018.

 

The Board is to appoint at least one additional non-executive director with
the relevant experience in corporate governance, financial transactions, ESG
development and, potentially, with some exposure to the green energy sector to
support the Company through its implementation of its business development
strategies through the Energy Transition.

 

Paul Griffiths, CEO of Predator Oil & Gas Holdings Plc commented:

"The Company was formed and its business strategy was initiated in 2015 to
incorporate the intuitive premise that an over-reliance on imported gas to
markets where gas was critical to sustaining security of energy supply would
eventually create niche opportunities for business development. Brexit and
recent events in Eastern Europe have shown the value of maintaining this
unwavering focus on developing a portfolio that defines this strategy.

 

2022 so far has been an exceptionally busy time for the Company and an
opportunity to re-direct resources to demonstrate the significant strategic
value of the portfolio of projects that we are developing to our potential
project partners.

 

The Company is not afraid to take tough decisions to preserve and potentially
enhance shareholder value and reduce unnecessary running costs that do not
contribute to creating  shareholder value."

 

 

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 (mailto:Info@predatoroilandgas.com)

 Lonny Baumgardner  Chief Operating Officer

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

 Jon Belliss

 Optiva Securities Limited                                            Tel: +44 (0) 203 137 1902

 Christian Dennis

 Peterhouse Capital Limited                                           Tel: +44 (0) 207 220 9791

 Charles Goodfellow

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

 Tim Thompson                                                         predator@flagstaffcomms.com (mailto: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 in prospects less than 10 kilometres from the
Maghreb gas pipeline.  The MOU-1 well has been completed and a follow-up
testing programme is being developed and a further drilling programme is under
review.

 

Predator is seeking to further develop the remaining oil reserves of
Trinidad's mature onshore oil fields through the application of CO2 EOR
techniques and by sequestrating anthropogenic carbon dioxide to produce
"greener" oil.

 

In addition, Predator also 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 operations in the oil and gas industry.

 

 

 

 

 

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