REG - Predator O&G Hldgs - Corporate Update

Predator Oil & Gas HoldingsAnnouncement

26/01/2024 07:15

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RNS Number : 9676A  Predator Oil & Gas Holdings PLC  26 January 2024

FOR IMMEDIATE RELEASE

26 January 2024

 

               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")

 

 
                           Corporate update

 

 
Highlights

 

·    Independent Technical Report gives unrisked P50 and P10 Contingent
recoverable gas  resources of 109.28 and 234.42 BCF respectively net to PRD.

 

·    Unrisked P50 and P10 Prospective recoverable gas resources of 139.67
and 312.16 BCF respectively net to PRD.

 

·    Independent Technical Report for scoping potential CNG development
gives NPV @10% 128.08 and undiscounted positive cash flow of US$207.504
million net PRD's economic interest with an IRR of 138%.

 

·    Input assumptions 20 mm cfgpd production profile maintained for 6
years to recover 32.85 BCF net PRD at a flat gas price of US$12/mcf.

 

·    Fully funded for all 2024 firm commitments

 

 

 

Predator Oil & Gas Holdings Plc (LSE: PRD), the Jersey based Oil and Gas
Company with near-term operations focussed on Morocco and Trinidad, is pleased
to provide a corporate update.

 

 

Further to the announcement of 12 January 2024 in respect of an operations
update, the Company is publishing today an Independent Technical Report
("ITR") by Scorpion Geoscience Ltd. for the Guercif block and resource
potential of the Moulouya Sub-Area following an evaluation of the 2023
drilling programme results.

 

https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2024/01/Guercif_ITR_20240124.pdf
(https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2024/01/Guercif_-ITR_20240124.pdf)

 

Gas resources

 

Table 1 Unrisked Contingent and Prospective Gas-in-Place and (Recoverable
Resources) BCF (billion cubic feet of gas) net to PRD.

 

 

   Reservoir                                                P90                   P50                      P10               Category
 MOU-1 and MOU-3                                          11.11                  25.38                  47.28             Contingent

 Ma sands                                                  (7.15)               (16.38)                (30.9)
 MOU-1                                                      5.49                 21.86                  66.72             Contingent

 TGB 2 sands                                               (2.19)               (13.12)                (53.38)
 MOU-3 and MOU-4                                          54.49                114.29                 211,31              Contingent

 Moulouya Fan interval                                   (34.86)                (73.56)              (138.02)
 MOU-1, MOU-3 and MOU-4                                     N/A                  N/A                    N/A               Subject to rigless testing

 TGB-6, TGB-4, shallow sands MOU-4, volcanic unit¹
 MOU-3 and MOU-3NW                                          4.41                10.06                  19.60              Contingent

 A sand interval                                           (2.71)                (6.21)               (12.12)
 MOU-5 (MOU-4 NE)                                       127.44                320.15                  682.93              Prospective

 Jurassic carbonate reservoir                           (70.27)              (139.67)                (312.16)

 

¹ Second phase of rigless testing using Sandjet will evaluate these intervals
to determine

  whether the NuTech petrophysical interpretation indicating the presence of
gas can be

  verified for some or all of these intervals.

 

As previously announced the Company's proposed 2024 work programme of rigless
well testing and discretionary appraisal and exploration drilling, subject to
regulatory consent and approvals, is designed to incrementally add potential
resources for scalable CNG development funded expeditiously through managing
organic cash flow.

 

Today's announcement of the expected commencement of rigless testing on or
about 29 January 2024 is the first step in the process focussed on evaluating
specific sands within the broader Ma and TGB  2 intervals in MOU-1 and MOU-3.
For guidance only gas flow rates in the range 1 to 3 mm cfgpd from each of
these wells in a success case would potentially be sufficient to support a
future CNG pilot development option.

 

Depending on the rigless testing results, in particular whether or not there
is any evidence for any rate of reservoir pressure depletion with time, well
test data may be capable of being extrapolated to support the 2C and,
potentially 3C, gas volumetrics shown in Table 1 for the Ma and TGB sand
intervals. Test results and the composition of the test products may also help
to calibrate other sands within these intervals that NuTech petrophysical logs
suggest may be gas-bearing.

 

In the event the rigless test results are in alignment with the possible range
of 2C and 3C recoverable resources, then a scoping CNG gas profile of 20 mm
cf/day maintained for 6 years to recover a gross volume of 43.8 BCF may be
achievable from 4 production wells (2 infill wells to be drilled at an
appropriate time after production has been established and the rate of
reservoir pressure depletion has been measured). Additional infill drilling
may be required depending on well deliverability performances over time.

 

Based on this profile the ITR gives, using a flat industrial gas market price
of US$12 per mcf, an unrisked scoping NPV@10% of US$108 million and an IRR of
138% with undiscounted positive cash revenues of US$ 207.504 million for the
net Predator economic interest, equivalent to an unrisked and undiscounted
US$6.345 million per BCF of CNG production.

 

Timing of "First Gas" depends on a number of third party factors including
government and environmental consents and approvals and the long lead time for
the purchase or leasing of CNG trailers and gas compressors. Once the rigless
testing results become available the CNG services and equipment market can be
evaluated with greater certainty in respect of delivery times.

 

The ITR summarises, amongst other matters: the geological risks; the impact of
potential well formation damage; and the possible origins of the gas sampled
to date pre-testing. It is intended that as far as is possible these risks
will be addressed by the first phase of rigless testing.

 

These risks are enhanced in the case of several zones shown in Table 1
identified in MOU-1, MOU-3 and MOU-4 for rigless testing using Sandjet.
Prudently therefore the Company does not assign any potential resources to
these intervals at this time. Any gas resources confirmed within any of these
intervals would be available for CNG development upscaling for very low
additional development costs.

 

The ITR recognises additional prospectivity for gas in the Jurassic (both
carbonate and clastic reservoirs) in structural and stratigraphic traps which
include the up to 177 km² feature the edge of which was tested by MOU-4. If
successfully proved up by future drilling it would require, once the demand in
the industrial market had been satisfied, a gas-to-power marketing strategy to
underpin a development case and/or an export market through the Maghreb gas
pipeline, located just 9 kilometres from the area of current geological focus
for the Company.

 

The Company is fully funded to complete its entire planned rigless testing
programmes at Guercif.

 

 IRELAND

 

The Company has received since its last operations update a communication from
the GeoScience Regulation Office ("GSRO") at the Department of the
Environment, Climate and Communications informing the Company that
consideration of its application for a successor authorisation to Licensing
Option 16/26 Corrib South is hoped to be concluded during Q1 2024 and that the
GSRO would be writing to the Company shortly in relation to this matter.

 

 

Paul Griffiths, Executive Chairman of Predator, commented:

"We are pleased to be finally making progress on the rigless testing
programme. The initial phase is important to us for designing and implementing
the Sandjet rigless testing programme which will follow on after the Sandjet
operational planning work is completed.

 

Sandjet rigless testing will be focussing on the Moulouya Fan and multiple
zones at other levels which NuTech petrophysical logs suggest may contain
hydrocarbons but which require validation by other means.

 

Cory Moruga planning work is being progressed in Trinidad this week to put in
place a small operations teams to implement the proposed workover operations
after planning is complete and environmental approvals have been received.

 

Ireland has taken us by surprise. We remain cautiously optimistic that we
potentially have a partner for Corrib South in the event a successor
authorisation is awarded. There is no guarantee that the conclusion of the
GSRO DECC process would necessarily result in a positive outcome for the
Company. Corrib South is a quality exploration asset adjacent to the Corrib
gas field infrastructure and was formerly held by Shell under a Reserve
Licence authorisation."

 

 

 

For further information visit www.predatoroilandgas.com (about:blank)

 

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:blank) :

 

Enquiries:

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

 Paul Griffiths                Executive Chairman                                                                                                                                                                                                                                                       Info@predatoroilandgas.com (about:blank)

 Lonny Baumgardner    Managing Director

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

 David Coffman / Jon Belliss

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

 Jerry                                                                                                                                                                                                                                                                                                  Jerry.keen@oak-securities.com
 Keen

                                                                                                                                                                                                                                                                                                      Tel: +44 (0)203 884 9388
 Fox Davies Capital

 Daniel Fox-Davies/James Hehn

 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 operator of the Guercif Petroleum Agreement onshore Morocco which
is prospective for Tertiary and Jurassic gas.  The current focus of the
exploration and appraisal drilling programme is located less than 10
kilometres from the Maghreb gas pipeline.  The MOU-1 well drilled in 2021 and
the MOU-3 and MOU-4 wells drilled in 2023 have been completed for rigless
testing in early 2024. Near-term focus is on supplying compressed natural gas
("CNG") to the Moroccan industrial market. A Collaboration Agreement for
potential CNG gas sales of up to 50 mm cfgpd has been executed with Afriquia
Gaz. Further drilling activity is anticipated in 2024 to further evaluate the
MOU-4 Jurassic prospect.

 

Predator is seeking in the medium term to apply CO2 EOR techniques onshore
Trinidad which have the advantage of sequestrating anthropogenic carbon
dioxide. The acquisition of T-Rex Resources (Trinidad) Ltd. ("T-Rex") is a
first step to realising this objective. T-Rex holds the Cory Moruga Production
Licence. Cory Moruga is a largely undeveloped near-virgin oil field of similar
potential size to the nearby Moruga West and Inniss-Trinity mature oil fields.
The Cory Moruga Production Licence is a potentially significant asset for the
Company with the capability of generating positive operating profits in the
near-term. Capital required for staged field development can be implemented
potentially utilising operating profits generated from an increasing level of
gross production revenues.

 

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. The
applications for successor authorisations remain "under consideration" by the
DECC.

 

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.

Further progress for the Mag Mell FSRUP will be dependent on government policy
in relation to security of energy supply. A generalised FSRUP concept has now
been recognised by the government as an option for security of energy supply.

 

The Company has a small but highly experienced management team with a proven
track record in successfully executing drilling operations in the oil and gas
sector and in acquiring assets where there is a potential to generate multiple
returns for relatively low and manageable levels of investment.

 

 

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