REG - Predator O&G Hldgs - Exercise of Options and Placing of Shares

Predator Oil & Gas HoldingsAnnouncement

12/05/2023 07:00

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RNS Number : 1759Z  Predator Oil & Gas Holdings PLC  12 May 2023

FOR IMMEDIATE RELEASE

12 May 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")

 

Exercise of Share Options by Directors, Placing to raise £1,449,764 before
expenses to advance Financial Investment Decision for a CNG development and
subsequent reimbursement to Directors

 

Highlights

 

 
 

 

·    Drilling and testing operations to recommence beginning of June

 

·    Targeting potential FID for CNG "Proof of Concept" by September

 

·    Sandjet perforating technology introduces exciting new additional
opportunities for unconventional gas

 

·    Executive directors backing the operating strategy by foregoing
£507,599 of Directors' Loans in favour of compensation based on well testing
results.

 

 

Exercise of Share Options

Predator Oil & Gas Holdings Plc (LSE: PRD), the Jersey based Oil and Gas
Company with near-term gas operations focussed on Morocco, announces that it
has received exercise notices from Paul Griffiths, an executive director, in
respect of 11,183,605 share options and Lonny Baumgardner, an executive
director, in respect of 7,928,444 share options issued to them pursuant to the
Company's unapproved share option scheme:

·    dated 9 November 2022 (to subscribe for 15,000,000 new ordinary
shares of no par value each in the Company ("New Ordinary Shares")) at 10p per
share. 3,401,077 of these options are being so exercised; and

·    dated 23 November 2022 (to subscribe for 15,710,972 New Ordinary
Shares) at 8p per share. All of these options are being so exercised, with the
vesting condition amended with the approval of the independent non-executive
directors to facilitate the exercise of the options before the original
vesting date of 22 May 2023.

 

The Company has therefore allotted and issued the total of 19,112,049 New
Ordinary Shares (the "Option Exercise Shares") following receipt of the
aggregate £1,596,986 subscription price from Paul Griffiths and Lonny
Baumgardner. These shares rank pari passu with the existing ordinary shares of
the Company. Application will be made to the Financial Conduct Authority
("FCA") for the Option Exercise Shares to be admitted to listing on the
Official List (standard listing segment) of the FCA and to the London Stock
Exchange for the Option Exercise Shares to be admitted to trading on the
London Stock Exchange's main market for listed securities (together "Option
Exercise Admission").  It is expected that the Option Exercise Admission
will become effective at 8.00 a.m. on or around 22 May 2023.

It is intended that the Option Exercise Shares issued pursuant to the Option
Exercise Admission will be transferred to various investors for the price of
£0.057.

First Tranche Placing

In conjunction with the exercise of the options in respect of the Option
Exercise Shares and Option Exercise Admission noted above Predator announces
that it has also conditionally placed 2,500,000 of New Ordinary Shares ("First
Tranche Shares") at a placing price of £0.057 to raise £142,500 before
expenses (the "First Tranche Placing").

The First Tranche Placing utilises the Company's existing headroom shares
pursuant to the Financial Conduct Authority ("FCA") restrictions for companies
on the Official List (standard listing segment) of the London Stock Exchange's
main market for listed securities.

The shares to be admitted pursuant the First Tranche Placing rank pari passu
with the existing ordinary shares of the Company. Application will be made to
the FCA for the First Tranche Shares to be admitted to listing on the Official
List (standard listing segment) of the FCA and to the London Stock Exchange
for the First Tranche Shares to be admitted to trading on the London Stock
Exchange's main market for listed securities

It is expected that admission of the First Tranche Shares will become
effective at 8.00 a.m. on or around 22 May 2023.

Second Tranche Placing

Subject to the admission to trading of the Option Exercise Shares and the
First Tranche Shares on the Official List (standard listing segment) of the
London Stock Exchange's main market for listed securities Predator intends to
place 3,822,410 additional New Ordinary Shares ("Second Tranche Shares") at a
placing price of £0.057 to raise £217,877 before expenses (the "Second
Tranche Placing"). The Second Tranche Shares must be issued separately to the
First Tranche Shares as they utilise an increase in the headroom of the
Company pursuant to the FCA restrictions for companies on the Official List
(standard listing segment) of the London Stock Exchange's main market for
listed securities.

The shares to be admitted pursuant the Second Tranche Placing rank pari passu
with the existing ordinary shares of the Company. Application will be made to
the FCA for the Second Tranche Shares to be admitted to listing on the
Official List (standard listing segment) of the FCA and to the London Stock
Exchange for the Second Tranche Shares to be admitted to trading on the London
Stock Exchange's main market for listed securities

It is expected that admission of the Second Tranche Shares will become
effective at 8.00 a.m. on or around 26 May 2023.

 

 

 

Directors' Repayment and Use of Funds

Use of proceeds

The net proceeds of the Placing are targeted at Morocco to cost-effectively
maintain the momentum of the current drilling and testing programme to
accelerate a potential Financial Investment Decision ("FID").

Morocco

MOU-1 testing

The Company is seeking to coordinate for the beginning of next month the
rigless MOU-1 well testing with the commencement of drilling at the MOU-3 well
site, for which the civil works have now been completed,

The rigless testing at MOU-1 will now be carried out using a patented power
jet perforating tool provided by TD Tools Inc. (https://www.tdtoolsinc.com/
(https://www.tdtoolsinc.com/) ) out of the United States through their
European agent Energy Consulting Services, an innovative upstream provider
specialized in engineering consultancy. This perforating technique is very
common in the United States but has not been used in Morocco before.

Sandjet perforating technology uses a pressurised sand slurry which avoids the
requirement for explosives. It increases communication between the reservoir
and the wellbore and allows for multiple perforations in thinly bedded
reservoirs that would otherwise too costly to consider perforating by
conventional methods.

With the Sandjet perforating option an additional zone in MOU-1 can now be
added to the MOU-1 rigless testing programme. This will test an interval of 45
metres with good background gas readings and low gas saturations based on
NuTech log analysis within a gross interval of at least 300 metres. Any flow
of gas from this interval would be significant as it would establish the
potential for a new unconventional gas play covering an area of at least 30
km² tested by MOU-1.

MOU-3 drilling and testing programme

MOU-3 is forecast to penetrate three potential gas reservoirs which if
confirmed would require a contingency for a greatly expanded Sandjet
perforating programme. Reservoir development is expected to be significantly
greater than at MOU-1 based on indirect geological information for the debris
slide from the suspended well MOU-2.

CNG "Proof of Concept" development option

MOU-1 and MOU-3 testing and drilling results in combination with the Company's
CNG development plan and internal project economics  may provide the
necessary information to complete the desktop work to enable a Financial
Investment Decision ("FID") to be taken based on two gas delivery wells and
for a Gas Sales Agreement to be entered into.

A FID gives the Company flexibility and a variety of options to progress and
execute a "Proof of Concept" CNG development with potential gas deliveries at
the earliest opportunity in 2024.

MOU-4 drilling programme

The Company intends to be "drill-ready" to commence MOU-4 well operations at
the earliest opportunity following a review of the MOU-1 and MOU-3 drilling
and testing results in order to be in a position to scale up potential CNG gas
deliveries as the market expands through the de-risking "Proof of Concept".

Whilst there is an opportunity and before additional supply chain issues
develop, the Company seeks to secure the remaining long-lead well inventory
items for MOU-4. In addition it will commence the permitting for MOU-4 and
begin the civil works at the MOU-4 well location.

The MOU-4 well is also being programmed to test the Jurassic, which will
require some specific well inventory items that are not included in the
Company's current well planning process.

The Jurassic target covers an area of 126 km²and is interpreted by the
Company to evaluate an interval drilled by Phillips in 1979 in the TAF-1X
well, approximately 25 kilometres to the southeast of the proposed MOU-4 well
location, within which there were minor gas shows. MOU-4 will test the
potential for improved reservoir development and hydrocarbon charge in what
may be a more favourable geological setting.

Directors' Compensation Arrangements

As the Company is currently unable to issue sufficient shares to fund this
program itself without publishing an FCA approved prospectus, the executive
directors Paul Griffiths and Lonny Baumgardner have therefore agreed, with the
approval of the independent non-executive Board members and Novum Securities
Limited, to transfer their 19,112,049 Option Exercise Shares, resulting from
the exercise of the share options noted above, to Novum Securities Limited at
a price of £0.057 to raise £1,089,387 before expenses.

The exercise price of the share options to be exercised by Paul Griffiths and
Lonny Baumgardner, being £0.08 and £0.10, is of a lesser amount than the
placing price. To deal with the shortfall the independent non-executive Board
members have approved that the existing Directors' Loans dated  1 December
2022 in respect of the loan from Paul Griffiths and 2 December 2022 in respect
of the loan from Lonny Baumgardner (the "Loans") of, in aggregate, £507,599
are capitalised and offset against the shortfall in the exercise prices of the
share options against the funds received from the transfer of their respective
Option Exercise Shares to investors.

The Company will therefore utilise all of the net proceeds after expenses
from the exercise of the Options and the funds raised from the First Tranche
Placing and Second Tranche Placing, to fund the further development of the
drilling and testing programme in Morocco to advance the stage at which an FID
can be taken for a "Proof of Concept" CNG development.

The independent non-executive Board members have agreed that the executive
Directors will be compensated for prematurely exercising their share option
incentives and subsequently selling those Option Exercise Shares to investors
and for capitalising the Loans to their disadvantage by the grant of:

·    7,855,486 new share options exercisable at £0.08 pence per share and
3,328,119 share options exercisable at £0.10 pence per share to be issued to
Paul Griffiths (Executive Chairman) with no vesting conditions; and

·    7,855,486 new share options exercisable at £0.08 pence per share and
72,958 share options exercisable at £0.10 pence per share to be issued to
Lonny Baumgardner (Managing Director) with no vesting conditions,

 

both pursuant to the Company's current share incentive scheme.

 

In addition to the grant of replacement options noted above, to compensate for
the capitalisation of the Loan, Paul Griffiths will receive a cash payment
from the Company of £323,785 upon either:

·    a flow rate of 1 million cfg/day being achieved from any well within
the area of the Guercif Petroleum Agreement; or

·    a flow rate of 100 bopd being achieved from any well in Trinidad for
which the Company is a participant.

 

In addition to the grant of replacement options noted above, to compensate for
the capitalisation of the Loan, Lonny Baumgardner will receive a cash payment
from the Company of £183,813 upon either:

·    a flow rate of 1 million cfg/day being achieved from any well within
the area of the Guercif Petroleum Agreement; or

·    a flow rate of 100 bopd being achieved from any well in Trinidad for
which the Company is a participant.

 

Related Party Transaction

Paul Griffiths and Lonny Baumgardner are executive directors of the Company.
The agreement between the Company and Paul Griffiths and Lonny Baumgardner to
be compensated following their early exercise of their share options, referred
to above, are considered to be related party transactions.

Alistair Jury and Carl Kindinger, being the independent directors for the
purposes of the related party transaction, consider that the terms and
conditions of the reimbursement are fair and reasonable insofar as the
shareholders of the Company are concerned.

Completion of the Placing

Completion of the Placing is conditional upon, inter alia:-

The Option Exercise Shares and First Tranche Shares being admitted to listing
on the Official List (standard listing segment) and to trading on the London
Stock Exchange's main market for listed securities ("First Admission") on or
before 22 May 2023 (or such later date as may be agreed by the Company and
Novum Securities) and the Second Tranche Shares being admitted to listing on
the Official List (standard listing segment) and to trading on the London
Stock Exchange main market for listed securities ("Second Admission") on or
before 26 May 2023 (or such later date as may be agreed by the Company and
Novum Securities).

 

Total Voting Rights

Following the Option Exercise Admission, First Tranche Admission and Second
Tranche Admission, the Company has 425,403,414 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
425,403,414. This figure of 425,403,414 may be used by shareholders in the
Company as the denominator 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.

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

"Whilst we have Star Valley's Rig 101 on location and a smoothly-run,
cost-effective operations base established in the city of Guercif there are
significant savings to be made in drilling costs through economies of scale.
Furthermore the Company can seek to accelerate its timeline for establishing a
commercial CNG project with a capability of being upscaled through organic
cash flow by being "drill-ready" at all times.

Predator currently is the only company in northern Morocco with an active
imminent drilling and testing programme. We need to maximise this competitive
advantage.

Identification of proven, North American Sandjet perforating technology for
introduction into Morocco for the first time is an exciting new development.
Combining our expeditious use of North American, AI-driven NuTech high
resolution petrophysics to identify additional potential gas pays with Sandjet
allows us to evaluate much larger intervals for potential gas flow relative to
the very much more expensive use of conventional ways of perforating with
explosives. This strategy is ideal for the near-term CNG-supplied industrial
market.

The Company has the expertise in designing, engineering, developing,
logistically managing and operating the movement of pressurised gas by truck
following the successful execution of its pilot CO2 EOR project in Trinidad.
Our management also has specific expertise in previously helping to develop
the industrial gas market in Morocco.

We have also made preparations to drill the exciting but higher risk potential
of the Jurassic in a potentially very large structure. Our immediate focus
however is to complete the drilling and testing operations necessary for a CNG
FID.

We have taken the opportunity today in a financial market that is becoming
increasingly more restricted for oil and gas companies, who will nevertheless
form an essential and inescapable element of the Energy Transition, to top up
our available funds to ensure that we can keep momentum going through what is
a period of very intense operational activity."

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 (mailto:Info@predatoroilandgas.com)

 Lonny Baumgardner   Managing Director

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

 David Coffman / Jon Belliss

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

 Christian Dennis

 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 finalised to coordinate with a further drilling
programme beginning in 2022.

 

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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