REG - Predator O&G Hldgs - Exercise of Share Options Loan to develop asset

Predator Oil & Gas HoldingsAnnouncement

24/11/2022 12:15

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RNS Number : 5330H  Predator Oil & Gas Holdings PLC  24 November 2022

FOR IMMEDIATE RELEASE

24 November 2022

 

               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 and Directors' Loan to raise
£1,256,880  sterling to further develop asset portfolio

 

Highlights

 

·    Commencement of MOU-2 drilling currently projected for mid-December
2022

 

·    All remaining well inventory and drilling materials on way to Morocco

 

·    Exercise of options and Directors' loan will provide aggregate
additional net funds of £1,256,880 for the expansion of the MOU-1 testing
programme and the placing of orders for MOU-3 long-lead drilling items

 

·    Strategic objective to demonstrate a potential gas field production

profile of between 150 to 250 mm cfgpd

 

·    In response to industry interest in respect of the Guercif gas
opportunity based on latest operation update

 

·    Industry interest in the Corrib South successor authorisation
generated by Mag Mell Project public consultation submissions

 

·    Significant progress in Trinidad to resolve historical issues to
allow CO2 EOR to be re-launched

 

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 7,855,486 share options and Lonny Baumgardner, an executive
director, in respect of 7,855,486 share options issued to them pursuant to the
Company's unapproved share option scheme:

dated 18 May 2018 (to subscribe for 4,005,486 new shares of no par value each
in the Company ("New Ordinary Shares")) at 2.8p per share;

dated 27 October 2020 (to subscribe for 3,850,000 New Ordinary Shares) at 5p
per share; and

dated 31 January 2022 (to subscribe for 7,855,486 New Ordinary Shares) at
5.66p per share.

The Company has therefore allotted and issued the total of 15,710,972 New
Ordinary Shares following receipt of the aggregate £749,276 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 New Ordinary Shares to be
admitted to listing on the Official List (standard listing segment) of the FCA
and to the London Stock Exchange for the New Ordinary Shares to be admitted to
trading on the London Stock Exchange's main market for listed securities
(together "Admission").  It is expected that Admission will become effective
at 8.00 a.m. on or around 30 November 2022.

The Company advises that, following this Admission, the Company's issued share
capital will be 383,759,189 shares of no par value, each with one vote per
share (and no such shares are held in treasury). The total number of voting
rights is therefore 383,759,189.

The above figure of 383,759,189 may be used by shareholders as the denominator
for the calculations to determine if they have a notifiable interest in the
share capital of the Company under the FCA's Disclosure Guidance and
Transparency Rules, or if such interest has changed.

 

 

Directors Loan to the Company and Use of Funds

Use of proceeds

The Company wishes to further develop its asset portfolio ahead of a currently
projected date of mid-December 2022 for the commencement of the drilling of
the MOU-2 well. This is in order to take advantage of recent industry interest
in respect of the Company's portfolio of assets in of Morocco, Ireland and
Trinidad following the most recent operations update announced by the Company
on 8 November 2022.

Morocco

In view of the supply chain issues caused by the Ukraine-Russia war resulting
in extended out lead times for key well equipment and materials, the Company
wishes to make advance payments for long lead well inventory for MOU-3. To
ensure rapid implementation and scaling up of a  gas development, pending the
results of MOU-2, and to avail of currently projected attractive forward gas
prices in Europe, an additional gas delivery well needs to be accelerated to
demonstrate the ability to fast-track development drilling. Industry interest
in any future participation in the Guercif gas project has referenced an
export option to Europe should Guercif gas resources be proved up more quickly
by additional drilling. The Company believes that a target gas production
profile of 150 to 250 mm cfgpd will be required in order to create the
potential for winter-focussed gas sales of surplus Moroccan gas into the
European market. The MOU-1 and MOU-2 structure is in close proximity to the
Mahgreb gas pipeline (less than 5 kilometres away) creating the infrastructure
link to a potential European gas market. As a licence operator the Company has
rights of access to the Maghreb Gas Pipeline subject to regulatory approval. A
potential tie-in access point is within the Company's licence area.

To address this additional export option the MOU-1 and MOU-2 testing
programmes are being expanded to include all potential gas reservoirs in the
wells to maximise gas deliverabilities. This involves some additional costs in
equipment and for extra operational days. The costs are justified by creating
an opportunity to demonstrate the ability to quickly scale up gas production
to embrace both a domestic market and a larger export gas markets. This is an
incremental near-term strategic objective that is not in competition  with
the current commitment  to develop initial gas production for the Moroccan
industrial market using a trucked Compressed Natural Gas option.

The total additional costs to fulfil the Company's near-term strategic
objective are forecast to be approximately of £900,000.

 

Ireland

In the context of Ireland's requirement for security of energy supply given
the current global energy crisis and the publicity surrounding the Company's
Mag Mell Project, there has been renewed industry interest in the Company's
application for a successor authorisation for Corrib South. The Company is
allocating £100,000 for outsourcing the preparation of a Data Room for legal,
technical and commercial due diligence purposes for interested parties.

Trinidad

The Company anticipates that Predator Oil & Gas Trinidad Ltd. will shortly
reach a mutually acceptable resolution of its outstanding issues related to
CO2 EOR operations in Trinidad.  As a result the Company is intending to
further develop its ability to deliver CO2 EOR services in Trinidad by
investing £125,000 in expanding and updating its CO2 EOR delivery system and
carrying out further technical due diligence on specific assets it has
identified that are best suited to implementing CO2 EOR operations under
attractive commercial terms.  The recent rise in oil price makes CO2 EOR in
Trinidad commercially attractive. Sequestration of CO2 is an important ESG
objective following the success of the Inniss-Trinity pilot CO2 EOR project.

Total funding requirement to expand the asset portfolio is therefore
£1,125,000.

Directors' loan

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 place their 15,710,972 New Ordinary Shares, resulting from the
exercised share options,  at a price of £0.08 to raise £1,256,877.70 before
expenses of £92,981.

A back-to-back loan arrangement between the Directors and the Company will
enable the Company to utilise all of the net proceeds after expenses
(£749,276 from the exercise of the options and a Directors' loan ("Loan") of
£507,604) from the placing of the Directors' exercised share options to fund
the further maturing of all of its asset portfolio within a relatively short
timescale of up to 3 months.

The executive Directors will be compensated for  prematurely exercising and
then selling their Company share option incentives for the exclusive benefit
of the Company and for providing the Loan.

The commercial terms agreed independently by the non-Executive directors are:

The Loan to incur interest at 4% above SONIA (Sterling Overnight Index
Average) until repayment has occurred.

7,855,486 share options exercisable at £0.08 pence per share to be issued to
Paul Griffiths (Executive Chairman) and to vest after 6 months or upon the
release of a Company RNS with the MOU-2 test results - whichever occurs first.
 

7,855,486 share options exercisable at £0.08 pence per share to be issued to
Lonny Baumgardner (Managing Director) and to vest after 6 months or upon the
release of a Company RNS with the MOU-2 test results - whichever occurs first.
 

 

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

"These exciting times for the Company's shareholders as the commencement of
the drilling of MOU-2 fast approaches and logistical supply chain challenges
are overcome.

However, we recognise the near-term opportunity, whilst European forward gas
prices remain high for the foreseeable future, to prepare for potential
dilution of project equity on favourable commercial terms to capture value for
shareholders at the earliest opportunity.

Furthermore we are making substantive progress with respect to Trinidad and
kick-starting CO2 operations again in 2023 armed with our technical,
commercial, regulatory and legal learning experience gathered over 4 years.

Funding to progress additional activities arising out of recent positive
industry interest in all elements of our portfolio is being provided by the
executive directors. This will allow the Company to move quickly to do the
work necessary to accelerate the potential to reduce project equity on
favourable commercial terms without the requirement for a Prospectus.

Funding provided by the executive directors is on the basis that they believe
that the potential rewards now spanning the Company's entire portfolio far
out-weigh any residual commercial and technical risks."

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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