REG - Predator O&G Hldgs - Interim Results for the period ending 30 June 2024
25/09/2024 07:00
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RNS Number : 5206F Predator Oil & Gas Holdings PLC 25 September 2024
FOR IMMEDIATE RELEASE
25 September 2024
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")
Report and Interim Financial Statements for the 6 months to 30 June 2024
Financial highlights:
· Fully funded to satisfy all commitments for the next twelve
months
· Preparing the organisational structure necessary to accelerate
the transition to production and a possible future partial divestment and
monetisation of discovered gas onshore Morocco
· Total comprehensive Loss for the 6 months period is £978,238
(£2,361,721 for the 6 months period ended 30 June 2023)
· Cash balance, at period end of £4,352,190 (2023 year end:
£6,484,034)
· A further £1,186,155 (US$1,500,000) held as restricted cash
· £304,476 (before expenses) raised through the exercise of
5,221,203 broker warrants, 2,890,908 of the warrants exercisable at 5.5 pence
per share; 1,780,412 of the warrants exercisable at 5.7 pence per share;
549,883 of the warrants exercisable at 8.0 pence per share
· No material shareholder dilution
· No debt
· Application dated 5 June 2024 to enter the First Exploration
Period of the Guercif Petroleum Agreement submitted which on ratification will
reduce the Company's firm regulatory financial commitments and work programmes
· Issued share capital 570,382,865 (31 December 2023: 565,161,662)
Operational highlights:
· Onshore Morocco initial conventional rigless testing programme
successfully executed and preparations for next stage to evaluate Sandjet
perforating technology performance progressing
· MOU-3 shallow higher pressure gas remapped with gross P50 and P10
gas-in-place of 37.75 and 53.81 BCF respectively - potentially a separate
standalone CNG development project.
· Preparations to drill the MOU-5 well to test the large 187km2
Titanosaurus Jurassic structure have been progressed and refined based on new
desktop seismic modelling of potential reservoirs which has increased gross
gas-in-place estimates to 8.036 and 14.729 TCF - establishing a potential
gas-to-power development option adjacent to the Maghreb Gas Pipeline
· Onshore Trinidad low-cost administrative office established and
in-country operating capability being progressed
· Additional well intervention opportunities identified and being
advanced in the context of economies of scale and enhancing near-term
potential production growth through the application of wax treatments
· Independent Technical Report for Cory Moruga gives gross,
following the acquisition of an additional 16.2% equity interest, Contingent
and Prospective P50 and P10 resources of 14.31 and 21.41 million barrels
respectively
· Offshore Ireland the application for a successor authorisation
for the Corrib South Licensing Option 16/26 has progressed to the final stages
of satisfying GSRO conditions for its potential award and a farmin. Proposal
has been received from a well-funded industry entity with downstream
production
Post reporting date:
· On the 7 August 2024 the Company announced a rigless testing
update and customs clearances on the 12 June and 2 August 2024 for the import
of the Sandjet testing tools and the Baker Hughes logging and coiled tubing
units respectively.
· On the 8 August 2024 the Company gave an update on preparations
for the drilling of the high impact well MOU-5. Based on an updated
Independent Technical Report, taking into account seismic modelling of the
target Jurassic reservoir interval, gave gross P50 and P90 in-place gas of
8.036 and 14.729 TCF respectively.
Based on the evidence of the presence of helium in the MOU-3
analysed gas sample from the Moulouya Fan, the helium potential of the MOU-5
structure and surrounding area was identified for the first time for further
evaluation and follow up through the drilling of MOU-5.
The granting of entry into the First Extension Period of the
Guercif Petroleum Agreement was confirmed.
Predator Oil & Gas Holdings Plc (PRD), the Jersey-based Oil and Gas
Company with near-term hydrocarbon operations focussed on Morocco and
Trinidad is pleased to announce its unaudited interim results for the
six-month period ended 30 June 2024.
Executive Chairman's 's Report
Dear Shareholder,
On behalf of the Board of Directors, I hereby present the unaudited interim
results for Predator Oil & Gas Holdings Plc (the "Group", "Predator" or
the "Company") for the six-month period ended 30 June 2024.
The first six months of 2024 has seen the Company successfully plan and
implement an initial rigless testing programme using conventional perforating
guns for the MOU-1 and MOU-3 wells in the Guercif Licence onshore Morocco.
Planning for a second phase of rigless testing using the Sandjet perforating
option, which does not use explosives, was completed by the end of the period
under review and the Sandjet testing tools imported into Morocco.
In 2023 the Company had extended the Initial Period of the Guercif Petroleum
Agreement by a further 9 months to 51 months to 5 February 2024 ("Amendment
#3") to allow for the acceleration of the one well commitment planned for the
First Extension Period to facilitate it being drilled in the Initial Period
whilst a drilling rig was available on site. Drilling of MOU-4 in 2023 removed
the drilling commitment from the First Extension Period and eliminated the
requirement to put up a new bank guarantee in favour of ONHYM prior to
entering the First Extension Period.
At the end of 2023 a further extension ("Amendment #4) of the Initial Period
by four months to 5 June 2024 was intended to allow for two phases of rigless
testing of MOU-1, MOU-3 and MOU-4 to be completed and the results evaluated
and for a discretionary well, MOU-5, to be drilled. Ratification of Amendment
#4 was announced on 1 May 2024, as a result of which there was insufficient
time to schedule the Sandjet rigless testing and the drilling of MOU-5 before
5 June 2024, whilst the Company had the valid Exploration Permits required for
Moroccan customs clearances for the necessary well inventory and chemicals
required to complete the proposed drilling and testing operations.
An application to enter the First Extension Period was submitted to ONHYM by 5
June 2024 in accordance with the earliest permitted date aligned to the
regulatory process with the expectation that the ratification would be
forthcoming as early as possible after 5 June 2024. By the end of the period
under review the regulatory process to grant entry into the First Extension
Period was still progressing.
At all times the Company was focused on choreographing a complex schedule of
regulatory approvals, the timing of which were outside of the Company's
control; the logistical demands of the supply chain; and the restricted
availability of well and testing services within limited time slots dictated
by the service providers.
Financial prudence was exercised at all times to reduce premature commitments
that may have incurred unnecessary standby time and costs waiting on final
approvals.
Entry into the First Extension Period will confirm that the Company has
satisfied all of its exploration and financial commitments for the Initial
Period and will have eliminated its contractual drilling commitment for the
First Exploration Period and any requirement to increase its existing bank
guarantee, which remains in place. MOU-5, in the context of licence
commitments, therefore, becomes a discretionary well which could potentially
be counted towards replacing a seismic commitment later in the timescale of
the First Extension Period.
The First Extension Period will provide the necessary timescale to potentially
progress an Exploitation Concession and for further phased implementation an
extended of the testing program necessary to fully evaluate the production
potential of the discovered gas to date. Gas samples whilst drilling MOU-3
from several independent reservoir zones were analysed in Norway and confirmed
to be of a gas quality ideal for a short-term Compressed Natural Gas
development. Inflow of gas into the wellbore was experienced whilst drilling
the shallowest MOU-3 reservoir under-balanced. The Company is therefore
confident that it can find the solutions to overcome the formation damage
experienced by the deeper reservoirs caused by drilling over-balanced.
Potentially significant gas resources were defined in its Independent
Technical Report for the Guercif block published during the period under
review.
The MOU-5 drilling location was required to be updated to take into account,
in accordance with good ESG practices, the need to avoid surface irrigation
structures and a water well supplying local farming communities and regulatory
requirements relating to the floodplain domain of the Moulouya river.
Medium-term gas development strategies focused on carrying out the work to
demonstrate the gas-to-power potential of the large MOU-5 structure adjacent
to the Mahgreb Gas Pipeline in the event of a successful drilling programme.
By the end of the period under review the Moroccan business development
strategy had sufficient technical and commercial information and momentum to
facilitate planning for a future partial divestment option for the CNG project
based on a staged monetisation process. The Company believes that the natural
partner or partners for CNG gas in Guercif would be a Moroccan entity, given
the high demand for gas from the industrial and potentially the transport
sectors. An indigenous entity would be in a better position to consolidate the
CNG business in Morocco and navigate through the regulatory framework. The
Company believes that its resources should be equally deployed to accelerate
early stage exploration, such as the exciting MOU-5 drilling opportunity,
where the risk versus reward ratio is very high. This aligns also with the
change in post-COVID investor appetite in the public markets.
The Company has progressed to establish a low-cost administrative office and
operating function onshore Trinidad.
Opportunities exist in Ministry licences in Trinidad to initially work over
existing wells by applying different skill sets and new technologies aimed at
enhancing well productivities to better utilise its consolidated tax losses in
its wholly-owned subsidiary T-Rex Trinidad Limited. Primary emphasis is
focussed on legacy wells that have tested oil in higher pressure reservoirs
but remained undeveloped. The business model is fundamentally different to
those pursuing well workovers for low well deliverabilities in old mature
producing fields with very low reservoir pressures.
The Company published an Independent Technical Report ("ITR") by Scorpion
Geoscience Ltd. for the Cory Moruga block and resource potential of the
Snowcap Discovery. It concluded a Sale and Purchase Agreement to add the
remaining 16.2% interest in the Cory Moruga Licence, the Ministry of Energy
and Energy Industries consent was obtained in August 2024, for zero cash and
share consideration. Furthermore, it technically re-evaluated the Jacobin-1
well on the Cory Moruga licence and determined that this tested oil reservoirs
in a small new field, isolated from the Moruga field in an adjoining licence
to the south and the Snowcap-1 field to the north.
The Company has determined that there are several "new technology" options for
improving well deliverability, including Sandjet rigless testing, but based on
the Jacobin-1 technical data, which are the most recent in the Cory Moruga
Licence, then the potential for applying the latest wax treatments may prove
to be more successful in achieving the Company's objectives.
Additional onshore opportunities have been and continue to be reviewed onshore
Trinidad with a view to determining compatibility with the Company's preferred
low cost development options for increasing production and potential cash
revenues.
Developing the potential for net revenues from production will provide the
Company with a safety net to finance overheads and for organic investment in
future discretionary work programmes.
The Company continues to progress its application for a successor
authorisation to Licensing Option 16/26 Corrib South offshore Ireland through
the GeoScience Regulation Office ("GSRO") at the Department of the
Environment, Climate and Communications ("DECC"). During the period under
review the Company moved closer to satisfying the last remaining conditions
required by the DECC to recommend an award of the Corrib South successor
authorisation. The Company has a farmin proposal for Corrib South to conclude
immediately upon award of a successor authorisation. It is not expected that
the award of a successor authorisation could potentially take place until
after the next General Election in Ireland forecast for Q4 2024.
The Energy Transition, "Security of Energy Supply" and "Cost of living Crisis"
were critical issues in 2023 and whilst these issues have ameliorated somewhat
at the beginning of 2024 they still remain of fundamental importance for the
well-being of the global economy. The "Green Revolution" is slowing in pace as
the timescales for implementation are stretched out and the investment models
become even less robust without larger government subsidies fuelled by
increasingly squeezed taxpayers. The informed narrative in relation to the
"Energy Crisis" and the dawning of the practical realisation that net zero CO2
emissions cannot be achieved without a period of transition has resulted in an
increased willingness to invest in the hydrocarbon sector in 2024 and has
increased the number and value of acquisitions and mergers.
Business development strategy needs to have flexibility at all times to meet
the volatility created by "Insecurity of Energy Supply" and declining
investment in the sectors by banks and other mainstream financial lenders to
suit "green washing" agendas to appease popular myths and avoid the pragmatic
discussion of an energy transition. The Company believes that indigenous
engagement in the onshore areas where it operates can provide solutions that
ultimately sees energy assets necessary for securing energy supply security in
the hands of local entities with access to funds that can be used to acquire
ownership of assets that have been de-risked by skilled operators and prepared
for development.
The Company has had no requirement during the period under review to
strengthen its finances through a Placing. It is fully-funded to carry out its
firm work programmes over the next 12 months whilst retaining enough
discretionary cash as and when required in the event additional well
intervention operations are required, or by re-purposing spending for
potential drilling operations, to enhance its existing well portfolio in
Morocco and Trinidad in a production context. The Company remains totally
debt-free.
The outlook for the remainder of 2024 will see the initial Sandjet rigless
testing programme in Morocco completed and longer term pressure monitoring of
the MOU-3 well Ma Sand reservoir instigated. Depending on the data collected
and analysed there may or may not be a requirement for additional work to
demonstrate the production capabilities of the MOU-3 well. At this point in
the future a partial divestment process of the CNG project may be initiated.
Delivering the MOU-5 high impact drilling programme remains an absolute
priority.
The Cory Moruga Project is a potential opportunity to generate positive cash
flow by the end of 2024 and is therefore also being given a high priority by
the Company.
I should like to thank our shareholders, our Board of directors and our
colleagues in Morocco and Trinidad for their continued support and
commitment. Our team has frequently found ways to adapt to regulatory and
logistical challenges. A key objective going forward will be to increase the
pace at which the Company assesses potential additional M&A transactions
and potentially seeks new early stage drilling opportunities. There are some
exciting developments currently being progressed and we are not afraid to use
some of our assets to create near-term value and longer term royalty income to
leverage the advance of high-impact drilling. This reflects the changing
public market landscape and indeed global financial environment focussed on
consolidation and instant returns for investors.
A strategic task for the Board to consider going forward, given the Company's
drive towards establishing downstream production and potential future partial
divestment of gas assets suitable for CNG development in Morocco, will be to
re-purpose and diversify its project teams to meet technical objectives
defined by the Board and to ensure that these teams are effectively
coordinated to accelerate project development. A key deliverable will always
remain the drilling of the MOU-5 well in a timely, safe and cost-effective
manner in line with best industry practices. The MOU-5 well programme is much
simpler to implement and manage compared to the additional well planning
requirements necessary to efficiently drill the CNG gas reservoirs currently
discovered by our 2021 and 2023 drilling campaigns. Now that the "high octane"
highly focussed exploration programme in Morocco has been successfully
completed to de-risk the gas potential of the Guercif Basin in an area that
had never previously been explored, attention is shifting to provide the
technical basis for monetisation.
Operational overview
Morocco
The Phase 1 rigless testing programme was designed to confirm potential
formation damage caused by heavy drilling muds used whilst drilling and to
estimate the minimum depth of penetration of drilling mud into the potential
reservoir formations.
This information was an important input for designing the Phase 2 Sandjet
rigless testing programme, including perforating parameters, and for
evaluating additional potential reservoir intervals interpreted by NuTech but
where conventional wireline logs were potentially impacted by deep invasion of
drilling mud into these intervals.
In order to carry out Phase 1 rigless testing, conventional 111/16"
perforating guns, being the only option available at the time to allow Phase 1
rigless testing to commence before 5 February 2024 and the end of the
extension of the Initial Period of the Guercif Petroleum Agreement facilitated
by Amendment #3, were used.
It was recognised that the perforating guns were likely to be under-sized but
a third party analysis indicated a maximum 12" penetration into the reservoir
formation versus their interpreted zone of formation damage for the TGB-2
Sand, for example, in MOU-1 of 8".
Therefore, it was assessed that the Phase 1 rigless testing programme would at
least establish a minimum extent for formation damage around the wellbore of 8
inches based on the above third party information. This would assist in
designing more appropriate Sandjet perforating parameters.
Operations summary
Phase 1 rigless testing operations commenced on 10 February 2024 after arrival
at the well site of the explosives required for the perforating guns and
allowing for some adverse weather conditions which prevented crane work.
All four zones in MOU-1 and MOU-3 to be tested were perforated and operations
were completed on 19 February 2024 with the crews and equipment being
demobilised. Operations took 10 days versus the pre-testing forecast of up to
14 days.
Results
For all four zones tested the under-sized 111/16" perforating guns failed to
penetrate beyond the zone of formation damage caused by the necessity to use
heavy drilling muds whilst drilling.
Gas analysis of isotube gas samples from MOU-3
Seven gas samples collected in isotubes in MOU-3 whilst drilling at measured
depths of 446, 508, 555, 750, 817, 846 and 1395 metres were analysed by
Applied Petroleum Technology (UK) Ltd. ("APT") in their Oslo laboratory. Gas
composition is in the range 98.04 to 99.57% methane, making it ideal for a
Compressed Natural Gas development with minimum processing. Isotope analysis
indicates the gas is biogenic in origin.
Planning work continued throughout the period to scope out the parameters for
Phase 2 rigless testing using Sandjet. Sandjet testing tools were imported
into Morocco on 12 June 2024.
The primary objective of the Sandjet rigless testing programme is to
effectively reach beyond the zone of formation damage caused by the
requirement for over-balanced drilling during drill operations, which
prevented the well from flowing gas.
Remapping of the shallow, 11-metre thick, higher pressure, gas reservoir
between 339 and 350 metres MD KB in MOU-3 that was not logged resulted in an
upgrade of gas-in-place to gross P50 and P10 estimates of 37.75 and 53.81 BCF
respectively.
Preparation for the drilling of the MOU-5 structure continued. The well
location was moved 277 metres to the northwest of the original location to
avoid a surface irrigation feature and water well that supported local
farmers. This resulted in a slightly deviated well plan to reach the primary
target at the proposed location on 2D seismic line 03-MIL-06. An adjustment to
the well inventory requirements was planned for.
Seismic modelling with the creation of seismic inversions identified multiple
low impedance zones in the primary Lower Jurassic target in the MOU-5
structure. This was interpreted as potentially indicating thick and porous
reservoir development. Reservoir development is forecast to occur between 800
and 1,000 metres MD KB and the exploration well is not expected to take longer
than 12 to 14 days to drill.
Upgraded gas-in-place based on the new reservoir potential gave gross P50 and
P90 estimates of 8.036 and 14.729 TCF respectively.
Trinidad
Following the Sale and Purchase Agreement ("SPA") being executed between T-Rex
Resources Trinidad Limited ("T-Rex"), a wholly owned subsidiary of Predator
Oil & Gas Holdings Plc, and the current third-party Trinidad partner for
the assignment of a 16.2% interest in the Cory Moruga "E" Block, the Ministry
of Energy and Energy Industries consent was obtained in August 2024, the
Company has continued to focus on developing a portfolio of well workovers in
the Cory Moruga Licence. Work has included site restoration and maintenance of
access roads and seeking quotes for in-country well services. STOW
certification has been advanced to allow T-Rex Trinidad Limited to
re-establish its status as a field operator.
A new well for workover, additional to Snowcap-1 and Snowcap-2ST1 has been
identified. This well is suitable for a pilot wax treatment of several
oil-bearing reservoirs within a gross interval 2,500 feet thick.
A review of 3D seismic data indicates that Jacobin-1 is a separate structural
compartment not drained by the adjacent and producing Moruga West oil field. A
recent fluid level measurement in the well confirms that the reservoirs are
close to virgin reservoir pressure, indicating that initial well test rates
should be close to those for the five correlatable reservoirs in the adjoining
Moruga West field - one of which, the Herrera #3 Sand, in MW-75 had an initial
flow rate of 60 bopd and a recovery of 103,600 barrels of oil.
A target initial production rate in the guidance range of 50 to 200 bopd is
realistic, with the higher end dependent upon the success of an effective wax
treatment. Utilising the significant tax losses in T-Rex improves project
economics by significantly reducing Petroleum Profit Tax.
An evaluation of the legacy production test data for Snowcap-1, inherited with
the acquisition of T-Rex, is in agreement with potential recoverable oil
estimates from the Company's new in-house 3D seismic interpretation and new
reservoir maps. There is a strong expectation that production can be restored
at former levels following remedial downhole work.
An Independent Technical Report for Cory Moruga was commissioned and gives
gross, following the acquisition of an additional 16.2% equity interest,
Contingent and Prospective P50 and P10 resources of 14.31 and 21.41 million
barrels respectively.
Ireland
No activities were carried out in respect of Corrib South Licensing Option
16/26.
Company strategy is to focus on satisfying the financial criteria determined
by the GSRO within the DECC to secure the award of a successor authorisation.
Maintaining the dialogue with the preferred farminee is also an important
consideration in terms of enhancing the ability to satisfy the financial
criteria required by the application process with the GSRO.
Financial review
The Company reported an operating loss for the 6 months period is £978,238
(£2,361,721 for the 6 months period ended 30 June 2023). The decrease in
operating loss is largely attributable to absence of drilling activity and a
focus on rigless testing operations in Morocco.
Administrative expenses for the period to 30 June 2024, which included a
£169,044 (£1,444,227 for the 6 month period ended 30 June 2023) fair value
expense to share options, have been reduced to £1,041,529 (£2,311,893 for
the 6 months period ended 30 June 2023), primarily due to the reduction in
share-based payments.
The Company is finishing the reporting period with cash reserves of
£4,352,190 (2023: full year £6,484,034) and restricted cash of £1,186,155
(2023: full year £1,178,189) in the form of the security deposit for the
Guercif Bank Guarantee in favour of ONHYM.
£304,474 (before expenses) has been raised through the exercise of 5,221,203
broker warrants, 2,890,908 of the warrants exercisable at 5.5 pence per share;
1,780,412 of the warrants exercisable at 5.7 pence per share; 549,883 of the
warrants exercisable at 8.0 pence per share. 3,000,000 share options have
been granted at an exercise price of £0.125. 4,650,000 share options lapsed.
The Company has no debt nor outstanding directors' loans.
The Company is well-capitalised for its committed work programmes over the
next 12 months, free of debt and is in a position to deploy prudent levels of
administrative expenditure focused on enhancing and promoting the potential of
the Company's portfolio.
Summary
During the period under review, the Company has successfully executed its
Phase 1 Moroccan rigless testing programme to confirm formation damage and
support its NuTech interpretation for the presence of gas reservoirs. This has
allowed the Company to plan the next stage of rigless testing using Sandjet.
The shallow unlogged higher pressure gas reservoir in MOU-3 has been remapped
with gross P50 and P10 gas-in-place of 37.75 and 53.81 BCF respectively. This
is potentially a separate standalone CNG development project.
In the same period the location of the MOU-5 drilling prospect has been
adjusted in line with good ESG practices to protect local farmers by avoiding
surface irrigation schemes and critical water wells. Desktop seismic modelling
has identified several potential high quality reservoir zones within the
primary Jurassic target to be evaluated by the well that has uplifted gross
P50 and P10 gas-in-place estimates to 8.036 and 14.729 TCF. The development
concept envisaged for Jurassic gas is gas-to-power via the Maghreb Gas
Pipeline located within 5 kilometres of the MOU-5 structure.
Granting of the entry into the First Extension Period of the Guercif Petroleum
Agreement is well advanced and, once confirmed, allows for improved
reliability for the scheduling of the MOU-5 drilling programme.
Financial discipline has ensured that the Moroccan portfolio of prospects is
being explored and developed in a cost-effective manner. This has allowed the
Company to maintain an undiluted interest in its assets thereby providing the
materiality necessary to attract larger entities to assist in addressing
future monetisation of the assets.
Onshore Trinidad we have consolidated our equity position in the Cory Moruga
Licence with the acquisition for no cash or share consideration of the
remaining 16.2% interest, the Ministry of Energy and Energy Industries consent
was obtained in August 2024.
A new potential well workover has been identified, Jacobin-1, which is located
in a separate structure that has not been depleted by the adjoining and
producing Moruga West field.
Current focus is on developing a wax treatment appropriate for the wells which
are in the current well workover programme to facilitate improved well
deliverability and reservoir flow assurance. Initial indications are
encouraging that the proposed treatments will achieve the desired objectives.
In Ireland significant progress has been made in narrowing the differences
between the GSRO department of the DECC and the Company in respect of the
Company meeting the financial criteria for the award of a successor
authorisation to the Corrib South Licensing Option 16/26. The Company has
received a farmin proposal for Corrib South, in the context of addressing
Ireland's security of energy supply, that can potentially conclude immediately
upon the award of a successor authorisation.
On behalf of the Board, I would like to thank our shareholders for their
continued support of the Company. We look forward over the next 12 months to
continue making positive progress towards monetising our discovered gas in
Morocco, potentially through a partial or complete divestment of the CNG
Project and in executing the MOU-5 drilling programme for the "World Class"
multi-TCF MOU-5 structure.
Paul Griffiths
Executive Chairman
Paul Griffiths, Executive Chairman of Predator, commented:
"We are excited about the exploration potential that the multi-TCF MOU-5
structure has to deliver a future gas-to-power project adjacent to the Maghreb
Gas Pipeline. There are few such onshore opportunities around the world
adjacent to infrastructure and a gas market with attractive gas prices
supported by a benign fiscal regime that form a better risk versus reward
proposition, particularly given the low cost of drilling.
In 2021 this area of the Guercif Basin was unknown as a potential gas
province. We believe that we have sufficiently advanced the case for Guercif
gas for a potential CNG market over the past 3 years to be optimistic in
respect of a future partial or complete divestment of the CNG Project to
accelerate monetisation subject to a fully funded investment in completing all
the elements of the testing programme required to demonstrate the production
capabilities of the discovered gas in Guercif.
In Trinidad we are working initially towards consolidation of well workover
opportunities and executing the first workover utilising a novel wax treatment
technique. We are aware of other opportunities to acquire producing assets for
no cash consideration to help consolidate our ability to fully utilise the
substantial tax losses we inherited through the acquisition of T-Rex.
In Ireland progress has been made with regard to obtaining a successor
authorisation for the Corrib South Licensing Option 16/26 and a farmin
proposal justifies our position to play the "waiting game".
Strategically the Board is balancing the benefits of progressing through the
process towards an Exploitation Concession in Morocco and a CNG gas
development versus early monetisation of this asset if an attractive
opportunity presents itself. We also consider the positive merits of high
impact drilling, such as MOU-5 and similar new venture opportunities that we
are evaluating. Realising value for the Guercif CNG project whilst retaining a
share of future profits based on attaining milestones linked to the current
estimate of contingent and prospective gas resources aligns with current
investor and public market appetite for near-term, activity-driven investment
opportunities.
During the period we have not materially diluted the share capital to make
progress on developing our portfolio of projects. We remain fully funded for
all our firm commitments over the next 12 months.
The next 6 to 12 months will be important in terms of the direction of travel
of the Company as we seek to capitalise on monetising certain assets; building
a production income; and staying focused on high reward MOU-5 drilling and
screening similar "First Mover" opportunities."
Paul Griffiths
Executive Chairman
24 September 2024
For further information visit www.predatoroilandgas.com (about%3Ablank)
Follow the Company on X @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%3Ablank) :
Enquiries:
Predator Oil & Gas Holdings Plc Tel: +44 (0) 1534 834 600
Paul Griffiths Chief Executive Officer Info@predatoroilandgas.com (about%3Ablank)
Novum Securities Limited Tel: +44 (0)207 399 9425
David Coffman / Jon Belliss
Oak Securities Tel: +44 (0)203 973 3678
Jerry Keen Jerry.keen@oak-securities.com (mailto:Jerry.keen@oak-securities.com)
Camarco - Financial PR Tel: +44 (0)20 3757 4980
Billy Clegg / Owen Roberts / Fergus Young P (mailto:PredatorOilGas@camarco.co.uk) redatorOilGas@camarco.co.uk
(mailto:PredatorOilGas@camarco.co.uk)
Notes to Editors:
Predator is an oil & gas company with a diversified portfolio of scaled
assets including unique and highly prospective onshore Moroccan gas exposure,
with multiple fully financed upcoming catalysts.
Predator has two high quality, scalable gas projects in Morocco with fast pace
of commercialisation and blue sky potential. Guercif is a shallow CNG biogenic
gas development with multiple traps and at least 4 separate reservoirs with
recently drilled wells due to be flow tested. The Giant Jurassic Titanosaurus
is a shallow thermogenic gas prospect evaluating 249m of potential gross
reservoir thickness in a trap of 187 km2 for pipeline gas to power, with
pipeline 2.5km from wellhead. Moroccan gas prices are high, and the fiscal
terms are some of the best in the world. Predator also has a diversified
portfolio of assets across Ireland and Trinidad, which is a near-term
revenue-generating project.
Predator has an experienced management team with particular knowledge in
Moroccan sub surface and operations. The team specialises in incorporating
modern, proven technologies and processes from Canada and the US to provinces
where the conventional technologies did not allow their hydrocarbon potential
to be revealed.
Predator Oil & Gas Holdings plc is listed on London Stock Exchange's Main
Market with a Standard Listing (symbol: PRD). For further information, visit
www.predatoroilandgas.com (https://www.predatoroilandgas.com/)
Going Concern
Notwithstanding the reduced operating loss incurred during the period under
review and following the £304,474 (before expenses) raised through the
exercise of 5,221,203 broker warrants, the Directors have a reasonable
expectation that the Group will not need to raise funds to continue with its
firm operational commitments and to meet all of its current contractual
liabilities over the next 12 months.
The firm major initiatives for 2024 is to execute the Phase 2 Sandjet rigless
testing of initially MOU-3 in Morocco and to perform a workover on the
Jacobin-1 well using a wax treatment and, if successful, there is a fully
funded Going Concern continency to follow up with workovers of the Snowcap-1
and Snowcap-2ST1 oil discoveries in the Cory Moruga Licence onshore Trinidad
to re-establish oil production. The costs for the programme of Sandjet rigless
testing work in Morocco is currently based on an Approved Financial
Expenditure cost ("AFE") based on actual quotes for well equipment and well
services. The proposed work programme in Trinidad is currently a budget
estimate based on well workover costs incurred when the Company was executing
its CO2 EOR project in the Inniss-Trinity field and escalated to account for
workovers using a wax treatment to enhance well productivity at a higher
sustainable flow rate.
A negotiation with ONHYM was which allows for the current USD1,500,000 Bank
Guarantee in favour of ONHYM for the Initial Period of the Guercif Petroleum
Agreement to be rolled over to the First Extension Period. All work
commitments and financial obligations have been satisfied for the Initial
Exploration Period of the Guercif Petroleum Agreement and there is no increase
in the quantum of the existing bank guarantee upon the granting of entry into
the First Extension Period. There are no firm commitments to be carried out
over the next 12 months, however in the context of the 200km² 3D seismic
programme to be acquired during the First Extension Period of 17 months from
award, the Company may seek to replace the seismic programme with the
discretionary MOU-5 well.
The Company's planning activities for the remainder of 2024 allow for a number
of possible discretionary projects over the next 12 months as follows:
Guercif Licence, onshore Morocco
· MOU-5 exploration/appraisal well to test the Jurassic potential
updip from existing MOU-4 well.
Onshore Trinidad
· Acquisition of producing fields
New Ventures
· Licence application North Africa
Implementation of any or all of these discretionary work programmes will
depend upon a number of factors as follows:
· A partial or complete divestment of the Guercif CNG Project for
back costs and a share of future gas revenues linked to specific production
milestones.
· The short-term outlook for establishing positive cash flow
onshore Trinidad following execution of the well workover programme involving
wax treatments to validate an anticipated initial production rate in the range
50 to 200 bopd.
The MOU-1 well drilled in 2021 and the MOU-3 and MOU-4 wells drilled in 2023
have all been completed for two phases of rigless well testing on the basis of
the presence of formation gas and/or NuTech petrophysical wireline log
interpretation. Sandjet rigless testing has always been the preferred
option in order to extend beyond the potential formation damage resulting from
heavy drilling muds required to safely complete drilling to the pre-drill
final depths.
These wells are therefore potential gas producers subject to the results of
the final phase of rigless well testing (Phase 2 Sandjet), followed by a
period of extended pressure monitoring of the reservoir, and any further well
stimulation required (such as swabbing, nitrogen lift and acidizing) for well
clean up to remove residual drilling mud. There is sufficient unassigned
contingencies in the Going Concern Working Capital Forecast to facilitate any
or all of these well intervention operations.
Therefore, there are currently no circumstances at present for the Company to
consider an impairment provision for MOU-1, MOU-3 and MOU-4 accumulated costs.
The MOU-2 well was drilled in January 2023. The Company announced on 25
January 2023 that the MOU-2 well had been suspended at 1,260 metres measured
depth above the primary pre-drill reservoir target.
Following the drilling of MOU-4 later in 2023 re-interpretation of the MOU-2
penetrated section confirmed that MOU-2 had in fact fully penetrated the
intended primary objective but was not capable of being evaluated by wireline
logs.
MOU-2 recovered 3 gas samples from 3 separate sands between 525.5 and 674
metres measured depth with associated gas peaks. These sands are behind well
casing and therefore were not evaluated by a wireline logging programme.
The MOU-3 well drilled later in 2023 encountered some shallow over-pressured
gas in the equivalent MOU-2 section which could not be logged or tested after
a risk evaluation as the casing design and cement integrity at the shallow
level posed a risk of uncontrolled gas flow if the over-pressured section was
perforated. This interval could be perforated and tested in MOU-2.
MOU-2 was safely suspended for future well re-entry and testing of the shallow
gas.
As MOU-2 is still accessible in the well through a properly engineered
re-entry, there is no basis to consider an impairment provision for
accumulated MOU-2 well costs to date.
The Company has 3 years to complete a work program that includes the workover
of the Snowcap oil discovery and the restoration of production; the
reprocessing of 3D seismic data; carry out a CO2 EOR feasibility desktop
study; and the drilling of a Snowcap-3 appraisal well.
On this basis the Directors have a reasonable expectation that in the
currently unforeseen worst case scenario that the Cory Moruga project cannot
be funded in the future after 12 months, then the Company will have an
opportunity to sell T-Rex Trinidad Limited to an existing indigenous operator
in Trinidad on the basis of transactions that are regularly executed for
assets onshore Trinidad, an example being the 2023 sale of the South Erin
onshore field, by Caribbean Rex Trinidad Ltd for a cash consideration of
USD1.5 million as announced on 14 February 2023. The Cory Moruga opportunity
combined with POGT's CO2 EOR equipment and database may be a potentially
attractive proposition for indigenous Trinidadian companies.
For the Going Concern if there were to be a projected working capital
shortfall within the next 12 months, then the directors will institute a
programme of cuts to directors' and consultant's remuneration and other
third-party corporate costs until such time as the USD1,500,000 Guercif Bank
Guarantee in favour of ONHYM is returned through a sale of the Guercif asset
in a currently unforeseen worst case scenario, or failing this then the
Directors would seek to raise additional funds in the equity markets, assuming
that no farmout of project equity had occurred by such time as additional
working capital was required.
The Company has no debt and no outstanding directors' loans.
The Directors do not believe that either a resurgence of COVID or post-Brexit
issues will adversely influence the Group's business development strategy.
Operations in Morocco can be maintained if that were to occur based on the
operating practices established for the drilling of MOU-1. Brexit will only
create more uncertainty for Ireland's security of gas supply, thereby
enhancing the Company's position in relation to its application for a
successor authorisation for Corrib South Licensing Option 16/26 for which
there is a farmin proposal subject to the award of a successor authorisation.
The directors, having made careful enquiry, are of the opinion that the Group
has adequate working capital to execute its operational commitments over the
next 12 months given that current spending commitments will prevail. The Group
will therefore continue to adopt the going concern basis in preparing the
Interim Report and Financial Statements.
Predator Oil & Gas Holdings Plc
Report and Condensed Consolidated Interim Financial Statements
For the 6 months to 30 June 2024
Condensed consolidated statement of comprehensive income
For the 6 months to 30 June 2024
01.01.2024 to 30.06.2024 01.01.2023 to 30.06.2023
(unaudited) (unaudited)
Notes £ £
Administrative expenses 3 (872,485) (867,666)
Share based payments 3 (169,044) (1,444,227)
Operating loss (1,041,529) (2,311,893)
Finance income 37,936 -
Finance expense - (49,590)
Loss for the period before taxation (1,003,593) (2,361,483)
Taxation - (238)
Loss for the period after taxation (1,003,593) (2,361,721)
Other Comprehensive income
Exchange differences on translation of foreign subsidiaries 25,355 -
Total comprehensive loss for the period attributable to the owner of the (978,238) (2,361,721)
parent
Loss per share basic and diluted (pence) 4 (0.242) (0.592)
Predator Oil & Gas Holdings Plc
Condensed consolidated statement of financial position
As at 30 June 2024
30.06.2024 31.12.2023
(unaudited) (audited)
(restated)*
Notes £ £
Non-current assets
Tangible fixed assets 1,063 1,181
Intangible asset 5 18,225,742 16,812,706
18,226,805 16,813,887
Current assets
Trade and other receivables 6 2,135,994 1,871,960
Cash and cash equivalents 7 4,352,190 6,484,034
6,488,184 8,355,994
Total assets 24,714,989 25,169,881
Equity attributable to the owner of the parent
Share capital 8 33,371,504 33,067,028
Reconstruction reserve 531,233 531,233
Warrants (1,374,041) (1,711,756)
issuance cost
Share based payments reserve 2,462,793 2,844,770
Retained deficit (14,587,407) (13,822,475)
Total equity 20,404,082 20,908,800
Current liabilities
Trade and other payables 9 4,310,907 4,261,081
Total liabilities 4,310,907 4,261,081
Total liabilities and equity 24,714,989 25,169,881
* Restated for review of prior year acquisition accounting during the IFRS 3
hindsight period. Refer to note 5 for further information.
Predator Oil & Gas Holdings Plc
Condensed consolidated statement of changes in equity
For the 6 months to 30 June 2024
Attributable to owner of the parent
Warrants
Share Capital Reconstruction issuance cost Share based Retained deficit Total
£ reserve reserve payments £ £
£ £ £
Balance at 1 January 2024 33,067,028 531,233 (1,711,756) 2,844,770 (13,822,475) 20,908,800
Issue of ordinary share capital 304,476 - - - -
304,474
Share based payments charges - - - 169,044 - 169,044
Share options lapsed - - - (213,306) 213,306 -
Exercised warrants - - 337,715 (337,715) - -
Total transactions with owners 304,476 - 337,715 (381,977) 213,306 473,518
Loss for the period - - - - (978,238) (978,238)
Total comprehensive loss for the period - - - - (978,238) (978,238)
Balance at 30 June 2024 33,371,504 531,233 (1,374,041) 2,462,793 (14,587,407) 20,404,082
Balance at 1 January 2023 16,840,165 1,909,540 (583,825) 1,379,964 (10,210,097) 9,335,747
Issue of ordinary share capital 2,360,380 - - - -
2,360,380
Issue of warrants - - - 210,155 - 210,155
Exercised warrants 1,646,985 - - (874,015) 874,015 1,646,985
Share based payments charges - - - 1,444,228 - 1,444,228
Exercised warrants 79,500 - 44,142 (44,142) - 79,500
Cancelled/expired warrants - - 47,057 - (47,057) -
Warrants issuance costs - - (210,155) - - (210,155)
Transactions costs - (392,945) - - - (392,945)
Total transactions with owners 4,086,865 (394,945) (118,956) 736,226 826,958 5,138,148
Loss for the period - - - - (2,361,721) (2,361,721)
Total comprehensive loss for the period - - - - (2,361,721) (2,361,721)
Balance at 30 June 2023 20,927,030 1,516,595 (702,781) 2,116,190 (11,744,860) 12,112,174
Predator Oil & Gas Holdings Plc
Condensed consolidated statement of changes in equity - continued
Attributable to owner of the parent
Share Capital Reconstruction Warrants Share based Retained deficit Total
£ £ £ £ £ £
Balance 1 January 2023 16,840,165 1,909,540 (583,825) 1,379,964 (10,210,097) 9,335,747
Issue of ordinary share capital 14,500,377 - - - -
14,500,377
Issue of warrants - - - 1,219,130 - 1,219,130
Fair value of share options - - - 1,540,481 1,540,481
Transaction costs - (1,378,307) - - - (1,378,307)
Exercised options 1,646,986 - - (1,250,663) 1,250,663 1,646,986
Exercised warrants 79,500 - 44,142 (44,142) - 79,500
Cancelled/expired warrants - - 47,057 - (47,057) -
Warrants issuance costs - - (1,219,130) - - (1,219,130)
Total transactions with owners 16,226,863 (1,378,307) (1,127,931) 1,464,806 1,203,606 16,389,037
Loss for the year - - - - (4,815,984) (4,815,984)
Total comprehensive loss for the year - - - - (4,815,984) (4,815,984)
Balance at 31 December 2023 33,067,028 531,233 (1,711,756) 2,844,770 (13,822,475) 20,908,800
Predator Oil & Gas Holdings Plc
Condensed consolidated statement of cash flows
For the 6 months to 30 June 2024
01.01.2024 to 30.06.2024 01.01.2023 to 30.06.2023
(unaudited) (unaudited)
£ £
Cash flows from operating activities
Loss for the period before taxation (1,003,593) (2,361,721)
Adjustments for:
Issue of share options 169,044 1,444,227
Finance income (37,936) -
Finance expense - 49,590
Depreciation 118 1,218
Foreign exchange (52,317) 127,385
(Increase) in trade and other receivables (211,474) (1,742,397)
Increase in trade and other payables 49,825 2,714,617
Net cash (used in) / from operating activities (1,086,334) 232,919
Cash flow from investing activities
Capitalised costs - Project Guercif - Morocco (1,392,570) (6,165,083)
Capitalised costs - Cory Moruga - Trinidad (20,466) -
Net cash used in investing activities (1,413,036) (6,165,083)
Cash flows from financing activities
Proceeds from issuance of shares, net of issue costs 304,476 3,693,921
Finance Income received 37,936 -
Finance expense paid - (49,590)
Net cash generated from financing activities 342,412 3,644,331
Effect of exchange rates on cash 25,114 (35,322)
Net (decrease) in cash and cash equivalents (2,131,844) (2,323,155)
Cash and cash equivalents at the beginning of the period 6,484,034 3,323,161
Cash and cash equivalents at the end of the period 4,352,190 1,000,006
Predator Oil & Gas Holdings Plc
Notes to the condensed consolidated interim financial statements
For the 6 months to 30 June 2024
General information
Predator Oil & Gas Holdings Plc ("the Company") and its subsidiaries
(together "the Group") are engaged principally in the operation of an oil and
gas development business in the Republic of Trinidad and Tobago and an
exploration and appraisal portfolio in Ireland and Morocco. The Company's
ordinary shares are listed on the London Stock Exchange on the Equity Shares
(Transition) Segment. Equity Shares (Transition) Segment requires companies to
comply with UKLR22 as opposed to the previous LR14.
Predator Oil & Gas Holdings plc was incorporated in 2017 as a public
limited company under Companies (Jersey) Law 1991 with registered number
125419. It is domiciled and registered at IFC5, 3rd Floor, Castle Street, St
Helier, Jersey, JE2 3BY.
Basis of preparation
The condensed consolidated interim financial statements are prepared under the
historical cost convention and on a going concern basis and in accordance with
UK adopted international accounting standards and IFRIC interpretations
adopted for use in the United Kingdom ("IFRS").
The condensed consolidated interim financial statements contained in this
document do not constitute statutory accounts under Companies (Jersey) Law
1991. In the opinion of the directors, the condensed consolidated interim
financial statements for this period fairly presents the financial position,
result of operations and cash flows for this period.
Statutory financial statements for the year ended 31 December 2023 were
approved by the Board of Directors on 09 April 2024. The report of the
auditors on those financial statements was unqualified with the acquisition of
T-Rex Resources (Trinidad) Ltd (note 12) and the capitalisation of exploration
costs being considered key audit matters.
The Board of Directors approved this interim Financial Report on 24(th)
September 2024
Statement of compliance
The Interim Report includes the consolidated interim financial statements
which have been prepared in accordance with International Accounting Standard
34 'Interim Financial Reporting'. The condensed interim financial statements
should be read in conjunction with the annual financial statements for the
year ended 31 December 2023, which have been prepared in accordance with
UK-adopted international accounting standards.
Going concern
The Group's cash flow projections indicate that the Group should have
sufficient resources to continue as a going concern. As at 30 June 2024 the
Group had cash of £4.35 million (31 December 2023: £6.5 million), no debt
and minimal licence commitments for the ensuing year. As a result, the Group's
overheads will not require funding for a minimum of 12 months from the date of
this review. In addition, the Group is fully funded for all firm operational
commitments for 12 months from this date of review.
Heretofore the Group has not generated revenues from operations. Going
forward the Group will depend on raising equity, debt finance and licence and
or joint venture partnerships to finance the Group's projects to maturity and
revenue generation.
The Group's subsidiaries are funded by inter-company loans advanced by
Predator Oil & Gas Holdings plc ('the Company'). The recoverability of the
inter-company loans advanced depends also on the subsidiaries realising their
cash flow projections.
The Board have reviewed a range of potential cash flow forecasts for the
foreseeable future, including reasonable possible downside scenarios. This has
included the following assumptions:
1. Trinidad - Cory Moruga licence
For Predator Oil & Gas Trinidad Ltd. where production revenues from its
wholly Trinidad owned subsidiary, T-Rex Resources (Trinidad) Limited ('TRex')
are forecast to be generated in the early part of 2025 following a program of
well workovers underway in H2 2024. The workovers will be funded out of
existing cash resources. Leading into the first half of 2025 production
revenues are forecast from the near-term well workovers of the Jacobin-1 and
Snowcap-1 field wells to re-establish production and the medium-term
implementation of a Field Development Plan, where project economics have been
stress-tested at lower oil prices. Accumulated material tax losses in T-Rex
significantly improve the near-term positive cash flow projections even at a
lower oil price. The Licence provides the Group with the potential to
generate strongly positive cashflows so as possibly to contribute organically
towards further development of the Group's assets. Capital required for a
staged field development in 2025 could be funded from operating profits
generated from an increasing level of gross production revenues following the
well workovers. The Group may resort to the option of raising equity funding
to accelerate this development if need be.
The Initial Work Programme agreed by TRex with the MEEI will be conducted over
the next three years without any fixed commitments to be met in the first two
years.
2. Morocco - Guercif licence
In the case of Predator Gas Ventures Ltd., recovery of inter-company loans is
dependent upon the two phases of the Guercif rigless testing programme
successfully recovering commercial quantities of gas that can be developed and
brought to market. Following significant gas discoveries in 2023 a programme
of rigless testing commenced in H1 2024 and continues in H2 2024. This
programme has been impacted adversely by a protracted process of ratification
to secure the First Extension Period. The two phases of this testing programme
are fully funded. The Company is foreseeing the drilling of appraisal and or
development wells in late 2024 and early 2025 to potentially, if successful,
add incremental gas resources to support and extend the production profiles of
a CNG project and, potentially, with the MOU-5 well drilled and tested, gas
resources of a sufficient size to service the gas-to-power market in Morocco.
The evaluation of the potential for helium presence will also be examined.
Funding and timing of this discretionary drilling programme will be dictated
by the opportunity for partial monetisation of gas assets in Guercif and or an
equity placing and or production revenues generated by Cory Moruga. The
Moroccan gas market is commercially attractive and even relatively low volumes
of discovered gas are likely to be economic. The Collaboration Agreement with
Afriquia Gaz for negotiating a Gas Sales Agreement de-risks the marketing of
even small volumes of gas. Funding for a CNG project likely will be secured by
project finance which may include a leasing arrangement for CNG trailers and
equipment and or a partial sale of equity in the project.
3. Ireland
In the case of Predator Oil and Gas Ventures Ltd., the quantum of
inter-company loan is relatively small and no substantive expenditures are
anticipated going forward in 2024. The Group has agreed in principle with the
Department of the Environment, Climate and Communications, farm-in terms on a
successor authorisation to Licensing Option 16/26 "Corrib South". There are
not likely to be any significant funding implications emerging from this
process in 2024 and H1 2025. The Company is confident that it can demonstrate
that it has the financial capability to satisfy the Corrib South work
programme and has accordingly communicated supporting financial information to
the GSRO. In the future, the potential exists for the Company, as promoters
of a LNG project to receive introduction and service providers' fees and a
free minority equity position in a joint venture vehicle to move to the
project development stage. Alternatively, should an award of a successor
authorisation occur in 2024 or 2025 our Corrib South asset may attract
interest from a Corrib gas field participant possibly resulting in a
monetisation event. Under these circumstances the inter-company loan would
constitute past costs contributing to the level of free equity. The commercial
terms of any future potential transaction may or may not be capable of
satisfying the quantum of the inter-company loan.
Management have also assessed that the carrying value and recoverability of
the investment, including intercompany receivables is ultimately dependent on
the value of the underlying assets of the Group. Further evidence of its
realisable value can also be noted by reference the market capitalisation of
the Group on the London Stock exchange at the date of this report which can be
used as a guide and to provide further assurance of its carrying value
subsequent to the year end.
Cyclicality
The interim results for the six months ended 30 June 2024 are not necessarily
indicative of the results to be expected for the full year ending 31 December
2024. Due to the nature of the entity, the operations are not affected by
seasonal variations at this stage.
New Standards adopted at 1 January 2024
There are no accounting pronouncements which have become effective from 1
January 2024 that have a significant impact on the Group's interim condensed
consolidated financial statements.
Significant accounting policies
The accounting policies applied by the Group in these half-yearly results are
the same as those applied by the Group in its consolidated financial
information in its 2023 Annual Report and Accounts.
Areas of estimates and judgement
When preparing the Group's consolidated interim financial statements,
management undertakes a number of judgements, estimates and assumptions about
recognition and measurement of assets, liabilities, income and expenses. The
actual results may differ from the judgements, estimates and assumptions made
by management, and will seldom equal the estimated results.
The judgements, estimates and assumptions applied in the Group's consolidated
interim financial statements, including the key sources of estimation
uncertainty, were the same as those applied in the Group's last annual
financial statements for the year ended 31 December 2023.
Foreign currencies
The functional currency of the Group and all of its subsidiaries is the
British Pound Sterling, with the exception of T-Rex Resources (Trinidad)
Limited whose functional currency of Trinidad Dollars.
Transactions entered into by the Group entities in a currency other than the
currency of the primary economic environment in which it operates (the
"functional currency") are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated at the
rates ruling at the date of the statement of financial position. Exchange
differences arising on the retranslation of unsettled monetary assets and
liabilities are similarly recognised immediately in profit or loss, except for
foreign currency borrowings qualifying as a hedge of a net investment in a
foreign operation.
1 Financial risk management
The Board continually assesses and monitors the key risks of the business. The
key risks that could affect the Group's medium-term performance and the
factors that mitigate those risks have not substantially changed from those
set out in the Group's 2023 Annual Report and Financial Statements, a copy of
which is available from the Group's website: www.predatoroilandgas.com.
(http://www.predatoroilandgas.com/) The key financial risks are market risk
(including cash flow interest rate risk and foreign currency risk), credit
risk and liquidity.
2 Segmental analysis
The Group operates in one business segment, the exploration, appraisal and
development of oil and gas assets. The Group has interests in three
geographical segments being Africa (Morocco), Europe (Ireland) and the
Caribbean (Trinidad and Tobago).
The Group's operations are reviewed by the Board (which is considered to be
the Chief Operating Decision Maker ('CODM')) and split between oil and gas
exploration and development and administration and corporate costs.
Operating segments are disclosed below on the basis of the split between
exploration and development and administration and corporate.
Europe Caribbean Africa Corporate
For the 6 months to 30 June 2024 (unaudited) £ £ £ £
Gross Loss
Administrative and overhead expenses (22,558) (139,834) (148,890) (468,313)
Share option and warrant expense - - - (169,044)
Finance Income - - - 37,936
Taxation - - (67,535) -
Loss for the period from continuing operations (22,558) (139,834) (216,425) (599,421)
Total reportable segment intangible assets - 4,497,180 - -
Total reportable segment non-current assets - - 13,728,562 1,063
Total reportable segment current assets - 632,710 1,217,629 4,637,844
Total reportable segment assets - 5,129,889 14,946,191 4,638,907
Total reportable segment liabilities - (2,841,327) (558,939) (910,641)
Europe Caribbean Africa Corporate
For the 6 months to 30 June 2023 (unaudited) £ £ £ £
Gross Loss
Administrative and overhead expenses (45,782) (5,059) 171,610 (2,431,444)
Share option and warrant expense - - - (1,218)
Finance Income - - - (49,590)
Taxation - - (238) -
Loss for the period from continuing operations (45,782) (5,059) 171,372 (2,482,252)
Total reportable segment intangible assets - - 11,440,803 -
Total reportable segment non-current assets - - - 2,230
Total reportable segment current assets - 630,577 1,335,744 2,670,689
Total reportable segment assets - 630,577 12,776,547 2,672,919
Total reportable segment liabilities (10,500) (4,574) (1,851,249) (2,101,546)
There are no non-current assets held in the Group's country of domicile, being
Jersey, Channel Islands (2023: £nil).
30.06.2024 30.06.2023
(Unaudited) (Unaudited)
£ £
3. Administrative expenses
Technical Consultancy fees (i) 101,432 42,657
Listing costs 56,101 71,733
Project Allosaurus - 117,000
Broker fees 30,000 12,500
Directors fees 196,835 185,004
Share based payments - options 169,044 1,444,227
Administration fees 85,285 77,602
Bank charges 28,498 27,405
Legal and professional fees 129,217 91,077
Travel expenses 45,241 22,583
Computer/system costs/IT support 480 6,886
Insurance 30,800 46,545
Sundry expenses 3,959 4,968
Annual return fee 1,320 1,350
Depreciation 118 1,218
Website costs 5,277 1,153
Foreign exchange (52,559) 127,385
Audit fee 55,455 30,600
Cory Moruga operating expenses 87,491 -
WHT Payable 67,535 -
1,041,529 2,311,893
(i) During the period ended 30 June 2024, all Executive Directors' technical
consultancy fees for Predator Gas Ventures Limited were capitalised
accordingly.
4 Loss per share 30.06.2024 30.06.2023
(unaudited) (unaudited)
Weighted average number of shares 403,884,950 398,787,674
Loss attributable to ordinary equity holders of the company (978,238) (2,361,721)
Total basic and diluted loss per share attributable to the ordinary equity (0.242) (0.592)
holders (pence)
Diluted loss per Ordinary share equals basic loss per ordinary share as, due
to the losses incurred in 2024 and 2023, there is no dilutive effect from the
subsisting share options.
5 Intangible asset Project Guercif Cory Moruga Total
Gross carrying amount
Balance at 1 January 2023 5,275,720 - 5,275,720
Additions 7,060,272 - 7,060,272
Acquired through Business Combinations - 5,251,937 5,251,937
Balance at 31 December 2023 12,335,992 5,251,937 17,587,929
Prior year adjustment to reflect the fair value of assets acquired on - (775,223) (775,223)
acquisition of T-Rex Resources (Trinidad) Limited
Restated Balance as at 1 January 2024 12,335,992 4,476,714 16,812,706
Additions 1,392,570 20,466 1,413,036
Balance at 30 June 2024 13,728,562 4,497,180 18,225,742
Depreciation and impairment
Balance at 1 January 2024 - - -
Depreciation - - -
Balance at 30 June 2024 - - -
Carrying amount 31 December 2023 (restated) 12,335,992 4,476,714 16,812,706
Carrying amount 30 June 2024 13,728,562 4,497,180 18,225,742
All costs relating to Project Guercif have been capitalised and will be
depreciated once gas discovery is declared commercial and a Plan of
Development has been approved.
The Directors have undertaken an assessment of the following areas and
circumstances that could indicate the existence of impairment:
· The Group's right to explore in an area has expired, or will
expire in the near future without renewal;
· No further exploration or evaluation is planned or budgeted for;
· A decision has been taken by the Board to discontinue exploration
and evaluation in an area due to the absence of a commercial
level of reserves; or
· Sufficient data exists to indicate that the book value will not
be fully recovered from future development and production.
An assessment of the fair value assets and liabilities of T-Rex acquired in
November 2023 have been undertaken. The board has determined that these assets
taken as an integrated set of activities are capable of being managed and
conducted for the purpose of providing a return, and therefore constitute a
business. Accordingly, the transaction has been accounted for in accordance
with IFRS 3 'Business Combinations' which requires the assets acquired and
liabilities assumed to be recognised on the acquisition date at their fair
value.
Parex Resources, the previous holder of the Cory Moruga licence made the
original Snowcap-1 oil discovery and acquired 3D seismic data over the licence
from British Gas. The Herrera #8 sand ("H#8") tested in Snowcap-1 is judged on
a fair and reasonable basis to represent a known accumulation with other
stacked sands (H#1-H#7) requiring additional appraisal and testing to confirm
the extent of producible hydrocarbons. Applying Sandjet perforating technology
may provide an opportunity to add significant future project value with
substantial efficiency savings compared with conventional perforation and
testing methods.
The fair value of the assets acquired have been based on resources as reported
by Scorpion Geoscience Limited in the Cory Moruga Independent Technical Report
including the resource potential of the Snowcap-1 discovery, which gives 2C
and 3C Contingent Resources of 1.40 and 1.84 million barrels respectively and
2C and 3C Prospective Resources of 12.91 and 19.57 million barrels
respectively net to the T-Rex. The after-tax undiscounted net-back is forecast
to be US$19.61 per barrel (using a flat WTI oil spot price of US$76 per
barrel. Project economics support a valuation of NPV10% of US$85 million.
Management considers a 10% discount factor as an appropriate measure of the
risk profile of the project. Simulations at higher discount factors have
validated the viability of the assets.
The Group has recognised £4,497,180 as an intangible asset on consolidation
of TRex's balance sheet with POGT in respect of the valuation of Cory Moruga.
This compares to an intangible asset of £5,251,937 recognised in the Group's
consolidated balance sheet at 31 December 2023. The difference is accounted
for by showing a US$1million part payment for the acquisition of the Cory
Moruga licence as a loan due by TRex to POGT its parent company and not a cost
of acquiring TRex. Accordingly, a prior adjustment of £775,223 has been
recognised.
In addition, following the completion of the annual audit of TRex, a review of
the assets and liabilities acquired was completed. This resulted in an
increase in trade and other receivables of £19,142, with a corresponding
decrease in liabilities.
The amounts recognised in respect of the identifiable assets acquired and
liabilities assumed are:
31.12.23 31.12.23
(audited)
(audited)
Consideration US$ £
Transfer to CEG 1,000,000 810,066
Transfer to MEEI 1,000,000 810,066
FRAM loan unwind 762,216 643,905
Total 2,762,216 2,264,037
31.12.23 31.12.23
(audited)
(restated)
T-Rex Assets and Liabilities £ £
Trade and other receivables 584,130 603,272
Intangible asset 5,251,939 4,476,714
Liabilities (TTD 24,950,313) (3,572,032) (2,815,948)
Total 2,264,037 2,264,037
30.06.2024 31.12.2023
(unaudited) (audited)
(restated)
6 Trade and other receivables £ £
Current
Security deposit (US$1,500,000) (i) 1,186,155 1,178,189
Prepayments and other receivables 949,839 693,771
2,135,994 1,871,960
(i) A security deposit of US$1,500,000 (2023: US$1,500,000) is held by
Barclays Bank in respect of a guarantee provided to Office National des
Hydrocarbures et des Mines (ONHYM) as a condition of being granted the Guercif
exploration licence. These funds are refundable on the completion of the
Minimum Work Programme set out in the terms of the Guercif Petroleum Agreement
and Association Contract. Subject to ratification by a Joint Ministerial
Order, the Bank Guarantee is being rolled over into the First Extension Period
of the Guercif Licence.
30.06.2024 31.12.2023
7 Cash and cash equivalents (unaudited) (audited)
£ £
Barclays Bank Plc 4,332,972 6,417,094
Société Générale 16,313 66,940
Scotiabank 2,905 -
4,352,190 6,484,034
Number of
8 Share capital shares Nominal value
Issued and fully paid
Opening Balance 565,161,662 33,067,028
26 June 2024
Warrants exercised 5,221,203 304,476
570,382,865 33,371,504
30.06.2024 31.12.2023
(unaudited) (audited)
(restated)
9 Trade and other payables £ £
Current
Trade payables (i) 1,365,985 1,448,406
Accruals (ii) 2,773,047 2,655,795
Provisions (iii) 171,875 156,880
4,310,907 4,261,081
(i) Trade payables as at 30 June 2024 includes an amount of GBP 557,939 in
respect of Moroccan withholding tax, an amount of GBP 507,598 in respect of
compensation payments due to the Executive Directors and an amount of GBP
250,000 in respect of performance bonuses due to the Executive Directors.
(ii) Accruals as at 30 June 2024
includes an amount of GBP 2,659,305 (TTD22.3 million) in relation to amounts
payable to the Trinidadian Ministry of Energy and Energy Industries in respect
of past dues on the Cory Moruga licence.
(iii) An amount of US$ 1 million paid to the Trinidadian Ministry of Energy
and Energy Industries on the acquisition of T-Rex Resources (Trinidad) Limited
has been reclassified as a reduction of the provision for past dues on the
Cory Moruga Licence. The amount had previously been recognised as a cost of
the acquisition (see note 5).
10 Other reserves
30.06.2024 31.12.2023
Warrants issuance cost reserve (unaudited) (audited)
No of warrants £ £
Balance brought forward 18,570,179 (1,711,756) (583,825)
Issue of warrants - - (1,219,130)
Exercised warrants at fair value (5,221,203) 337,715 44,142
Cancelled and/or expired warrants - - 47,057
Balance carried forward 13,348,976 (1,374,041) (1,711,756)
Share based payments reserve 30.06.2024 31.12.2023
(unaudited) (audited)
No of share options £
Balance brought forward 48,360,972 2,844,770 1,379,964
Issue of warrants - - 1,219,130
Cancelled share options (4,650,000) (213,306) -
Issue of share options 3,000,000 21,096 -
share based payment charge - 147,948 1,540,481
Share options exercised - - (1,250,663)
Warrants exercised - (337,715) (44,142)
Balance carried forward 46,710,972 2,462,793 2,844,770
11. Share based payments
Share options
The group operates a share option plan for directors.
Paul Griffiths
Share options issued during the periods
There were no share options issued during the period.
Share options exercised during the period
No share options were exercised during the period
Share options held at the period end
· Share options agreement dated 9 November 2022 - 4,171,881 share
options at an exercise price of 10.0p.
· Share options agreement dated 12 May 2023 -3,328,119 share
options at an exercise price of 10.0p.
· Share options agreement dated 12 May 2023 - 7,855,486 share
options at an exercise price of 8.0p.
Lonny Baumgardner
Share options issued during the period:
There were no share options issued during the period.
Share options exercised during the period:
No share options were exercised during the period.
Share options held as at period end:
· Share options agreement dated 9 November 2022 - 7,427,042 share
options at an exercise price of 10.0p.
· Share options agreement dated 12 May 2023 - 72,958 share options
at an exercise price of 10.0p.
· Share options agreement dated 12 May 2023 - 7,855,486 share
options at an exercise price of 8.0p.
Alistair Jury
Share options issued during the period:
There were no share options issued during the period.
Share options exercised during the period:
No share options were exercised during the period.
Share options held as at period end:
· Share options agreement dated 5 July 2022 - 2,000,000 share
options at an exercise price of 8.125p.
· Share options agreement dated 11 October 2023 - 3,000,00 share
options at an exercise price of 12.5p.
Carl Kindinger
Share options issued during the period:
There were no share options issued during the period.
Share options exercised during the period:
No share options were exercised during the period.
Share options held as at period end:
· Share options agreement dated 9 November 2022 - 2,000,000 share
options at an exercise price of 7.75p.
· Share options agreement dated 11 October 2023 - 3,000,000 share
options at an exercise price of 12.5p.
Moyra Scott
Share options issued during the period:
There were no share options issued during the period.
Share options exercised during the period:
No share options were exercised during the period.
Share options held as at period end:
· Share options agreement dated 29 March 2023 - 3,000,000 share
options at an exercise price of 10.0p.
Louis Castro
Share options issued during the period:
There were no share options issued during the period.
Share options lapsed during the period:
On 18 April 2024, 1,000,000 shares options issued to Louis Castro lapsed.
Share options held as at period end:
· No share options held at end of period.
Steve Staley
Share options issued during the period:
There were no share options issued during the period.
Share options lapsed during the period:
On 18 April 2024, 1,650,000 shares options issued to Steve Staley lapsed.
Share options held as at period end:
· No share options held at end of period.
Tom Evans
Share options issued during the period:
There were no share options issued during the period.
Share options lapsed during the period:
On 18 April 2024, 2,000,000 shares options issued to Tom Evans lapsed.
Share options held as at period end:
· No share options held at end of period.
Geoffrey Leid
Share options issued during the period:
On the 18 April 2024, the Company issued 3,000,000 share options at an
exercise price of 12.5p. 1,000,000 share options vested immediately, and the
remaining 2,000,000 share options will vest after 6 months or upon production
from the Cory Moruga Exploration and Production Licence reaching 200 barrels
of oil per day, whichever occurs first.
Share options exercised during the period:
No share options were exercised during the period.
Share options held as at period end:
Share options agreement dated 18 April 2024 - 3,000,000 share options at an
exercise price of 12.5p.
The Black Scholes model has been used to fair value the options, the inputs
into the model were as follows:
Grant date 18/04/2024
Share price £0.0975
Exercise price £0.1250
Term 7 years
Expected volatility 123.45%
Expected dividend yield 0%
Risk free rate 4.34%
Fair value per option £0.0258
Total fair value of the options £51,600
Warrants
During the period, the Company has not issued any warrants.
During the period ended 30 June 2024, the total number of warrants exercised
are:
1. On 23 November 2022, 1,099,768 warrants were issued to Novum Securities
Limited exercisable at 8.0p with an initial and current expiry date of 23
November 2025. On 25 June 2024, 549,833 warrants were exercised, with the
outstanding exercisable warrants being 549,885.
2. On 12 May 2023, 1,780,412 warrants were issued to Novum Securities
Limited exercisable at 5.7p with an initial and current expiry date of 12 May
2026. On 25 June 2024, 1,780,412 warrants were exercised, with no outstanding
exercisable warrants.
3. On 23 August 2022, 3,600,000 warrants were issued to Novum Securities
Limited exercisable at 5.5p with an initial and current expiry date of 23
August 2025. 1,800,000 warrants were exercised during 2022, on 25 June 2024
the remaining 1,800,000 warrants were exercised, with no outstanding
exercisable warrants.
4. On 17 March 2023, 2,181,818 warrants were issued to Novum Securities
Limited exercisable at 5.5p with an initial and current expiry date of 17
March 2026. On 25 June 2024, 1,090,908 warrants were exercised, with the
outstanding exercisable warrants being 1,090,910.
12 Investment in subsidiaries Principal activity Country of Ownership
incorporation interest
Predator Oil and Gas Ventures Limited Licence options in offshore Ireland Jersey 100%
Predator Oil and Gas Trinidad Limited Profit rights for production revenues from a CO2 enhanced oil recovery project Jersey 100%
T-Rex Resources (Trinidad) Limited ("T-Rex") Exploration licence onshore Trinidad Trinidad 100%
Predator Gas Ventures Limited Exploration licence onshore Morocco Jersey 100%
Mag Mell Energy Ireland Ltd Licence application to import liquified natural gas Jersey 100%
13 Financial instruments
The Group's financial instruments comprise cash and items arising directly
from its operations such as trade receivables and trade payables.
Categorisation of financial instruments 30.06.2024
(unaudited)
£
Financial assets measured at amortised cost
Trade and other receivables 2,135,994
Financial assets that are debt instruments measured at amortised cost:
Cash and cash equivalents 4,352,190
6,488,185
Financial liabilities measured at amortised cost:
Trade and other payables (excluding short term loans) (4,310,906)
(4,310,906)
14 Related party transactions
Transactions with key management personnel
Key management of the Group are the executive members of the Company board of
directors. Key management personnel remuneration includes the following
expenses:
30.06.2024 30.06.2023 31.12.2023
(unaudited) (unaudited) (audited)
£ £ £
Short-term employee benefits
Executive and non-executive directors 298,267 360,104 460,520
Share option scheme - 1,444,228 1,540,481
298,267 1,804,332 2,001,001
The average number of personnel (including directors) during the
period was: 2 2 2
Management - (Executive directors)
Non-management - (Non-executive directors) 2 2 2
4 4 4
Four Directors at the end of the period have share options receivable under
long term incentive schemes. The highest paid Director received an amount of
£120,084 (2023: £173,152). The Group does not have employees. All personnel
are engaged as service providers.
During the period under review, the Company incurred costs of EUR31,500 (2023:
EUR 21,000) relating to capitalised operations and logistic costs in Morocco,
of which nil (2023: Nil) remains outstanding as at 30 June 2024. These costs
are payable to Earthware Energy Inc a company owned by/related to Karima Absa,
the wife of Lonny Baumgardner.
No share options were issued during the period.
15 Subsequent Events
The Group acquired an additional 16.2% equity interest in the Cory Moruga
licence from the joint venture partner, Touchstone. Pursuant to this
acquisition T-Rex Resources (Trinidad) Limited (Trex) will assume 100% of the
debt due to Ministry of Energy and Energy Industries (MEEI). On 30 June
2024 Touchstone owed TRex TT$4,869,167 or GBP 581,054 in respect of the
licence due to MEEI for Cory Moruga. These dues to be paid from an
Overriding Royalty Interest (ORRI) in favour of MEEI which would not arise if
there were no production from a field development on the Cory Moruga
licence.
On 29 July 2024, the Listing Rules were replaced by the UK Listing Rules
("UKLR") under which the existing Standard Listing category was replaced by
the Equity Shares (transition) category under Chapter 22 of the UKLR.
Consequently, with effect from that date the Company is admitted to Equity
Shares (transition) category of the Official List under Chapter 22 of the UKLR
and to trading on the London Stock Exchange's Main Market for listed
securities"
On the 7 August 2024 the Company announced a rigless testing update and
customs clearances on the 12 June and 2 August 2024 for the import of the
Sandjet testing tools and the Baker Hughes logging and coiled tubing units
respectively.
On the 8 August 2024 the Company gave an update on preparations for the
drilling of the high impact well MOU-5. Based on an updated Independent
Technical Report, taking into account seismic modelling of the target Jurassic
reservoir interval, gave gross P50 and P90 in-place gas of 8.036 and 14.729
TCF respectively.
Based on the evidence of the presence of helium in the MOU-3 analysed gas
sample from the Moulouya Fan, the helium potential of the MOU-5 structure and
surrounding area was identified for the first time for further evaluation and
follow up through the drilling of MOU-5.
The granting of entry into the First Extension Period of the Guercif Petroleum
Agreement was confirmed.
The Company's Managing Director, Mr. Lonny Baumgardner, resigned from the
Board of Directors on 11 September 2024. His services contract was also
terminated on 11 September 2024.
Zenith Energy (Aberdeen) Limited has been appointed as an additional well
engineering services provider.
A Memorandum of Understanding with EARTHTT for access to patented chemical wax
treatment technology has been concluded.
16 Ultimate controlling party
In the opinion of the Directors there is no ultimate controlling party as no
one individual is deemed to satisfy this definition.
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