REG - Predator O&G Hldgs - Phase 1 Rigless Testing Update

Predator Oil & Gas HoldingsAnnouncement

20/02/2024 07:00

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RNS Number : 6808D  Predator Oil & Gas Holdings PLC  20 February 2024

FOR IMMEDIATE RELEASE

20 February 2024

 

               Predator Oil & Gas Holdings Plc / Index: LSE
/ Epic: PRD / Sector: Oil & Gas

 
LEI 213800L7QXFURBFLDS54

Predator Oil & Gas Holdings Plc

("Predator" or the "Company" and together with its subsidiaries the "Group")

 

 
                     Phase 1 rigless testing update

 

 
Highlights

 

·    Phase 1 rigless testing with small perforating guns confirms
formation damage

 

·    Phase 2 Sandjet testing, always the preferred perforating option,
will proceed with design parameters modified to take into account the depth of
formation damage

 

·    The Company is confident that Sandjet will achieve its objective to
establish gas flow

 

·    Analysis of gas samples confirms up to 99.57% methane suitable for
CNG development

 

·    MOU-5 Jurassic well planning on track

 

·    No change to available discretionary working capital to carry out
Sandjet testing programme

 

 

 

Predator Oil & Gas Holdings Plc (LSE: PRD), the Jersey based Oil and Gas
Company with near-term operations focussed on Morocco and Trinidad, provides
an update on its Phase 1 rigless testing programme onshore Morocco.

 

Phase 1 rigless testing programme.

 

Objective

 

The Phase 1 rigless testing programme was designed to confirm potential
formation damage caused by heavy drilling muds used whilst drilling and
estimate the minimum depth of penetration of drilling mud into the potential
reservoir formations.

 

This information was critical for designing the Phase 2 Sandjet 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
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
adverse weather

conditions caused by severe gusts of wind that prevented crane work to
ameliorate.

 

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  have now been
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.

 

Phase 2 rigless testing programme

 

The results of the Phase 1 rigless testing programme allows the design
parameters for the Sandjet testing programme to be set with a higher degree of
confidence in relation to achieving key objectives as follows:

 

·    to penetrate sufficiently beyond the formation damage: and

 

·    to perforate multiple potential reservoir zones recognised by NuTech
but for which conventional wireline logs may be adversely impacted by invasion
of drilling mud.

 

Conventional larger 27/8" perforating guns are modelled by a third party to
penetrate 25 - 28" into a formation, beyond the zone of formation damage.
Sandjet design parameters will be modelled to achieve this minimum objective.

 

Forward programme

 

Phase 2 rigless well testing

 

Phase 1 rigless testing information has confirmed Sandjet as the preferred
choice for perforating multiple zones in MOU-1, MOU-3 and MOU-4 for rigless
testing.

 

The Sandjet rigless well testing programmes for MOU-1, MOU-3 and MOU-4 will be
finalised and thereafter Sandjet will be mobilised to carry out the testing
operations.

 

Mobilisation of the Sandjet crew and equipment will occur shortly after
Petroleum Agreement Amendment #4 has been ratified and all necessary
regulatory approvals for Sandjet rigless testing have been received. The time
framework for the Phase 2 rigless testing programme will at that time be
updated.

 

MOU-5 well planning activities

 

The Company will continue to progress planning activities for the drilling of
the MOU-5 well to test a large Jurassic structure updip from MOU-4. These will
include finalising the well prognosis, well design, geological programme and
drilling programme for regulatory approvals.

 

The ongoing geochemical characterisation by APT of the interpreted Jurassic
section penetrated in MOU-4 is encouraging as preliminary thermal maturity
studies indicate the section is mature for thermogenic gas generation and with
some potential for condensate too.

 

 

Paul Griffiths, Executive Chairman of Predator, commented:

"The Phase 1 rigless testing programme has confirmed our long-standing plans
to use Sandjet to better target a number of zones of interest identified by
the NuTech petrophysical interpretation. The presence of potentially deep
formation damage caused by heavy drilling mud has re-confirmed the necessity
to test these zones for which the wireline logs are likely to have been
 impacted by the invasive drilling mud.

 

We are very confident that we can design the Sandjet testing parameters to
extend beyond the zone of formation damage.

 

The analysis of gas collected from multiple levels whilst drilling MOU-3 is
encouraging as it indicates gas from a biogenic origin with up to 99.57%
methane content, which is ideally suited to a CNG development.

 

Planning activities to drill MOU-5 are progressing smoothly and we are
encouraged by the preliminary results from the geochemical characterisation of
the Jurassic section in MOU-4.

 

Resources estimates remain unchanged and there are no changes to available
discretionary working capital to carry out the Sandjet testing programme. We
are however fully aware that we need to flow gas from our main zones in the
most effective manner after accounting for formation damage, and we have
confidence in Sandjet achieving that objective."

 

 

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

 

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:blank) :

 

Enquiries:

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

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

 Lonny Baumgardner    Managing Director

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

 David Coffman / Jon Belliss

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

 Jerry                                                                                                                                                                                                                                                                                                  Jerry.keen@oak-securities.com
 Keen

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

 Daniel Fox-Davies/James Hehn

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

 Tim Thompson                                                                                                                                                                                                                                                                                            predator@flagstaffcomms.com (about:blank)

 Mark Edwards

 Fergus Mellon

 

Notes to Editors:

 

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

 

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

 

Predator owns and operates exploration and appraisal assets in licensing
options offshore Ireland, for which successor authorisations have been applied
for, adjoining Vermilion's Corrib gas field in the Slyne Basin on the Atlantic
Margin and east of the decommissioned Kinsale gas field in the Celtic Sea. The
applications for successor authorisations remain "under consideration" by the
DECC.

 

Predator has developed a Floating Storage and Regasification Project ("FSRUP")
for the import of LNG and its regassification for Ireland and is also
developing gas storage concepts to address security of gas supply and
volatility in gas prices during times of peak gas demand.

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

 

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

 

 

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