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

 

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: 

 

Enquiries:

Predator Oil & Gas Holdings Plc Paul Griffiths                Chief Executive Officer	Tel: +44 (0) 1534 834 600 [email protected]
Novum Securities Limited David Coffman / Jon Belliss   Oak Securities Jerry Keen	Tel: +44 (0)207 399 9425     Tel: +44 (0)203 973 3678 [email protected]
Camarco - Financial PR Billy Clegg / Owen Roberts / Fergus Young	Tel: +44 (0)20 3757 4980 P[email protected]

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  

 

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 parent		(978,238)		(2,361,721)
Loss per share basic and diluted (pence)	4	(0.242)		(0.592)