End of Year Operational Update

RNS Number : 6800H

Predator Oil & Gas Holdings PLC

07 December 2020

 

FOR IMMEDIATE RELEASE

 7 December 2020

  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")

  End of Year Operational Update

Predator Oil & Gas Holdings Plc (Predator), the Jersey-based Oil and Gas Company with operations in Trinidad, Morocco and Ireland, announces an operational update.

Onshore Trinidad Pilot CO2 EOR

· Planned CO2 injection in the Inniss-Trinity field into AT-5X commenced on 18 May 2020 for a period of 30 days, with a total of 380 metric tonnes of CO2 successfully injected during the period

· 30 days following cessation of the initial CO2 injection, oil production increased sharply in a CO2 EOR monitoring well. Production was sustained at an average rate 88% higher than the average rate for the CO2 EOR monitoring well in the month prior to the start of CO2 injection

· At the end of the monitoring period in November, planned CO2 injection re-commenced at AT-13. This time an immediate response in the CO2 EOR monitoring well was observed with an increase in production of 60% relative to the average pre-injection production rate in the five days preceding injection

· Enhanced incremental oil production for the single CO2 EOR monitoring well is estimated to be approximately 2,200 barrels of oil since the commencement of CO2 injection

· CO2 sensors have detected no increased CO2 emissions at surface at AT-5X and AT-13 above the pre-injection background base line, demonstrating the effectiveness of subsurface sequestration of CO2

Forward programme Q1 2021

· Continue CO2 injection at AT-13 and observe impact on monitoring well

· Evaluate potential to progressively add CO2 EOR production wells based on AT-13 CO2 EOR injection performance

· Make operational efficiencies and optimise CO2 injection volumes to further reduce operational costs

· Continue discussions with potential joint venture partners to focus on capitalising on the value of the success of the Pilot CO2 EOR project in de-risking CO2 EOR operations and CO2 sequestration

· Continue discussions with the Ministry of Energy and Energy Industries regarding developing green fiscal incentives for anthropogenic CO2 sequestration operations as an interim measure  until such time as a carbon credit trading platform is established

Onshore Morocco - Guercif Drilling Programme

· Star Valley Rig 101 remains securely stacked in Morocco awaiting lifting of COVID-19 restrictions

· Well inventory and equipment remain available and accessible in-country

· MOU-1 drilling location and 2021 budget approved by partner ONHYM

· Environmental Impact Assessment completed and approved for three wells

· Seeking to coordinate drilling programme with SDX Energy's proposed H1 2021 Rharb Basin drilling programme to create mutually attractive logistical efficiencies

· Completed independent mapping of the new 31.7km² MOU--4 Prospect, 6 kilometres to the NE of the first; MOU-1; drilling location

· SLR Consulting (Ireland) Ltd ("SLR") has performed an updated independent  assessment of the new MOU-4 Prospect with the following conclusions:

-  Upgrade of gross audited Best Estimate recoverable prospective resources for Miocene gas targets to 819 BCF with addition of the MOU-4 Prospect, representing an increase of 92% over previous SLR resources estimates

-  Seismic amplitude-supported MOU-4 drilling target equivalent to the  entire producing gas reservoirs in the Rharb Basin

-  Commercially viable due to low cost of onshore drilling and development; the proximity to existing energy infrastructure; and the short lead time to a potential declaration of commerciality post-drilling

-  Rig available for appraisal and development drilling to seamlessly extend current  drilling programme

-  Multiple potential options to monetise including: satisfying Morocco's entire current gas requirement for gas-fired power generation; compressed natural gas transport by road or rail to Morocco's major industrial centres; and for on-site electricity generation to support, during periods of interrupted supply, the new 87 MW wind farm being constructed by EDF RE and Mitsui & C. in the adjacent Taza area (operational 2022)

The following table summarises the range of total gross and net audited Guercif prospective resources:

Table 1  Prospective Resources Guercif Permit

			Gross			Net Attributable
Gas Prospective Resources BCF	GIIP	Recovery Factor	Low Estimate	Best Estimate	High Estimate	Low Estimate	Best Estimate	High Estimate	Operator
Guercif Tertiary Guercif MOU-4 Prospect	646 595	66% 66%	148 146	426 393	879 944	111 110	320 295	659 708	Predator Predator
Guercif Triassic	515	40%	77	206	378	58	155	283	Predator
Total	1,756		371	1,025	2,201	279	770	1,650

Forward programme

· Finalise MOU-1 drilling programme and well services during Q1 2021

· Seek to optimise drilling programme synergies with SDX Energy Plc based on MOU-1 being the first well to be drilled

· Continue with exploratory discussions with a European entity regarding a joint venture partnership to finance an early development of Guercif gas for the compressed natural gas market

Offshore Ireland - Floating Storage and Regasification Unit  ("FSRU") and LNG

· Independent engineering study commissioned to evaluate the scope of infrastructure improvements required to accept new gas at higher pressures into the onshore gas transmission grid

· Modelling solutions for ship-to-ship LNG transfer and hook-up to an offshore pipeline

· NDA's executed with a significant global LNG player and a leading European finance broker for infrastructure deals

· Work commenced on gathering material to support regulatory approvals

· Ireland announces security of energy supply review including a review of the single source of natural gas imports   ( i.e. Moffat  in Scotland )  and the associated risks of a supply shortage at that location

Forward programme for Q1 2021

· Complete application for FSRU inclusion in Strategic Infrastructure Development

· Continue with application for Third Party Exemption for FSRU (EU requirement)

· Start Safety Case Gas Safety Framework for LNG operations and Offshore Safety Case Petroleum Safety Framework

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

"We entered 2020 with a number of operations at an early stage of planning and execution. We exit 2020 on the back of: a successfully executed Pilot CO2 EOR Project with confirmed CO2 sequestration in Trinidad and enhanced oil production; a 92% increase in gross prospective gas resources at Guercif with a clear pathway to drilling and for potential early monetisation; and an FSRU LNG project  that is gaining us access to global players in the downstream energy business. Operational progress has been achieved despite the huge challenges posed by COVID-19. The key takeaway from the prospective resources upgrade at Guercif is that it underpins and increases the diversity of the options to monetise the gas both in-country and, in the upside case, for export. We have a "head-start" in discussions with potential gas purchasers given the progress that our FSRU LNG project has made. Management has demonstrated the ability to build downstream areas of collaboration and to engineer and successfully execute a complex onshore CO2 injection project in Trinidad. Sequestrating CO2 in Trinidad is consistent with our goal of contributing to reducing CO2 emissions, now a vitally important investment ingredient for third party financing of infrastructure projects in our part of the energy sector. In this respect this makes us a "pathfinder" operator in Morocco, already executing a CO2 sequestration strategy in our wider project portfolio. With this material upgrade in prospective Guercif gas resources, we have taken all pre-drill steps necessary to ensure that we can attract finance to fast-track  gas appraisal and development at Guercif following a successful short-term outcome to the MOU-1 drilling programme."

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 Dr. Stephen Staley Non-executive Chairman Paul Griffiths  Chief Executive Officer	Tel: [phone] [e-mail]
Novum Securities Limited Jon Belliss Optiva Securities Limited Christian Dennis	Tel: [phone] Tel: [phone]
Flagstaff Strategic and Investor Communications Tim Thompson  Mark Edwards Fergus Mellon	Tel: [phone] [e-mail]

Notes to Editors:

Predator is an oil and gas exploration company with the objective of participating with FRAM Exploration Trinidad Ltd. in further developing the remaining oil reserves in the producing Inniss Trinity oil field onshore Trinidad, primarily through the application of C02 EOR technology. Potential for cash flow exists by executing a Pilot Enhanced Oil Recovery project using locally sourced liquid carbon dioxide for injection into the oil reservoirs ("C02 EOR"). Near-term expansion and growth potential is focussed on upscaling the C02 EOR operations in the Inniss-Trinity oil field and potential acquisitions of assets suitable for C02 EOR development, subject to all necessary approvals. 

In addition, Predator also owns and operates exploration and appraisal assets in current licensing options offshore Ireland, for which Successor Authorisations have been applied for, adjoining Shell's Corrib gas field in the Slyne Basin on the Atlantic Margin and east of the Kinsale gas field and Barryroe oil field in the Celtic Sea.

Predator is operator of the Guercif Petroleum Agreement onshore Morocco which is initially prospective for Tertiary gas in prospects less than 10 kilometres from the Maghreb gas pipeline.

The Company has a highly experienced management team with a proven track record in the oil and gas industry.

 

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