Investor Presentation and Operational Update

RNS Number : 1346N

Predator Oil & Gas Holdings PLC

28 September 2021

 

FOR IMMEDIATE RELEASE

28 September 2021

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")

Investor Presentation and Operations Update

 Highlights

· Prioritise gas as sustainable fuel in the Energy Transition  

· 6 zones selected for rigless testing in MOU-1  

· Proposed three-well drilling programme for Q1 2022  

· Compressed Natural Gas Development targeted for "First Gas" H1 2023  

· Project-based funding being explored  

· Merger of Irish subsidiaries considered to create gas infrastructure-led materiality  

· CO2 EOR delivers positive results  to drive further business development

Predator Oil & Gas Holdings Plc (PRD), the Jersey-based Oil and Gas Company with operations in Morocco, Trinidad and Ireland focussed on gas as a sustainable lower carbon fuel for the Energy Transition, is pleased to announce that   CEO Paul Griffiths will lead a live presentation to update investors on the current business outlook via the Investor Meet Company platform on Tuesday 28th September at 16:00 UK local time.

The Investor Presentation is available on the Company's website at:

https://www .predatoroilandgas.com

Morocco

The MOU-1 well was successfully drilled, logged and completed within budget at a cost of US$3.3 million. Drilling time to the primary target, a seismic amplitude anomaly, was 12 days.

MOU-1 confirmed the pre-drill prognosis by validating a seismic amplitude anomaly covering an area of at least 4km².

Post well evaluation, based on an analogous offset well from the Rharb Basin, has confirmed that 6 zones within the primary target should be evaluated by a rigless well test.

A further study is being commissioned to optimise the size of perforating guns required, taking into consideration borehole conditions and the increase in mud weight that was required to drill through a significantly over-pressured section.

The operations team, with significant Rharb Basin drilling experience, reported that the MOU-1 well encountered a very similar geological section to that of the Rharb Basin, with evidence of gas over several hundreds of metres of gross section penetrated by the well.

Rigless testing will assess whether or not MOU-1 has the capability to flow gas at a sustained rate of at least 5 mm cfgpd. At this rate an initial Compressed Natural Gas ("CNG") development becomes profitable for gas sales to industry at a price of US$11/mcf, which ignores any increase in gas prices that may result from the current European Energy Crisis.

Drilling plans are being prepared to drill, using an in-country rig, three follow-up wells as early as possible in Q1 2022, allowing a minimum of three months for the import of additional long-lead well items and for potential COVID-related supply chain delays. 

Following the encouraging results from MOU-1, MOU-4 and MOU-5 are proposed to test the core area of the "MOU-4 Tertiary Fan", covering an area of at least 30km². The extreme western limit of this feature was penetrated by MOU-1. An additional Environmental Impact Assessment ("EIA") has been commissioned for these proposed well locations.

A successfully tested MOU-4 well would allow potential upscaling of future CNG production to 25 mm cfgpd, whilst similar success at the MOU-5 location could increase CNG production to up to 100 mm cfgpd, although at this rate transport of CNG by rail might become an option.

A further prospect for drilling has been identified as "MOU-NE". Its location is being included in the new EIA. This is a basal Jurassic target at approximately 1,200 metres drilling depth and within the drilling capability of the currently available in-country rig. The prospective region covers an area of potentially up to 105km² and the proposed well will test part of a large carbonate bank. Offset well TAF-1X to the east has reservoir development within this target interval and gas shows in the lower part of the Jurassic. Success for MOU-NE, depending on the scale of a potential gas discovery, could open up a welcomed gas export market to Europe through the Maghreb Gas Pipeline (passing this year into 100% Moroccan ownership).

Depending on well results, up to four wells would potentially be available for rigless testing to provide economies of scale (firm being MOU-1 and contingent being MOU-4, MOU-5 and/or MOU-NE).

Successful testing of MOU-1 and the potential for further success in the step-out drilling programme would accelerate the first stage of a CNG development. The proposed MOU-4 well location has direct access to the main highway 1.5 kms away. This provides a link to the larger industrial centres in Casablanca for example.

A CNG development is compatible with addressing Morocco's geographically diverse distribution of potential gas customers, currently stranded by a lack of a fully evolved gas distribution network. CNG developments do not involve long delays in pipeline permitting and construction nor do they require large capital investment. Given the potential near-term scalability offered by the interpretation of the MOU-1 well results, a CNG development can supply the industrial market with the gas it requires for investment decisions to be made by a realistically achievable "First Gas" date of H1 2023.

A clear and transparent path to "First Gas", modest levels of capital investment, a gas shortage and an as yet undiluted licence interest over a prospective area of 7,269km², is the catalyst for potential pre-development investment at project level by those seeking to access gas supplies in an increasingly uncertain and volatile market.

Trinidad

The Company was recently invited by the Government of Trinidad and Tobago's Steering Committee on CO2 EOR (the "Committee"), chaired by the Permanent Secretary at the Ministry of Energy and Energy Industries, to provide an update on the Inniss-Trinity CO2 EOR operations.

Approval for the Company to present to the Committee an update on its CO2 EOR operations at the Inniss-Trinity field was given by the CEO of Heritage Petroleum, a Committee member.

The Company duly reported to the Committee that:

· 469 metric tonnes of CO2 were sequestrated for the 4 months from April to July this year following the recommencement of CO2 injection at AT-5X;

This was despite COVID and HSE restrictions that prevented night-time operations.

· the  AT-12 well was continuing to produce at oil rates higher than the rates achieved in the months prior to the start of CO2 injection in May 2020;

· the observed reservoir pressure build-up in a number of wells in the AT-4 Block had increased faster than predicted prior to CO2 injection in April,

· a maximum reservoir pressure of 1,089 psi had been reached in one well on 9 June 2021, over 4 months ahead of the pre-injection prediction;

· preparations had been made to restore several wells to production through workover based on the encouraging signs of reservoir pressure build-up that the Company had observed.

The Committee was set up on 19 February 2021 to address Trinidad and Tobago's Nationally Determined Contribution Commitment under the Paris Agreement. CO2 EOR was recognised as an important contributor to carbon capture and sequestration.

The Company designed, developed and successfully executed Trinidad's first CO2 EOR project in the last 25 years and has engaged with the Ministry of Energy and Energy Industries over 5 years to help develop the case for CO2 EOR in Trinidad's mature producing fields.

Regretfully the Committee was made aware of the fact that the operator, FRAM Exploration Trinidad Ltd ("FRAM") of the Inniss-Trinity Incremental Production Services Contract ("IPSC") had unilaterally ordered Predator Oil  & Gas Trinidad Ltd. ("POGT"), without prior notice, to suspend immediately its CO2 EOR operations and remove all equipment "within 24 hours", even though the succeeding day was a bank holiday in Trinidad. The Committee was unaware of this request.

Personnel  from POGT and Massy Gas Products Trinidad Ltd. (part of one of Trinidad's largest industrial conglomerates), qualified in handling CO2 gas, were initially denied access to the Inniss-Trinity field. The unforeseen shut-down of CO2 EOR operations had the potential to create HSE and environmental compliance issues if not properly managed and FRAM was made aware of this fact by POGT.

POGT will not remove the CO2 EOR equipment and facilities from the Inniss-Trinity field until official approval has been seen from Heritage Petroleum, the Environmental Monitoring Authority and the Ministry of Energy and Energy Industries, all of whom were involved in approving the commissioning of the CO2 EOR facilities, to remove the equipment which will be safely and securely stored and available for inspection.

POGT continues to closely monitor the situation.

The Well Participation Agreement ("WPA") with FRAM Exploration Trinidad Ltd. remains in place and all benefits that have accrued to POGT under the WPA and the Loan advanced to FRAM still apply.

POGT has informed Heritage Petroleum in writing that it wishes to be considered for the Inniss-Trinity IPSC were the IPSC to be become available in 2022

CO2 EOR Business Development .

POGT has appointed Myodeen Ali as its country manager for Trinidad with the task of expanding the  CO2 EOR business with selected indigenous companies that wish to partner with POGT in the roll out of commercial CO2 EOR operations. Technical studies have begun on one such opportunity and other potential projects are being screened.

Mr. Ali has  32 years of experience in the oil industry, particularly in production operations focussed on successfully maximising production from Trinidad's mature producing reservoirs using local knowledge and sound industry practices. POGT has trained Mr. Ali over the past 2 years in the handling of CO2 operations from subsurface completions for CO2 injection to understanding surface facilities and the operation thereof.

POGT retains exclusivity over Trinidad's surplus liquid CO2 supply into 2023.

Ireland

The Mag Mell offshore LNG project continues to make progress with a public consultation submission to the Cork County Council Development Plan having been made in July this year.

The National Marine Plan Framework and the Maritime Area Planning Bill was published on 1 July 2021.

Mag Mell Energy Ireland Ltd is now starting the Major Accident - Health and Safety pre-application consultations under the Strategic Infrastructure guidelines.

The Company is seeking to merge Mag Mell Energy Ireland Ltd and Predator Oil and Gas Ventures Ltd, who still have outstanding applications for successor authorisations for the Corrib South gas exploration and Ram Head gas appraisal and potential gas storage projects. Synergies would create an integrated upstream and downstream company that would be well-positioned to seek much larger financial partners focussed on gas, where a change in immediate priorities is being contemplated as a result of Europe's current gas crisis. Subject to attracting the right partners, a possible acquisition of an interest in the producing Corrib gas field is being reviewed. The diverse range of assets in the Company's Irish portfolio, together with the Company's progress on its Mag Mell offshore LNG project and its management's long experience offshore Ireland, would potentially make it an ideal junior partner for larger multi-nationals wishing to evaluate the opportunity to develop an upstream and downstream gas position in Ireland as Ireland potentially re-evaluates the role of gas as a sustainable fuel through the Energy Transition.

Online Investor Presentation

The online presentation is open to all existing and potential shareholders.

Questions can be submitted at any time during the live presentation via the "Ask a Question" function. Although the Company may not be able to answer every question it receives, it will address the most prominent within the confines of information already disclosed to the market. Responses to the Q&A from the live presentation will be published at the earliest opportunity on the Investor Meet Company platform.

Investor feedback can also be submitted directly to management post-event to ensure the Company can understand the views of all elements of its shareholder base.

Investors can sign up to Investor Meet Company for free and add to meet Predator Oil & Gas Holdings Plc :

https://www.investormeetcompany.com/predator-oil-gas-holdings-plc/register-investor

Investors who have already registered and added to meet the Company will be automatically invited.

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

"The online Investor Presentation is an opportunity for shareholders and potential shareholders to catch up with the business development strategy of the Company during what has been a very busy period following the successful drilling of MOU-1 onshore Morocco. The "Energy Crisis" and resurgence of gas as a sustainable fuel during the Energy Transition for many years to come has impacted immediate priorities for everyone. Gas assets are now more valuable and the potential to find partners at the project level is greater than it has been for a long time since before the onset of COVID. The fossil fuel industry has contracted and opportunities are now less prevalent.  Our decision to maintain high equity levels in our projects has been validated. Moving to AIM is opportune and gives us greater substance and a market that larger companies are more familiar with."

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 Lonny Baumgardner  Chief Operating 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 operator of the Guercif Petroleum Agreement onshore Morocco which is prospective for Tertiary gas in prospects less than 10 kilometres from the Maghreb gas pipeline.  The MOU-1 well has been completed and a follow-up drilling programme is under review.

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

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

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

 

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