Operational Update and CO2 Supply Trinidad

RNS Number : 0274B

Predator Oil & Gas Holdings PLC

05 October 2020

 

FOR IMMEDIATE RELEASE

 5 October 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")

Operational Update and CO2 Supply Trinidad 

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

Trinidad

The Exclusivity Period under the terms of the Heads of Agreement for C02 Gas Sales entered into by Predator with Massy Gas Products ("Massy"), has been extended to 31 March 2022.

Approvals to return AT-5X to production; to commission the new CO2 EOR production facilities, provided by the Company; and to continuously inject C02 at AT13 are progressing satisfactorily and a further update will be given in due course.

In accordance with the Well Participation Agreement ("WPA") with FRAM Exploration Trinidad Ltd. ("FRAM") (and as subsequently varied by mutual agreement), the Company advises that it is not entering into a Sale and Purchase Agreement to acquire FRAM by the previously agreed deadline of 30 September 2020. Only this specific aspect of the WPA has lapsed, all other conditions of the WPA remaining in full force and effect.

After careful consideration, the Company decided that acquiring ownership of an oil field that continues to produce by conventional methods does not fit with its business strategy, which is focussed on addressing climate change concerns  through sequestrating CO2 and exploring for and developing gas. Furthermore, in line with the Company's prudent management of resources through the COVID-19 crisis, it was deemed inappropriate to enter into a corporate transaction that would involve significant transaction costs; potential delays in regulatory approvals; taking on liabilities and administrative burdens associated with an Incremental Production Service Contract; and potentially significant shareholder dilution.

Extension of exclusivity over Trinidad's entire surplus liquid CO2 supply and the successful execution of Trinidad and Tobago's first large scale CO2 EOR project for many years are compatible with the Company's strategy of developing and offering a flexible CO2 EOR services business in Trinidad to other operators. This is achievable without the onerous burden of licence liabilities.

Morocco

An independent third party technical update on the new MOU-4 Prospect has been completed.

It confirms that the MOU-4 prospect is seismic amplitude-supported and covers an area of 38 km². The MOU-4 Prospect is located 6 kilometres from the MOU-1 drill site and offers the opportunity for additional drilling whilst the rig is mobilised on the MOU-1 site. The primary gas target is prognosed to occur at 1475 metres TVD KB.

SLR Consulting Ireland Ltd will complete a Competent Persons Report for the new MOU-4 Prospect and an update on the results will be provided.

COVID-19 restrictions remain in force. The Company remains "drill ready" based on the operational planning and site visit undertaken in March this year and bids for well services that have been received.

Ireland

An independent third party preliminary Front End Engineering Design study has been authorised by the Company. This will address the onshore gas transmission network upgrades required to accommodate gas from a new entrant to the gas transmission grid at the scoping volumes of up to 300 mm cfgpd that are potentially to be delivered from the offshore Floating Storage and Regasification Unit vessel. "First Gas" is projected for Q1/Q2 2024, subject to receipt of all regulatory and government consents.

Paul Griffiths, Chief Executive of Predator, commented:

"We are pleased to be continuing to make operation progress on all fronts despite the obvious constraints that COVID-19 impose, particularly in an onshore operating environment embedded within local communities. We have prudently taken steps to ensure we focus personnel and cash resources during COVID-19 on maturing our businesses and developing credible additional opportunities for them in order to strengthen the ability to generate potential, project-backed,  M & A value. Acquiring an asset such as FRAM would have been non-sensical in this context. It would have potentially diverted valuable resources away from Morocco, which remains the greatest potential risk/reward prize in the Company's portfolio and is an absolute priority for the Company to drill as early as COVID-19 restrictions allow."

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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