Predator Oil & Gas Raises £1.3M for MOU-1 Well Appraisal
Predator Oil & Gas has announced that it has conditionally placed 26,000,000 new ordinary shares of no par value in the Company at a placing price of 5 pence each to raise £1.3 million before expenses.
The Company is intent on rapidly building upon the safe and successful MOU-1 drilling campaign to further appraise, in consultation with its partner, the large MOU-4 Target. The Company has an existing option to use the Star Valley Rig 101 for the drilling of MOU-4 during Q4 2021. Commercial discussions will be advanced with gas off-takers in the industrial sector in Morocco to seek joint venture partnerships to secure first rights for a future potential Gas Offtake Agreement. The work programme below will address these strategic objectives.
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WORK PROGRAMME |
REASONS |
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MOU-1 Perforating & testing programme |
TGB-2 target successfully reached according to pre-drill prognosis. Higher log resistivity and dry gas readings in TGB-2 unit over a gross interval of 75 metres despite significant increase in mud weight required whilst drilling. Perforating and testing warranted to evaluate commercial flow potential. |
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MOU-1 Petrophysical log analysis after testing |
Further evaluate potential pay thicknesses and quality for input into MOU-4 Target upside prospective resources estimates. |
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MOU-1 to MOU-4 Target Seismic modelling |
MOU-1 validated the pre-drill seismic “bright spot” anomaly. MOU-1 will help calibrate MOU-4 Target seismic “bright spots” to adjust a final well location to appraise the MOU-1 drilling results. Preliminary seismic re-correlation of the TGB-2 objective to the MOU-4 Target confirms that MOU-1 successfully proved up and substantially de-risked the MOU-4 Target. |
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MOU-4 Target Updated CPR incorporating MOU-1 results |
MOU-1 preliminary results have enhanced the P10 Case for MOU-4 Target prospective gas resources by identifying a potential structural/stratigraphic closure of up to 60 kms². Updated CPR to reflect new positive information on potential area of trap. |
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Compressed Natural Gas Study (“CNG”) Update |
Presence of dry gas in MOU-1 reduces development costs for CNG. Facilitates commercial discussions with off-takers of gas in Morocco in relation to first right of refusal for potential future Gas Offtake Agreement.
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MOU-4 Target Environmental Impact Assessment (“EIA”) |
MOU-1 has confirmed the basis for a proposed step-out well for the MOU-4 Target – the location for which is not covered by the current EIA. |
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MOU-4 Target Well inventory purchase |
Import long-lead consumables (cement and mud chemicals, casing and well heads) in advance of drilling MOU-4 (targeted Q4 2021) to replenish MOU-1 well inventories. Due to COVID manufacturing capacity has been curtailed. |
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General working capital |
Advance commercial discussions with Moroccan gas off-takers in the downstream industrial sector – off-take via a CNG development concept with potential joint venture partnerships.
Evaluate opportunity to complete an existing well for gas production in another basin in Morocco.
Progress AIM admission to increase the opportunity to further develop the downstream LNG and CO2 sequestrations sectors of the Company’s portfolio. These represent growth opportunities during the Energy Transition with the potential to divest at the right time to larger peer companies specialising in these specific sectors. |
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Current working capital |
Current working capital is sufficient for existing commitments and corporate overheads through 2021. These include closing out of drilling costs for MOU-1; LNG desk-top studies and public consultation requirements; and ongoing CO2 injection in Trinidad with reactivation of wells for production based on currently observed rising reservoir pressures. Timing of well workovers has been influenced by a difficult operating environment in Trinidad caused by the resurgence of COVID. |
Paul Griffiths, CEO of Predator Oil & Gas Holdings Plc commented:
“MOU-1 was safely and successfully drilled within the Company’s pre-drill budget estimates and completed for proposed rigless testing after presentation of results to our partner. Our immediate priority is to incorporate the positive results of the MOU-1 well into the evaluation of the MOU-4 Target to optimise the location for a step-out well. The recent appointment of Lonny Baumgardner as Chief Operating Officer following the completion of MOU-1 includes the portfolio to develop the Company’s ties with the Moroccan downstream gas sector for which he is uniquely placed. Significant potential exists for joint venture partnerships with gas-offtakers as the requirement for gas in Morocco becomes an increasing priority . MOU-1 delivered a result that allowed us to de-risk the MOU-4 Target whilst unexpectedly validating the pre-drill seismic “bright spot”, related to the presence of gas, as being attributable to the western limit of the MOU-4 Target and not an isolated target as previously interpreted above what was thought to be the pre-drill MOU-4 Target equivalent section.”