TIDMPRD
RNS Number : 5602S
Predator Oil & Gas Holdings PLC
07 November 2023
FOR IMMEDIATE RELEASE
7 November 2023
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")
Completion of the acquisition of T-Rex Resources (Trinidad)
Limited and Cory Moruga
Highlights
-- Acquisition of Cory Moruga exploration and production licence interest completed
-- Opportunity to first re-establish Snowcap-1 production rate of 100 to 200 bopd
-- 3 years to drill appraisal well ahead of proposed amended Field Development Plan
-- Potential 5,000 to 9,000 bopd if future amended Field Development Plan adopted
Predator Oil & Gas Holdings Plc (LSE: PRD), the Jersey based
Oil and Gas Company with near-term gas operations focussed on
Morocco, is pleased to advise that further to announcements of 20
December 2022, 8 March 2023, 1 June 2023 and 30 August 2023 the
transaction for the acquisition from Challenger Energy Group Plc
("CEG") of T-Rex Resources (Trinidad) Limited ("TRex") and an 83.8%
the Cory Moruga licence ("Cory Moruga"), onshore Trinidad, has
today, 7 November 2023 (the "Completion Date"), completed.
Completion of the transaction follows receipt of agreements from
the Trinidadian Ministry of Energy and Energy Industries
("MEEI").
As a consequence of negotiations associated with securing those
agreements, PRD and CEG agreed to vary certain of the terms of the
previously announced agreement between them, as follows:
-- On completion, PRD has paid to CEG US$1 million;
-- A further US$1 million, due to be paid by PRD to CEG 6 months
after the Completion Date, will instead be paid immediately by PRD
direct to the MEEI, in part agreed settlement of past dues on the
Cory Moruga licence; and
-- A contingent US$1 million payable by PRD to CEG in the event
of the Cory Moruga field achieving certain future production
benchmarks, and PRD granting to CEG a future back-in right to a 25%
interest in the Cory Moruga field at an uplifted multiple of cost
base, will no longer apply, reflective of CEG's contribution to the
value of settlement of the balance of past dues on the Cory Moruga
licence, which by agreement will be recovered by MEEI via agreed
quarterly arrears payments, which are deductible against Petroleum
Profit Tax and supplemental petroleum tax.
In parallel with completion, all historical differences, and
disputes between PRD and CEG in relation to the Inniss-Trinity
pilot CO2 EOR Project have been completely and amicably resolved
pursuant to the terms of the previously announced Settlement
Agreement between PRD and CEG.
Initial Work programme
The Initial Work Programme agreed by PRD with the MEEI will be
conducted over the next three years effective from the Completion
Date and will include:
-- Re-entering Snowcap-1 to bring the Herrera #8 Sand back onto production;
-- Reprocessing, subject to the availability of seismic field
tapes, the existing 3D seismic on Cory Moruga; and
-- Drilling an appraisal/exploration well to test all eight
Herrera reservoir intervals (Herrera #1 to #8 Sands) that produced
in the adjoining ex-BP and Shell Moruga West field and several of
which had tested oil in Rochard-1 drilled in 1955.
Snowcap-1 and Snowcap-2ST1
Snowcap-1 initially flowed at a stabilised rate of 406 bopd with
no water. The Snowcap-1 test waxed off downhole during the test
with the test tool recovered covered in wax.
The well produced 3,277 barrels of oil with a final shut-in
reservoir pressure of 2076 psi.
A re-entry and work-over with a wax treatment is planned and
designed to restore production to a predicted rate of 100 to 200
bopd based on a successful wax treatment programme and
re-completion of the well.
Snowcap-2ST-1 also encountered oil-bearing Herrera Sands but no
resistivity log was run and no testing operations were performed at
the time due to operational issues.
PRD plan to survey this well for possible re-entry and if
achievable will run a resistivity wireline log to select intervals
for re-completion and testing, which if successful will allow this
well also to come onto production.
Planning for the workovers will start immediately with
production recommencing in early 2024 if all operations are
successfully executed.
Field Development Plan ("FDP")
PRD has outlined an amended FDP to the MEEI which includes up to
20 development wells to be drilled over 3 years from completion of
the Initial Work Programme.
A long-term production potential for the fully developed Cory
Moruga field of 5,000 to 9,000 bopd (100% equity - PRD net 83.8%)
was presented to the MEEI.
PRD also presented to the MEEI a possible longer-term miscible
CO2 EOR scheme which could be implemented at the appropriate time
in the FDP after a period of primary oil recovery.
PRD at its discretion can advance the timing of implementation
and execution of any or all of the elements of its proposed amended
FDP if warranted and subject to MEEI consent and regulatory
approvals.
Collaboration with MEEI and Historical Outstanding Financial
Obligations ("HOFO").
MEEI and PRD have jointly agreed to work collaboratively
together with a shared common goal of developing and realising new
oil production from Cory Moruga.
Under the Letter Agreement in Relation to Various Outstanding
Matters Regarding the Moruga Block Exploration and Production
Licence dated 27 August, 2007 (the "Agreement") the MEEI calculate
the HOFO incurred by previous operators to be US$4,192,690.
It has been agreed with the MEEI that this will be satisfied by
a payment of US$ 1 million to the MEEI by PRD on the Completion
Date together with a quarterly arrears payment of 7.5% of gross
revenue derived from the sale of all production on Cory Moruga up
to 250 bopd and 12.5% of gross revenue derived from the sale of all
production on Cory Moruga above 250 bopd until the balance
outstanding of US$3,192,690 of the HOFO is recovered by the
MEEI.
Through these negotiations with the MEEI there is now commercial
alignment and a common objective of accelerating the production
from Cory Moruga at the earliest opportunity.
For the avoidance of doubt there is an element of risk-sharing
in that if production is not achieved then the HOFO liability falls
away.
Joint Operating Agreement ("JOA") and Operating Committee
Meeting ("OCM")
T-Rex remains the operator of Cory Moruga approved by the
MEEI.
T-Rex will convene under the existing JOA an OCM with its
partner, who hold a 16.2% interest in Cory Moruga, before the end
of 2023.
T-Rex will present its budget and work programme for 2024 and a
request to its partner under the terms of the JOA and the Cory
Moruga licence commitments for payment in full of its share (16.2%)
of the gross amount of the HOFO of US$4,192,690.
Independent Technical Report
Following the Completion of the acquisition of Cory Moruga and
the crystallisation of commercial terms together with the receipt
of additional technical data PRD can now finalise its Independent
Technical Report ("ITR") for Cory Moruga including volumetrics and
forecast projected production profiles.
A summary of the ITR will be published before the end of
2023.
Paul Griffiths, Executive Chairman of Predator, commented:
"We are delighted to have successfully closed out this
transaction. Once PRD participated for the first time directly in
face-to-face meetings with the MEEI in Trinidad during the week of
24(th) September this year and made our proposals to the MEEI the
historical matters that had been outstanding for a very long period
of time were successfully resolved within one month. We sincerely
appreciate the efforts and resolve of the MEEI in concluding
negotiations quickly. We look forward to working collaboratively
with the MEEI towards the common goal of realising the oil
production potential at Cory Moruga.
Cory Moruga will provide newsflow over the next 12 months but
most significantly creates the opportunity for cash flow in 2024 to
protect against difficult market conditions and negative investor
sentiment caused by uncertainty generated by regional conflicts and
poorer global economic performance.
For the avoidance of doubt, executing the rigless testing
programme onshore Morocco remains our top priority together with
moving to a CNG development subject to regulatory approvals.
Everything is in place and all approvals have been received to
commence testing. One final element in relation to our business
development strategy for Morocco is the execution of a potential
Memorandum of Understanding for gas sales. Our preference is for
commercial reasons to have this in place before testing commences
and we are working to finalise this as soon as possible."
For further information visit www.predatoroilandgas.com
Follow the Company on twitter @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 Tel: +44 (0) 1534 834 600
Paul Griffiths Executive Chairman Info@predatoroilandgas.com
Lonny Baumgardner Managing Director
Novum Securities Limited Tel: +44 (0)207 399 9425
David Coffman / Jon Belliss
Fox-Davies Capital Tel +44 (0)203 884 7447
Jerry Keen jerry@fox-davies.com
Flagstaff Strategic and Investor Communications Tel: +44 (0)207 129 1474
Tim Thompson predator@flagstaffcomms.com
Mark Edwards
Fergus Mellon
Notes to Editors:
Predator is operator of the Guercif Petroleum Agreement onshore
Morocco which is prospective for Tertiary gas less than 10
kilometres from the Maghreb gas pipeline. The MOU-1 well drilled in
2021 and the MOU-3 well drilled in 2023 have been completed for
rigless testing in 2023. Focus is on supplying compressed natural
gas to the Moroccan industrial market. Further drilling activity is
being progressed to evaluate Jurassic prospects.
Predator is seeking to apply CO2 EOR techniques onshore Trinidad
which have the advantage of sequestrating anthropogenic carbon
dioxide. Acquisition opportunities are also being progressed which
are compatible with this strategy.
Predator 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
decommissioned Kinsale gas field in the Celtic Sea.
Predator has developed a Floating Storage and Regasification
Project ("FSRUP") for the import of LNG and its regassification for
Ireland and is also developing gas storage concepts to address
security of gas supply and volatility in gas prices during times of
peak gas demand.
The Company has a highly experienced management team with a
proven track record in successfully executing operations in the oil
and gas sector.
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END
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