Predator Oil & Gas Holdings Plc (LSE: PRD), the Jersey based Oil and Gas Company with near-term hydrocarbon operations focussed on Morocco and Trinidad, is pleased to announce its audited financial statements for the year ended 31 December 2023, extracts of which are set out below.
The Company’s Annual Report is available to shareholders to download from the Company’s website at www.predatoroilandgas.com. In line with ESG best practice no hard copies of the Annual Report will be printed.
In addition, a copy of the 2023 Annual Report will be uploaded to the National Storage Mechanism and will be available for viewing at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
The financial information set out below does not constitute the Company’s statutory accounts for the year ending 31 December 2023.
Highlights of Financial Results for 2023
· Loss from operations of GBP 4,815,984 (GBP 2,558,844 for the period to 31 December 2022).
The increase in operating loss is primarily due to increased drilling activity in Morocco (MOU-2, MOU-3 and MOU-4 wells)
· Administrative expenses of GBP 3,224,721 (GBP 2,545,789 for the period to 31 December 2022).
Excluding share based payments for options and warrants corporate administrative expenses were GBP 1,540,481 (GBP 1,248,084 for the period to 31 December 2022).
Corporate administrative expenses have been prudently managed despite inflationary pressures during 2023 despite the significant increase in corporate activities which included Project Allosaurus costs of GBP 217,241 related to progressing a Secondary Prospectus with the FCA.
· Executive directors’ fees have increased to GBP 604,506 (GBP414,709 for the period to 31 December 2022) as a result of the significant increase in the Company’s corporate and operational activities in the period to 31 December 2023 to maintain business growth potential. This increase is mainly attributable to technical services consulting fees charged by the executive directors in providing technical support and reports that would otherwise would have been out-sourced to third parties at competitive market rates.
· Increased cash balance at period end of 2023 GBP 6,484,034 (GBP 3,323,161 for the period to 31 December 2022).
· Additional, restricted cash of USD1,500,000 (USD 1,500,000 for the period ended 31 December 2022).
· The Company has no debt.
Directors’ loans of £507,999 were capitalised and linked to a repayment in full upon the Company flowing a minimum of 1 million cubic feet/day from the rigless testing programme to be executed in the Guercif Licence or from the flow of a minimum of 100 bopd from the well workovers planned for the Cory Moruga Exploration and Production Licence.
· Balance outstanding of the loan made by the Company to FRAM Exploration Trinidad Ltd. (“FRAM”) for the investment in the Inniss-Trinity Pilot CO2 EOR Project was GBP NIL (GBP 659,504 the period to 31 December 2022) at the end of the period.
In 2023 the Company announced that it had completed the acquisition (the “Acquisition”) of the entire issued share capital of T-Rex, a wholly owned subsidiary of Challenger Energy Group Plc (“CEG”). FRAM is also a wholly owned subsidiary of CEG. T-Rex holds an 83.8% in the Cory Moruga Exploration and Production Licence containing the Snowcap-1 oil discovery. The Acquisition was for a gross consideration (“Gross Consideration”) that included USD1,000,000 payable to CEG in cash and allowed for the offset of the outstanding FRAM Loan balance against the agreed Gross Consideration. The Cory Moruga Independent Technical Report and resource potential of the Snowcap-1 discovery by Scorpion Geoscience Limited gives 2C and 3C Contingent Resources of 1.40 and 1.84 million barrels respectively and 2C and 3C Prospective Resources of 12.91 and 19.57 million barrels respectively net to the Company. The Company through the Acquisition has acquired TT $323,652,447 (US $ 47,948,510 @ a forex rate of 6.75) of T-Rex tax losses as of 2022 that can be offset against 50% Petroleum Profit Tax on future net operating profits from oil production in the Cory Moruga Exploration and Production License.
· Placed 97,231,500 new ordinary shares of no par value in the Company to raise GBP10,360,377 (before expenses).
· Exercise of broker warrants resulted in the issue of 2,035,714 new ordinary shares of no par value in the Company to raise GBP 79,500.
· Exercise of share options by directors and former directors resulted in the issue of 20,112,049 new ordinary shares of no par value in the Company to raise GBP 1,646,986.
· 6,401,077, 15,710,972 and 6,000,000 share options have been issued exercisable at £0.10, £0.08 and £0.125 respectively.
· 8,318,182, 1,080,000, 2,181,818 and 1.780,412 broker warrants have been issued exercisable at £0.11, £0.055 and £0.057 respectively.
· 2,659,574 new ordinary shares were issued to the executive directors for no Consideration in accordance with the Executive Directors’ Bonus arrangements established by the independent Remuneration Committee.
· Following the admission of the above exercised share options and warrants, bonus shares, returned Loan Shares and the Placing Shares the issued share capital increased to 565,161,662 by the end of the period to 31 December 2023 (383,759,189 for the period ended 31 December 2022).
Highlights of key Operational Activities in 2023
· MOU-2 was drilled to 1,260 metres Measured Depth before being suspended for operational reasons for a possible later re-entry.
Three gas samples collected whilst drilling.
100 metres of variable quality sand in primary target.
· MOU-3 was drilled to 1,509 metres Measured Depth and completed for rigless testing.
Seven gas samples collected whilst drilling.
50.5 metres of gross sand interval in primary target.
Secondary targets Ma and TGB-6 sand intervals confirmed to be present and gas-bearing based on NuTech petrophysics and gas samples collected whilst drilling.
Ma and TGB-6 intervals correlated with MOU-1 drilled in 2021 to potentially define a single structure covering up to 21 km2.
11 metres of unexpected sand encountered at shallow depth with over-pressured gas.
Formation damage predicted due to necessity to drill with heavy drilling mud – to be potentially penetrated using Sandjet rigless testing technology.
· MOU-4 was drilled to 1,199 metres Measured Depth and completed for rigless testing.
Unexpected 58 metres of gross M1 Sand potential reservoir interval, interpreted by NuTech as gas-bearing.
21 metres of gross sand in primary target with improved reservoir characteristics compared to MOU-3 and interpreted as gas-bearing by NuTech petrophysics.
MOU-3 and MOU-4 confirmed potential for stratigraphic trap covering 68km2 for the primary Moulouya Fan target.
MOU-4 achieved its secondary objective by defining the edge of the Jurassic carbonate prospect located to the east of the MOU-4.
The new post-drill well tie to the seismic data validated the pre-drill Jurassic prospect and increased the area of structural closure from 126 to 177 km².
Formation damage also predicted due to necessity to drill with heavy drilling mud – to be potentially penetrated using Sandjet.
· Successful completion of the drilling programme allowed the Company to enter into the signing of a Memorandum of Understanding in relation to gas sales and collaboration for up to 50 million cubic feet of gas per day (50 mm cf/d) with Afriquia Gaz.
· 29 additional prospects and leads have been identified during 2023.
· On 7 November 2023 the acquisition of T-Rex and an 83.8% interest in and operatorship of the Cory Moruga Exploration and Production Licence was completed following receipt of agreements from the Trinidadian Ministry of Energy and Energy Industries (“MEEI”).
· Work Programme agreed by the Company with the MEEI will be conducted over the next three years with the initial focus will on a low-cost re-entry of the Snowcap-1 discovery well to restore production and a re-entry of the Snowcap-2ST1 and Jacobin-1 wells to establish potential production.
ESG
· In 2023 the Company spent 25,855,427 Dirhams in Morocco on local services in relation to drilling of three wells 10 kilometers northwest of Guercif city.
Beneficiaries included civil engineering contractors; field support activities including provision and mobilisation of cabins; provision of Guercif warehouse staff (renting of warehouse in Guercif city); provision
of water and waste disposal; fuel supplies; transport and drivers; local hotel accommodation for rig and well services crews; heavy lifting equipment; internet services and provision of office equipment; and accounting and customs administration services. This was a significant boost for the local economy.
Highlights of Directorate Changes
· There were no directorate changes during 2023.
Post Period End:
· The Company published an Independent Technical Report (“ITR”) by Scorpion Geoscience Ltd. for the Cory Moruga block and resource potential of the Snowcap Discovery.
· The Company provided an update on the Phase 1 and Phase 2 rigless testing programmes for the Guercif Licence.
· The Company published an Independent Technical Report (“ITR”) by Scorpion Geoscience Ltd. for the Guercif block and resource potential of the Moulouya Sub-Area following an evaluation of the 2023 drilling programme results.
· The Company announced that it had received a communication from the GeoScience Regulation Office (“GSRO”) at the Department of the Environment, Climate and Communications informing the Company that consideration of its application for a successor authorisation to Licensing Option 16/26 Corrib South was hoped to be concluded during Q1 2024.
· The Company indicated that the commencement of the Phase 1 rigless testing programme was expected to occur on or about 29 January 2024.
· The Company extended its 2022 rig contract for the use of the Star Valley Rig 101 to facilitate the drilling of MOU-5 subject to regulatory approvals.
· The Company announced the results of the Phase 1 rigless testing programme and confirmed potential formation damage.
The results of the Phase 1 rigless testing programme allows the design parameters for the Sandjet testing programme to be set with a higher degree of confidence in relation to achieving key objectives of reservoir penetration.
Seven gas samples collected in isotubes in MOU-3 whilst drilling were analysed by Applied Petroleum Technology (UK) Ltd. (“APT”) in Oslo. Gas composition is in the range 98.04 to 99.57% methane, making it ideal for a Compressed Natural Gas development with minimum processing. Isotope analysis indicates the gas is biogenic in origin.
The Company also announced that it would continue to progress planning activities for the drilling of the MOU-5 well to test a large Jurassic structure updip from MOU-4.
Paul Griffiths, Executive Chairman of Predator Oil & Gas Holdings Plc commented:
“We are pleased to have completed successfully and within budget a transformational 3-well drilling programme in Morocco.
We have identified a significant potential gas structure linking the MOU-1 and MOU-3 wells that will be evaluated by a rigless testing programme using Sandjet perforating technology to reach beyond potential formation damage.
We have also encountered shallow higher pressure gas that was better protected from formation damage whilst drilling by the setting of a shallow casing string. This can also be perforated and tested now using Sandjet, even though it sits behind two casing strings.
The shallow and intermediate reservoir sands combined with the analysis of the gas samples collected whilst drilling, confirming very high purity methane gas composition at all reservoir levels, are ideal for an easily scalable CNG development project.
We are confident that potential gas flow rates using Sandjet will fulfil the potential 50 million cubic feet of gas per day profile facilitated by the Collaboration Agreement with Afriquia Gaz.
Additionally we have increased the areal extent through drilling of the pre-drill primary target, the Moulouya Fan, to 68 km2 and that of the Jurassic target tested at its extremity by MOU-4, to 177 km2. Further appraisal of these large traps may facilitate a later gas-to-power project. The potential for significant condensate resources in the Jurassic target may also exist and will be tested by the MOU-5 well in 2024.
We are excited by the biogenic gas potential at Guercif and the areal scale of the individual tested structures, which is unique for Northern Morocco, but not in terms of the large biogenic gas finds in the area of the Mediterranean region.
We have completed the acquisition of a large equity interest in the onshore Cory Moruga Exploration and Production Licence in Trinidad. This is a unique opportunity to develop an onshore oil field that has not been developed previously and hence has none of the historical issues linked to low well productivity for mature oil fields. Combined with the substantial legacy tax losses this potentially drives a brand new and most probably unique economic model for onshore Trinidad driven by higher well deliverability, lower operating costs, organically-funded modest and manageable capital investments out of production and the application of new technologies such as Sandjet and NuTech.
The Company is a prudent and experienced operator, as we have shown in 2023 and will continue to deliver in 2024. We manage costs carefully, even during times when inflationary pressures and “shrinkflation” have become a normal modus operandi for some suppliers and services.
Like many listed companies of our size we are extremely disappointed with the over-regulated London public markets and their poor appreciation of the value of businesses and opportunities that several companies have created and further developed. Many of our shareholders, including the executive directors, seek to re-set the valuation of our assets through means other than the intra-day share price. This will be the top priority for 2024 and will focus on entities that understand the true value of natural resources in oil and gas commodity sector, as has been proven cyclically time and time again and which continues to support the global economy and is the catalyst for promoting viable economic growth.
We thank our shareholders for their continued support along our journey towards achieving our ultimate goal. It is not an easy path when wedded to a public market that is contracting in relation to its global peers through an inability to reform and refresh in a timely manner to become more attractive and competitive. You might surmise that it would be “in the public interest” so to do, but there again perhaps it’s not. 2024 should be an interesting year.”
For further information visit www.predatoroilandgas.com
Follow the Company on X @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 Paul Griffiths Executive Chairman Lonny Baumgardner Managing Director |
Tel: +44 (0) 1534 834 600 |
