- Collaborating in relation to European Energy Supply, Storage and Security
- Agreements to evaluate co-operation on gas marketing
- Agreements to evaluate potential Moroccan farmout
- C02 EOR expansion in Trinidad initiated under existing Memorandum of Understanding
- Agreement to evaluate opportunity to acquire an interest in a green hydrogen company
- Financial Advisor appointed
Predator Oil & Gas Holdings Plc (PRD), the Jersey-based Oil and Gas Company with operations in Morocco, Ireland and Trinidad focussed on diversification and security of European energy supply in the context of the Energy Transition and based on gas as a sustainable lower carbon fuel, is pleased to announce a corporate update.
Mag Mell Energy Ireland Ltd. is a gold sponsor of Ireland's National Energy Summit at Croke Park on 26 April 2022, https://energysummit.ie/sponsors/. CEO Paul Griffiths will be taking part in the Panel Discussion "Collaborating to ensure Energy Supply, Storage and Security".
As previously announced the Company negotiated a Memorandum of Understanding ("MOU") with a significant downstream marketing entity to work together to determine the potential market for FSRU gas and to assess the potential to market gas from seasonal storage operations. The objective is to optimise the technical specifications of the FSRU and gas storage facilities for gas send-out to meet periods of high demand and high gas prices.
Preliminary discussions with an Asian LNG supplier, amongst others, have taken place to evaluate the feasibility and possibility of securing LNG supply prior to a Financial Investment Decision for the offshore Mag Mell Floating Storage and Regassification Project ("FSRUP"). Potential future gas storage capacity at the proposed Ram Head offshore subsurface facility is also being considered by the Company in the wider context of security of European energy supply. All decisions are subject to the required Irish regulatory approvals being given in a timely manner at this time of European energy crisis.
Escalating geopolitical tensions have impacted the security of European gas supply and contributed to surging wholesale gas prices. The Company's strategy for appraising and developing the MOU-1 gas discovery remains on track. The release of the Competent Persons Report announced last month defining material contingent gas resources has been a catalyst for attracting significant interest in the Company's plans to further explore, appraise and develop gas in an area covering 7,269 km˛ and which is connected to the European gas grid through the Maghreb gas pipeline. Morocco is a country very close to Europe and strategically located to become a potential future gas supplier for the continent by means of a significant expansion of exploration and development. The Company's large Guercif Petroleum Agreement is optimally located to potentially contribute to developing Moroccan gas.
A company update note has been produced by Novum Securities and is available at www.predatoroilandgas.com.
The Company is pleased to announced that it has signed Confidentiality Agreements with a company based in the United Arab Emirates and an Asian exploration and production company to evaluate the exploration, appraisal and development opportunities in the area covered by the Guercif Petroleum Agreement.
Separately the Company has signed a Confidentiality Agreement with a company in the downstream sector in Morocco to work together to optimise the potential market for gas from the area covered by the Guercif Petroleum Agreement.
The focus of these activities is to seek to build the partnership necessary to finance the development of the prospective area for gas established by MOU-1 and to accelerate monetisation. The attractive commercial metrics and regional political tensions demand that the role of gas as the fuel of choice for a pragmatic Energy Transition and to preserve security of European Energy Supply becomes a strategic objective.
The Company continues to focus on the logistical planning for follow-up drilling to MOU-1 with the objective of developing a multi-well drilling and testing programme (already including MOU-4 and MOU-5) to provide economies of scale to spread fixed drilling and well services costs across several wells.
The recent increased perception of the value of gas assets close to the European gas network has created additional financing opportunities for drilling and development that potentially reduce in the medium term or may even eliminate in the short term the requirement for significant shareholder dilution.
As a result the Company is continuing to execute its work programme, which is fully funded, to increase the scale and diversity of its exploration portfolio of prospective leads as follows:
1. MOU-NE, MOU-2 and MOU-3
- 250 kilometres of 2D seismic reprocessing commenced to refine well objectives
- Environmental Impact Assessments completed
- Evaluation of the Tizroutine oil seep and potential for oil in the northwest area of the Guercif Petroleum Agreement
FSRU LNG import
The Company previously submitted to regulatory authorities an FSRU LNG import proposal for consideration.
With the significant progress made in the planning and design of the FSRU LNG import facility for Ireland and the worsening situation for security of gas supply in Europe, the Company believes that it is an opportune time to re-engage with the regulatory authorities in Morocco to advance an FSRU LNG solution for Morocco.
The Company has successfully decommissioned its CO2 EOR surface facilities at Inniss-Trinity and recovered its downhole equipment for safe off-site storage. The Company continues to evaluate its options under the Inniss-Trinity Well Participation Agreement ("WPA") with FRAM Exploration Trinidad Ltd. to recover significant CO2 EOR revenues that the Company believes it is entitled to under the WPA and to assess the potential for an amicable settlement resulting from FRAM Exploration Trinidad Ltd.'s unilateral decision to prematurely terminate the Inniss-Trinity CO2 EOR project.
The Company is making good progress with Lease Operators Ltd ("LOL") for a new CO2 EOR joint development project for the PS-1 Block field. LOL is making excellent progress towards the award of a Certificate of Environmental Clearance and initial potential CO2 injection and production wells have been reviewed. LOL currently have 1850 bopd of production onshore Trinidad.
Discussions are continuing to create a jointly-owned in-country Special Purpose Vehicle to develop CO2 EOR projects based on prioritising the technical suitability of a number of onshore producing fields.
Rising oil prices combined with the Company's "Proof of Concept" for CO2 EOR and CO2 sequestration in Trinidad has created a much more attractive commercial case for expanding CO2 EOR for "greener" oil production at a time of rising energy costs and demand.
The Company has taken a strategic decision to add green hydrogen (from the electrolysis of water) to its business development plans.
The Company's management has extensive experience in the natural gas sector in the areas of regulatory and environmental compliance, use of infrastructure, Compressed Natural Gas development options, gas storage, well-site gas-fired power generation, CO2 sequestration and downstream gas marketing and government relations. The Company's projects can create access to infrastructure and to potentially significant volumes of future surplus gas, particularly at times of lower prices during reduced seasonal demand, with which to be in a position to produce cheap gas-fired, using its own surplus gas feedstock, well-site electricity for green hydrogen as a replacement for carbon-intensive fuel oil during the Energy Transition.
Surging natural gas prices have re-defined the potential commercial markets for green hydrogen, which can also contribute to security and diversity of the Energy Supply.
The Company is seeking to become an early mover into a hybrid "green hydrogen - natural gas" business which could become a significant component of the Energy Transition and generate potential carbon credits by displacing carbon-intensive fuels. The Company has the necessary skills to develop "Proof of Concept", as demonstrated by the implementation of CO2 EOR and CO2 sequestration in Trinidad.
Unlike gas, green hydrogen is a stable source of sustainable fuel beyond the Energy Transition that has a fixed delivery profile, unlike gas where the delivery profile is impacted by reservoir pressure depletion. This creates the ability to enter into longer term supply contracts at a fixed delivery rate for the duration of the contract, therefore contributing to security and diversity of energy supply.
Currently the Company is fully funded to support desk-top studies to advance green hydrogen opportunities.
The Company is pleased to announced that it has signed a Confidentiality Agreement with an entity focussed on green hydrogen to evaluate a possible acquisition of a controlling interest in that entity to develop green hydrogen (electrolysis of water) and green methanol (using anthropogenic CO2 emissions) projects.
Appointment of Financial Advisor
Based on the accelerated development of potential transactions at the project level, the Company has decided that it is the appropriate time to appoint an independent Financial Advisor.
The Company has appointed Peterhouse Capital Ltd. as Financial Advisor.
The Company has also decided to suspend the potential AIM Admission process as the impact of the release of the Competent Persons Report on 13 January this year combined with surging gas prices due to heightened regional instability in Europe has in the view of the Company re-defined potential shareholder value that was not being reflected in the AIM Admission process.
Other options to develop the Company's extensive portfolio of diverse Energy Transition projects have assumed primary focus and potentially may give a better return for shareholders without increasing the corporate running costs, which an AIM admission would have led to, and without increasing shareholder dilution based on a potential under-valuation of the Company's assets at a time of surging commodity prices.
The independent legal due diligence work carried out by the advisors during the early stages of the AIM Admission process is extremely valuable in the context of adding to the materials required to support due diligence to execute transactions with third parties at the project level.
The Warrant Instruments between Novum Securities Ltd and Predator Oil & Gas Holdings plc
1) dated 15 February 2019 granting the right to subscribe in cash for 2,000,000 ordinary shares exercisable at a price per share equal to the subscription price (12p per share) is being amended to allow the exercise date of the warrants to be extended by one year to the fourth anniversary of the date of the Warrant Instrument.
2) dated 24 May 2018 granting the right to subscribe in cash for 2,053,678 ordinary shares exercisable at a price per share equal to the subscription price (2.8p per share) is being amended to allow the exercise date of the warrants to be extended by one year to the fifth anniversary of the date of the Warrant Instrument; and
the Warrant Instrument between Optiva Securities Ltd and Predator Oil & Gas Holdings plc
3) dated 24 May 2018 granting the right to subscribe in cash for 160,714 ordinary shares exercisable at a price per share equal to the subscription price (2.8p per share) is being amended to allow the exercise date of the warrants to be extended by one year to the fifth anniversary of the date of the Warrant Instrument.
This is in recognition of the fact that the COVID-19 pandemic has had an unexpected and significant impact on business activities during the last 2 years.
These existing warrants have already previously been factored into the fully diluted share capital of the Company.
With immediate effect Dr. Steve Staley is stepping down from the Board to pursue other interests. The Board wishes to thank him for the significant contribution that he has made to the Company since admission to the Official List (standard listing segment) and to trading on the London Stock Exchange's main market for listed securities Standard List segment in May 2018.
The Board is to appoint at least one additional non-executive director with the relevant experience in corporate governance, financial transactions, ESG development and, potentially, with some exposure to the green energy sector to support the Company through its implementation of its business development strategies through the Energy Transition.
Paul Griffiths, CEO of Predator Oil & Gas Holdings Plc commented:
"The Company was formed and its business strategy was initiated in 2015 to incorporate the intuitive premise that an over-reliance on imported gas to markets where gas was critical to sustaining security of energy supply would eventually create niche opportunities for business development. Brexit and recent events in Eastern Europe have shown the value of maintaining this unwavering focus on developing a portfolio that defines this strategy.
2022 so far has been an exceptionally busy time for the Company and an opportunity to re-direct resources to demonstrate the significant strategic value of the portfolio of projects that we are developing to our potential project partners.