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Oilman Jim's Private Blog


Predator Oil & Gas - Final Results

Predator Oil & Gas Holdings Plc (PRD), the Jersey-based Oil and Gas Company with operations in Trinidad, Morocco and Ireland is pleased to announce its audited annual report and financial statements for the year ended 31 December 2019 ("2019 Report"), extracts of which are set out below. 

The Company's 2019 Report is being posted to shareholders over the coming weeks, allowing for production delays and restricted working practices caused by COVID-19. Copies of the Annual Financial Report will be available at the time of posting to download from the Company's website at .

In addition, a copy of the 2019 Report will be uploaded to the National Storage Mechanism and will be available for viewing at .

The financial information set out below does not constitute the Company's statutory accounts for the year ending 31 December 2019.

Key Activities in 2019

Highlights include:

· Formally signed the Guercif Petroleum Agreement (the "Guercif PA") and Association Contract with the Office National des Hydrocarbures et des Mines ("ONHYM") acting on behalf of the State, allowing the Company an entry into an attractive gas exploration and appraisal drilling and gas marketing opportunity in Morocco.

· Commissioned independent competent's persons report ("CPR") for Guercif which estimates first of several prospects selected for drilling to hold 320 BCF of net recoverable prospective gas resources.

· Entered into a rig option agreement with Canadian drilling contractor Star Valley Drilling Ltd. for Guercif drilling.

· Advanced operational planning to "drill-ready" status at minimal cost whilst maintaining current Guercif net equity at 75%.

· Approvals received from Environmental Management Authority and Heritage Petroleum Trinidad Ltd. for the implementation of CO2 injection in the Inniss-Trinity field onshore Trinidad.

· Inniss-Trinity Incremental Production Service Contract ("IPSC") extended by two years based on implementation of Predator's Enhanced Oil Recovery pilot project using carbon dioxide injection ("CO2 EOR").

· Completed workover of wells for CO2 injection and imported and assembled all the specialist CO2 delivery system equipment in Trinidad necessary to maintain "operations-ready" status.

· Maintained exclusivity over Trinidad's entire supply of surplus liquid CO2.

· Commissioned independent competent person's report for the CO2 EOR potential of the Inniss-Trinity field which estimates that CO2 EOR contingent, pending development, gross oil resources for the field are 6.8 million barrels. Retained an exclusive option to acquire Fram Exploration Trinidad Ltd. ("FRAM") and to further develop the potential CO2 EOR contingent resources.

· Developed new business strategy for Ireland and progressed discussions with LNG suppliers regarding the potential for offshore regasification and the development of gas storage facilities using existing infrastructure offshore Ireland.

· Through its operations the Company has positioned itself to demonstrate a practical commitment to helping to reduce anthropogenic carbon emissions in Trinidad aligned with Sustainability protocols, Environmental, Social and Governance ("ESG") goals and growing climate concern awareness.

Highlights of Financial Results for 2019

· Loss from operations of £1.279 million (2018: Loss of £0.792 million)

· Cash balance at period end of 2019 £0.110 million (2018: £0.973 million)

· Raised £1.5 million through the issue of a convertible loan note ("Loan Notes") to Arato Global Opportunities LLC ("Arato") to facilitate signing of the Guercif PA. 

· Issued warrants to subscribe for 4,083,333 Ordinary Shares in the Company at an exercise price of 12p per share to Arato and Novum Securities.

· Reduced principal outstanding on the Loan Notes by £485,000 through the issue to Arato of 8,035,019 ordinary shares, representing an average price of £0.0603 per share.

Post Period End:

· Rig option with Star Valley Drilling Ltd. ("Star") exercised at no cost to the Company.

· Environmental Impact Assessment, valid for 5 years, of three drilling locations in the Guercif PA ratified by the Ministry of Energy and Mines and Environment and is valid for 5 years.

· First injection of CO2 into the Inniss-Trinity field successfully executed and encouraging pressure build up in the injected reservoir recorded.

· Placing of 89,000,000 shares at 4 pence per share raised £3.56 million before expenses.

· 4,875,000 shares and warrants over 4,450,000 new ordinary shares at 4p per share issued in settlement of Placing Fees to maximise available cash for the Company.

· COVID-19 pandemic represents the most significant Post Period Event with material impact on supply chains, commodity prices, markets and financial performance.

· Company has taken measures to ensure that key operational objectives in Trinidad remain achievable even at low commodity prices; corporate costs are minimised; no new onerous liabilities are entered into until financial and equity markets recover; and the current well-capitalised position of the Company is prudently managed.

Paul Griffiths, Predator's CEO, said:

"In the coming month, emphasis will be placed on injecting CO2 into the AT-4 Block at Inniss-Trinity at the calculated rate to re-pressurise the reservoir to gradually increase potential oil flow rates to their maximum potential. We are very confident that our CO2 EOR strategy is working and has the potential to generate positive cash flow at very low oil prices due to the favourable commercial terms we have negotiated and our attention to cost-cutting. Opportunities for further expansion of the CO2 EOR potential onshore Trinidad are being actively progressed.

We remain "drill-ready" onshore Morocco and await the lifting of COVID-19 restrictions to progress further the drilling programme. Until that time we are working to find a low cost, fast-track solution for early monetisation of a successful gas discovery. Being "drill-ready" and with a clear, costed path to early monetisation provides us with potential to introduce partners capable of funding the initial development phase to capture part of an attractive indigenous gas market.

In Ireland we are advancing our new business development strategy to focus on offshore LNG regasification by leveraging our relevant experience and expertise. We have made faster than anticipated progress with our preferred LNG supplier and owner of regasification vessels and have begun the process of engaging with the Irish regulatory authorities. A further update will be issued in due course. 

The Company is currently well-capitalised to withstand the COVID-19 emergency and to pursue its business growth potential, which now also includes looking at opportunities to lever ourselves into distressed assets where we can add value. This robust position through the COVID-19 emergency could never have been achieved without the addition of the Guercif opportunity, the investment case for which drove the Company's recent placing. The investment case remains absolutely solid and is the reason why we continue to remain "drill-ready" in Morocco. The Guercif opportunity could only have been acquired by the Company taking out a Convertible Loan at the time the opportunity became available and before the Rharb Basin drilling programme was successfully completed by another operator and competition for Guercif crystallised. On such difficult business decisions success or failure rests when once in a generation events like COVID-19 strike. The Company is very well positioned and looking forward to continuing to develop and monetise its potential over the next 12 months." 

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