Predator Oil & Gas Holdings plc said it would open options to monetise its Guercif interests onshore Morocco following an independent valuation of contingent gas resources.
LICENCES
The Guercif licence comprises exploration permits I, II, III and IV covering 7,269 km².
The competent persons report (CPR) by SLR Consulting (Ireland) Ltd was for the Guercif MOU-4 prospect.
This is now defined as the Tertiary Moulouya Turbidite Fan appraisal project following the incorporation of the MOU-1 drilling results
ESTIMATES
SRL established gross best estimate of 393 billions of standard cubic feet of gas (Bcf).
This is based on a conservative 66% gas recovery over 13 years, with 295 Bcf net to Predator’s 75% interest.
The best estimate assessment used a gas initially in place (GIIP) estimate of 595 Bcf based on an area of closure following the drilling of MOU-1 of 31.7 km².
The estimated net present value (ENPV) (unrisked) for Predator’s 75% interest is US$592 million.
SLR indicated a high estimate of 708 Bcf net attributable to Predator’s 75% interest based on a higher GIIP estimate for thicker reservoirs.
MOU-1 TESTING
The company said it was fully funded for the MOU-1 extended rigless well testing operations.
Predator plans to test MOU-1 following the anticipated relaxation of Covid travel restrictions in Morocco.
FINANCING
The company added that de-risking a working petroleum system in the Guercif licence of 7,269km² created a “significant challenge” to accelerate the evaluation of the area’s full potential.
“This will require securing the longer term financing and joint venture partnerships required to realise shareholder value at a time when the oil and gas sector is being strongly impacted by climate change concerns.
“The company’s current public market capitalisation no longer reflects the value of its Guercif asset in terms of its development potential.
“Guercif represents one of the largest onshore licences in Morocco with gas prospectivity established by MOU-1.
“The company will consider all options to monetise its asset during 2022.”
ADDITIONAL OPTION
Chief executive Paul Griffiths added that the realisation of contingent gas resources gave the company an additional option for shareholder monetisation.
“In order to create greater financial substance a reversal into an entity wanting exposure to the Guercif opportunity should not be discounted as a future option.
“Management and the largest individual shareholder would be very supportive of such a move if the value proposition was sufficiently attractive for shareholders and guaranteed accelerated exploitation of the full potential of the Guercif licence area.
“The ENPV versus current market capitalisation demonstrates an imbalance that does not reflect potential shareholder value.”