Predator Oil & Gas Holdings plc expects to start drilling within the first two weeks of December the MOU-2 well at the Guercif onshore gas operations in Morocco.
PREPARATIONS
The exact date drill date will be determined by customs clearance of all pre-ordered drilling materials from Canada, Egypt, France, the Middle East and the UK.
The time taken at customs reflects the pressure on logistics and the supply chain created by the war in Ukraine for larger drilling services companies.
Predator expects that re-assessing and adjusting components of the drilling mud system and adjusting mud weights, based on information from MOU-1, will provide greater reservoir protection while drilling as well as facilitate a successful rigless testing programme.
FINANCES
The company will make “significant cost savings” through optimising the overall drilling programme by using the MOU-1 experience as well as connecting to multiple service providers to overcome supply chain issues.
As a result, the budgeted cost of MOU-2 remains very close to the final well cost for MOU-1 despite significant increases in the cost of equipment, materials and personnel.
The company expects to sign gas sales agreements shortly after the MOU-2 test results and agree an initial financing package for a simple compressed natural gas (CNG) pilot development.
SHAREHOLDER VALUE
Executive chairman Paul Griffiths added that the company’s multiple gas prospects in the Guercif licence area gave further “running room” without the need to expand its portfolio.
“The option to prudently finance further step-out drilling on the back of revenue generation from CNG sales is an attractive business development strategy.
“However MOU-2 and MOU-1 rigless testing could potentially confirm continuity of the Moulouya Fan over an area of 30km² to support a case for the higher end of the net contingent gas resources to the company of 708 Bcf.
“If this were the case the company would not hesitate to initiate a corporate transaction to monetise shareholder value.”