Predator Oil & Gas Holdings plc has reached a final settlement over its carbon dioxide enhanced oil recovery (CO2 EOR) well participation agreement at the Inniss-Trinity project in Trinidad.
LITIGATION
In June 2022, the company began litigation against the Challenger Energy Group plc over a loan and premature termination of the project.
The agreed settlement comprises a signed binding term sheet with Challenger for the acquisition of its 83.8% interest in the Cory Moruga asset with the cost offset by, among other matters, debts and loans by either party.
CORY MORUGA
In 2017 Predator identified the onshore Cory Moruga field in Trinidad as a prime candidate for CO2 EOR but the company chose to focus on the Guercif licence in Morocco.
The company said that the underdevelopment of Cory Moruga had resulted in the maintenance of higher reservoir pressures, creating the possibility for a miscible CO2 EOR project for a potentially significant increase in oil recovery.
TERMS
Predator will acquire 100% of the issued shares of Challenger’s indirectly wholly owned subsidiary T-Rex Resources (Trinidad) Ltd which holds 83.8% interest in and operates the Cory Moruga licence.
The gross consideration is US$9 million of which $3 million is payable in instalments offset by a sum $6m.
The company said this reflected T-Rex’s liabilities, the option value in Challenger’s £2.25m back-in right, repayment of all loans and debts owed or claimed by either party over Inniss-Trinity, and the final agreed settlement of all disputes and claims in relation to the project.
Predator has until 31 January 2023 to complete confirmatory due diligence on the transaction which is conditional on regulatory approvals.
Both companies will complete the deal on or before 30 May 2023, with a long stop date of 31 August 2023 after which either party may terminate the agreement or mutually agree to an extension.
GROWTH OPPORTUNITY
Predator said that a revised work programme would include technical work, CO2 EOR activity and new well drilling during 2024.
Executive chairman Paul Griffiths added that the company would be leveraging its expertise in CO2 EOR techniques and methodologies developed from the Inniss-Trinity CO2 EOR project.
“This allows us to capture value for the Inniss-Trinity CO2 EOR project that would otherwise have been unrealised.
“Cory Moruga creates another exciting growth opportunity for 2023 which the company can operate entirely itself and can exercise direct control over the receipt of potential future production revenues.”