Annual Report for the
Year ended 31 December 2023
Contents
Pages
Chairman’s statement 1 - 4
Strategy 5 - 6
Group strategic report 7 - 62
Report of the directors 63 – 68
Board of directors 69 – 70
Corporate governance report 71 – 76
Directors’ remuneration report 77 – 83
Independent auditor’s report 84 – 89
Consolidated statement of comprehensive income 90
Consolidated statement of financial position 91
Consolidated statement of changes in equity 92
Consolidated statement of cash flows 93
Statement of accounting policies 94 – 101
Notes to the financial statements 102 – 121
Corporate information 122 – 123
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
1
Chairman’s Statement
Dear Shareholder,
On behalf of the Board of Directors, I hereby present the consolidated financial statements of Predator Oil &
Gas Holdings Plc (the “Group”, “Predator” or the “Company”) for the year ended 31 December 2023.
2023 has seen the Company successfully plan and implement a three-well drilling programme in line with its
strategy of focussing on high impact drilling for gas onshore Morocco. It has also completed the acquisition
of T-Rex Resources Trinidad Limited (“T-Rex”), aligned to its strategy of capitalising on its Enhanced Oil
Recovery and CO2 sequestration operational expertise gained onshore Trinidad (“CO2 EOR”). A draft policy
to create Carbon Capture and Storage (“CCS”) specific legislation is currently being circulated to stakeholders
by the Ministry of Energy and Energy Industries (“MEEI”). The purpose is to address the Government of
Trinidad and Tobago’s Action Plan for the mitigation of Green House Gases (“GHG”) aimed at cutting CO2
emissions by 15% by 31 December 2030 (equivalent to 103 MtCO2e). Geological subsurface storage is seen
as a key element of CO2 sequestration. The potential exists therefore for converting CO2 EOR projects to CCS
facilities in the future.
Results from the MOU-3 and MOU-4 wells completed for rigless testing were encouraging and helped to de-
risk the Compressed Natural Gas (“CNG”) development case. This is the Company’s preferred scenario for
supplying the industrial gas market in Morocco to help reduce a current reliance on carbon intensive Liquified
Petroleum Gas imports. Importantly, MOU-3 confirmed the interpretation of the results of the MOU-1 well
completed in July 2021 and established a new, previously overlooked, potential gas basin covering up to 240
km² in the northwest corner of the Guercif Licence. This has created the opportunity to re-assess a previously
unexplored part of the Guercif Licence from the perspective of developing new gas prospects at several
different geological levels.
Higher gas prices are achievable in the private sector and CNG offers a simpler solution to deliver gas to
dispersed industrial users compared to investing in pipeline infrastructure, which requires more fixed capital
investment; takes longer to construct due to requirements for environmental approvals and land permitting;
and necessitates initially deploying more risk capital for drilling to underpin a minimum medium term gas
production profile to fix the required amount of pipeline capacity. By contrast CNG is a flexible and scalable
development where additional capital expenditure can be funded organically and proportionally out of
productions revenues given Morocco’s very favourable fiscal regime which mitigates against increased
operational and CNG transport costs.
Gas-to-power developments are longer term and will likely attract a lower gas sales price as the State is the
only permitted buyer of the gas for electricity generation.
The Company’s drilling programme has therefore been targeted at defining the minimal, relatively modest,
flow rates required for a scalable CNG development to create a revenue-generating business, whilst
maintaining the impetus to discover larger volumes of gas for an enlarged industrial market. In this respect the
signing of a Memorandum of Understanding in relation to gas sales and collaboration for up to 50 million cubic
feet of gas per day (50 mm cf/d) with Afriquia Gaz SA (“Afriquia Gaz”) and the granting of a 12-month
exclusivity period to negotiate a legally binding Gas Sales Agreement is extremely significant. Equally important
is that Afriquia Gaz would purchase the gas at the well head thereby relieving the Company of the burdensome
requirement to operate complex downstream logistical operations in relation to the continuous movement of
CNG trucks to end users from any gas processing site at Guercif. This would have otherwise detracted from
our core strengths of finding over-looked and missed opportunities where value can be added through deep
understanding of geology, operational practices and commercial framework to facilitate drilling activity to test
the risk versus reward value proposition.
Afriquia Gaz is Morocco’s leader in the distribution of liquefied petroleum gas, butane and propane with an
annual turnover of 8.72 billion Moroccan dirhams (27 October 2022).
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
2
During the year the Company evaluated further its large Jurassic prospect, which was re-mapped following the
preliminary results of the MOU-4 well and as a result has increased in area by 40% to a maximum structural
spill area of 177km². Future markets for any gas discovered at this location might include gas-to-power and
export to Europe via the Maghreb gas pipeline, which is conveniently located within 10 kilometres of the
preliminary well location to test the Jurassic prospect.
At the end of the year the Company had finalised a rigless testing programme for the MOU-1, MOU-3 and
MOU-4 wells and had submitted it for approval by the regulatory authorities. The programme is broken down
into two phases to allow sufficient time for the results of the first phase of rigless testing using conventional
perforating guns , which is designed to assess their ability to perforate through potential formation damage
resulting from heavy drilling mud, to be evaluated before planning and implementing the second phase of
rigless testing using the more innovative Sandjet technology, never trialled before in Morocco but potentially
very well suited to the geological environment tested by the wells drilled to date.
Given the Company’s high level of activity in 2023 in the Initial Period of the Guercif Petroleum Agreement,
that included advancing drilling in 2023 scheduled for the First Extension Period, it has been necessary to seek
regulatory approvals first to extend the Initial Period from 5 August 2023 to 5 February 2024, and then to
further extend to 5 June 2024 to facilitate the drilling of the Jurassic prospect. Whilst this caused a delay in the
execution of the rigless well testing programme, originally scheduled for 2023, it is a critical necessary step to
allow sufficient time to complete all the operational activity and evaluation of the results necessary for the
Company to properly evaluate and advance in a methodical manner its development of its core asset in
Morocco.
In the latter part of 2023, the Company completed the acquisition of T-Rex and operatorship of the Cory
Moruga Exploration and Production Licence onshore Trinidad (“Cory Moruga Project”) containing the Snowcap
discovery. The acquisition cost for P50 Prospective and Contingent resources represented US$0.14 per barrel
made up of consideration paid and a one-off cash payment to the MEEI to address legacy liabilities accrued by
the previous operator. Corresponding after-tax undiscounted netback is forecast to be US$19.61 per barrel
(using a flat WTI oil spot price of US$76 per barrel), based on the Independent Technical Report produced by
Scorpion Geoscience Limited. This is subject to regulatory approval and successful execution of a Field
Development Plan (“FDP”).
Most importantly the Cory Moruga Project represents an opportunity to re-set the commercial metrics for
developing hydrocarbon resources onshore Trinidad in a mature oil and gas province. The acquired tax losses
can be offset against Petroleum Profit Tax whilst the licence royalties are reduced as Heritage, the State oil
company, has no overriding economic interest, as is the case for the Incremental Production Service Contracts
which currently apply to a number of Trinidad’s onshore producing fields that are approaching the latter stages
of economic life.
The Cory Moruga Project covers an area where there is potential to establish new oil production from
reservoirs at or near virgin reservoir pressure using modern drilling, wireline logging and well testing Sandjet
technology, which the Company proposes to evaluate first in Morocco. Incorporation of valuable offset
subsurface data from adjoining fields that have been producing since the late 1950’s can be utilised to pin-
point new well locations to maximise well deliverabilities and improve project economics.
The Cory Moruga Project is also suitable for CO2 EOR at an appropriate stage in the FDP. CO2 EOR would
potentially benefit from being able to access the modern FDP development wells necessary to eliminate the
problems associated with injecting CO2 under pressure into very old wells not designed for such a purpose.
CO2 EOR is compatible with promoting a stable period of Energy Transition for those countries where the
economies are heavily reliant on revenues and taxes from the oil and gas sector. It’s a practical short-term
measure that contributes positively to assisting to achieve the longer term solution of greener energy supply,
storage for anthropogenic CO2 and promoting economic stability.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
3
At an appropriate time when field production is declining, the facilities and subsurface reservoirs could
potentially become available for inclusion in the MEEI’s proposed Carbon Capture and Storage (“CCS”) policy.
In Ireland the Company’s shorter-term emphasis shifted in 2023 to re-focus on securing a successor
authorisation for Corrib South. Energy security, gas storage and preserving EU gas infrastructure to maintain
diversification of entry points into the European gas grid independent of Russian gas supplies is becoming of
increasing strategic significance. Maintaining the longevity of the Corrib gas field infrastructure during the
Energy Transition for potential blended gas and hydrogen storage and possible LNG imports contributes to this
strategic objective.
The Company is working with a potential strategic partner in the event a successor authorisation for Corrib
South is awarded. The Company has grounds to be cautiously optimistic that the regulatory process to assess
the potential award of a successor authorisation will be concluded in Q1 2024.
The Energy Transition and “Security of Energy Supply” became critical issues in 2023 for the well-being of the
global economy. The informed narrative in relation to the “Energy Crisis” and the dawning of the practical
realisation that net zero CO2 emissions cannot be achieved without a period of transition has resulted in an
increased willingness to invest in the gas and, to a lesser extent, oil sectors in 2023.
Macro issues in 2023 continued to be dominated by the ramifications of the Ukraine-Russia conflict which has
led to a continuing Energy Crisis. Inflation has increased to levels that are beginning to create a slow-down in
the global economy which potentially could impact commodity prices in the oil and gas sector. The Company
is pleased to report that despite sharply rising costs it re-structured its Moroccan operations, by availing of
management’s extensive historical and present relationships with suppliers of well services in many different
jurisdictions, to maintain drilling costs in line with actual 2021 costs. However, 2024 will be another challenging
year as the impact of a new conflict in the Red Sea will undoubtedly have ramifications for the security of the
supply chain and fuel inflationary pressures for equipment and services; which in turn may lengthen the
timelines for delivery of long-lead equipment.
The Company has always maintained focus on and operatorship of its three core areas of Morocco, Trinidad
and Ireland. It has not diluted project equity in that time on the basis that any future monetisation of assets
has a greater chance of attracting entities of substance if the opportunity is material to them.
In 2023 the Company therefore took the opportunity, when possible and advisable to do so, to raise funds in
the public markets. This is not only necessary to maintain its projects in good standing but also to strengthen
the ability to progressively develop its assets within a new economic framework that can no longer rely on
traditional farmouts to industry majors and bank lending for funding business growth in the oil and gas sector.
The Company strengthened its finances through an over-subscribed Placing to raise an aggregate of
GBP10,000,000 (before expenses) This placing followed earlier Placings and equity raises in the course of 2023
which raised $4,250,377(before expenses). The Company eliminated its directors’ loans to remain debt-free at
a time of rising interest rates and harsher repayment terms.
Despite this dilutory impact the Company continues to grow its market capitalisation and to demonstrate the
appreciation in its share price since IPO in 2018 and the trading liquidity of its shares. This allows the Company
to attract potentially a greater proportion of institutional equity funding.
The outlook for 2024 will see the rigless testing programme in Morocco completed with the roll-out of the
Sandjet Phase 2 rigless testing programme and, subject to the Sandjet results, the CNG development plan
being progressed targeting “First Gas” in 2025, to allow for extended delivery times for long-lead equipment.
Additional high impact drilling opportunities in Morocco will be progressed in 2024 using discretionary funds
currently on the Company’s balance sheet.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
4
The Cory Moruga Project is a potential opportunity to generate positive cash flow in 2024 and will therefore
be given a high priority by the Company.
Market dynamics are cyclical and currently the appetite is for near-term, value creating, drilling success. The
Company’s portfolio is aligned with investor sentiment for near-term activity with the prospects of material
gains in a success case.
I should like to thank our shareholders, our Board of directors and our drilling operations team together with
all of our colleagues for their continued support and commitment over what has been an extraordinarily busy
year. I expect the coming year once again to be full of activity with operations prudently maintained to increase
the ability to reach a revenue-generating position at the earliest practical opportunity in what will continue to
be another challenging year for the global economy and cohesiveness of the supply chain logistics. Our team
has found ways to adapt to every challenge created since the COVID pandemic and 2024 will be absolutely no
exception. Strong, fair and purposeful and creative management built on delivering our operational goals in a
responsible and methodical manner will continue to prevail in 2024.
Paul Griffiths
Executive Chairman
9 April 2024
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
5
Strategy
The Company’s core strategy focuses on the Energy Transition to greener energy. The pragmatic role of gas is
recognised as a “sustainable” source of energy to bridge the gap between the expectations of a green energy
goal versus the economic and socially equitable reality of preserving an orderly and affordable energy market
during what might be perceived as a new industrial revolution.
The Company is also of the opinion that the upstream gas industry has much expertise to offer the renewable
energy sector. This is particularly relevant in the area of green hydrogen in relation to subsurface storage in
former gas reservoirs; transport using gas infrastructure; potential blending of green hydrogen; and natural
gas for power generation.
The Board believes that the Company’s medium-term future is tied to gas as being the flexible energy source
to replace coal and oil as a fuel for power generation to help de-carbonise the energy sector, thereby reducing
CO2 emissions, as gas by comparison is less CO2 pollutant.
Reducing current high levels of CO2 emissions by replacing carbon-intensive fuels used in the industrial sector
in Morocco is a realistically achievable near-term objective for executing the Company’s high level business
strategy.
The Company has assembled material and influential equity positions in a portfolio of assets combining existing
gas discoveries and new gas prospects adjacent to infrastructure owners seeking new opportunities to utilise
spare capacity and industrial markets heavily reliant on imported fuel oil.
Following the Company’s presentation to the Ministry of Energy and Energy Industries (“MEEI”) Carbon
Capture and Carbon Dioxide (CO2) Enhanced Oil (“CO2 EOR”) Recovery Steering Committee on 17 August 2021,
the Government of Trinidad and Tobago is seeking consultation on its Draft Policy to Create Carbon Capture
Utilisations and Storage Specific Legislation. Trinidad is a high emitter per capita of CO2 gases due to its large
number of ammonia and methanol plants. CO2 sequestration in reservoirs in Trinidad’s mature oil fields is an
area where the Company can seek to apply its business development strategy using its practical expertise
gathered from the successful execution of its Inniss-Trinity pilot CO2 EOR Project. The implementation of CO2
sequestration must be justified both by a credible commercial model, access to international funds and by
providing a socially just and equitable protective umbrella for local communities and economies which are
largely dependent on the oil and gas sector for their immediate livelihoods.
The Company believes that the availability of investment capital for the fossil fuel sector is becoming
increasingly squeezed due to re-alignment of available funds with green energy projects.
Accordingly, the business strategy of the Company has been adapted to reflect these changed circumstances
and to minimise where possible its capital requirements through:
Ensuring that all field operations are carried out in an efficient, safe, environmentally aware and cost-effective
manner to eliminate, where possible, unnecessary waste;
Using innovative technologies, such as Sandjet, to address specific geological circumstances that could impact
well deliverabilities;
Determining that all contracts with service and equipment providers are robustly negotiated to obtain the best
possible commercial terms for the Company;
Utilising management’s extensive experience, know-how and industry network to build a low-cost operating
capability;
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
6
Focussing capital resources on only projects where near-term monetisation is a realistic goal and can be
achieved within the constraints of a modest capital outlay;
Spending capital only in those geographic jurisdictions where there remains a strong internal market demand
for the products that the Company may produce in the near-term;
Directing capital towards those jurisdictions where the Company’s business development strategy is aligned
with current government and regulatory policies;
Focussing on projects that have robust project economics with considerable headroom and therefore have
high potential to generate positive cash flow in the short-term following operational success and which are
capable of creating assets suitable for alternative monetisation through near-term trade sales to peer
companies and consumers of energy;
Addressing projects in countries that have higher ESG potential where the Company can make a real and
sustainable difference;
Ensuring that management is enabled and incentivised to maintain its high profile in the investment
community which has resulted in ten successful over-subscribed Placings since 2018 whilst operating and
maintaining an undiluted equity interest in the Company’s portfolio of material projects. This was achieved
against the backdrop of financial markets impacted by BREXIT, COVID, Climate Change Activism, inflationary
pressures generated by the Energy Crisis and the Ukraine-Russia and Red Sea conflicts.
Geological risk mitigation has been enacted through screening suitable projects for the Company’s portfolio
and through showing flexibility and creativity in overcoming operational hurdles and subsurface issues using
management’s extensive and relevant industry experience. This expertise and know-how is essential to the
Company’s business development strategy as it allows the Company to move to secure assets and
opportunities that have been historically over-looked and under-valued. Management’s creative and
innovative thinking facilitates the development of those assets selected for the Company’s portfolio.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
7
Group Strategic Report
The directors have voluntarily disclosed the Group Strategic Report for the year ended 31 December 2023
although this is not required under Jersey regulations.
Principal activity
Fair review of strategy and business model – (Strategy report on previous pages)
Morocco
The extension of the Initial Period of the Guercif Petroleum Agreement by a further 9 months allowed the
Company to advance a drilling programme scheduled for the First Extension Period thereby upon successful
execution satisfying all drilling commitments for the First Extension Period. It also facilitated the rollover of the
current bank guarantee in favour of ONHYM without the requirement to increase the amount.
MOU-2 was drilled to 1,260 metres Measured Depth before being suspended for operational reasons on 23
January 2023. It is a target for possible re-entry following an evaluation of the MOU-3 and MOU-4 drilling
performances.
The well was logged down to 1010.87 metres depth.
Below the logged interval a gross interval of 165 metres was penetrated with up to 100 metres of variable
quality sand based on mud log descriptions and a gamma log acquired whilst drilling. Drilling breaks
encountered whilst drilling were linked to potential reservoir development.
Three gas samples were collected in isotubes whilst drilling at 525.5, 630 and 674 metres Measured Depth.
MOU-3 was drilled to 1,509 metres Measured Depth and completed for rigless testing.
Over-pressured gas was unexpectedly encountered in an 11 metre-thick sand from 339 to 350 metres
Measured Depth with a 3% formation gas show.
Further formation gas shows were encountered in sands at 449 metres (1.0%), 509 metres (1.35%), 555 metres
(1.51%), 751 metres (2.42%), 817 metres (2.46%), and 841 metres (3.0%) and isotube gas samples were
collected for later analysis.
All these intervals were within a four-way dip-closed structure with a Mid-Case area of 6.28km² increasing to
16 km² with depth and a High Case closure, that links MOU-1 and relies on fault seals, of 21 km² following post-
well seismic mapping.
The “Moulouya Fan” primary target was encountered between 1378 and 1437 metres measured depth with
approximately 50.5 metres of gross sand interval of very variable quality, due to complex mineralogy, versus
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
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a pre-drill P50 expectation of 19 metres. A formation gas show of 0.95% was encountered at 1395 metres
drilling depth and an isotube gas sample was collected.
Several additional zones of interest, including TGB-4 and TGB-2 secondary target equivalents, were
encountered whilst drilling but which may be subject to formation damage caused by heavy mud weights.
Log interpretation through these intervals is ambiguous with NuTech petrophysics indicating possible gas pay
beyond the formation damage.
MOU-3 reached its planned total depth of 1,509 metres Measured Depth on 21 June 2023. Wireline logs were
acquired for the interval from 725 to 1509 metres depth.
NuTech wireline log analysis and reservoir
characterisation of the MOU-3 well highlighted 43 metres to be possible gas sands impacted potentially by
formation damage.
The well was completed for rigless testing.
MOU-3 successfully satisfied several key pre-drill objectives.
• It de-risked gas charge thereby creating the framework for re-evaluating other prospective structures
adjacent to these migration pathways with potential Jurassic and Tertiary reservoirs;
• It verified the integrity of the MOU-3 hydrocarbon trap at multiple levels and enhanced the case for
significant shallow gas potential, which had been under-estimated pre-drill;
• It helped to de-risk, subject to the rigless testing results, the “Proof of Concept” for the minimum
volume and likely gas flow rates required to initiate a CNG development;
• subject to rigless testing results, MOU-3 validated that the reservoir distribution over multiple levels
is ideally suited to the scalable CNG development concept focussed on transporting gas by road and
not relying on large-scale capital investment in fixed pipeline infrastructure.
MOU-4 was drilled to 1,199 metres Measured Depth and completed for rigless testing.
MOU-4 was drilled and completed for rigless testing on 8 July 2023. It was intended to test a pre-drill shallow
three-way dip closure across a stratigraphic pinchout of the Moulouya Fan at the basin margin.
From 532 to 590 metres measured depth MOU-4 unexpectedly encountered a thick low resistivity sand
interval, possibly equivalent to the M1 Sand seen in MOU-1 and MOU-3, with very small gas peaks slightly
above background gas. NuTech petrophysical log analysis indicated potential gas saturations, although
formation damage was also suspected.
The primary target the Moulouya Fan was encountered between 862 and 883 metres measured depth with
approximately 21 metres of higher resistivity gross sand of variable quality due to the same complex
mineralogy as seen in MOU-3. Gas peaks were potentially suppressed as a result of the heavy mud weights
used whilst drilling this formation and the consequential occurrence of possible formation damage.
NuTech petrophysical reservoir characterisation of this interval indicates higher porosities and calculated
permeabilities and higher gas saturations compared to the equivalent interval in MOU-3.
Post-well seismic remapping and wireline log correlation has confirmed that MOU-3 and MOU-4 penetrated a
potential stratigraphic trap for the Moulouya Fan covering 68 km², with MOU-4 testing the crest of the seismic
anomaly 516 metres higher than at MOU-3.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
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An additional zones of interest, a highly porous and permeable volcanic ash, was encountered above the
Moulouya Fan between 779 and 809 metres measured depth whilst drilling but which may also be subject to
formation damage. NuTech petrophysics indicated possible gas pay beyond the formation damage.
The well achieved its secondary objective by penetrating a pre-drill seismic reflector at 1135 metres measured
depth interpreted as defining the edge of the Jurassic carbonate prospect located to the east of the MOU-4
location. NuTech petrophysical reservoir characterisation indicated the presence of a thin porous and
permeable reservoir, however potential formation damage is also suspected for this interval. The new post-
drill well tie to the seismic data validated the pre-drill Jurassic prospect and increased the area of structural
closure from 126 to 177 km².
MOU-4 reached a total depth of 1,199 metres Measured Depth. Wireline logs were acquired for the interval
from 460 to 1186.7 metres depth.
The well was completed for rigless well testing to investigate the potential formation damage.
MOU-4 successfully satisfied several key pre-drill objectives.
• It established the presence and continuity of the Moulouya Fan to facilitate the re-mapping of an
increased area of a potential stratigraphic closure of 68 km² ;
• It achieved its objective of defining the edge of the Jurassic carbonate prospect which, following post-
well seismic remapping, generated a 40% increase in pre-drill structural closure to 177 km²;
• It encountered a thin zone with good reservoir potential in a carbonate interval correlated with the
base of the carbonate target in the mapped prospect updip from MOU-4;
• It penetrated intervals interpreted as being candidates for rigless testing with Sandjet to address
uncertainty in the NuTech petrophysical interpretation caused by possible formation damage whilst
drilling over-balanced.
The 2023 drilling programme addressed a key business development objective as follows:
• To reduce Morocco’s CO2 emissions during the Energy Transition by exploring successfully for
indigenous natural gas resources to replace more carbon-intensive fuel oil and coal.
Successful completion of the drilling programme has allowed the Company to enter into the signing of a
Memorandum of Understanding in relation to gas sales and collaboration for up to 50 million cubic feet of
gas per day (50 mm cf/d) with Afriquia Gaz.
An Environmental Impact Assessment was commissioned to facilitate the drilling of up to three discretionary
wells to evaluate the Jurassic carbonate prospect; the shallow potential gas sands behind well casing in MOU-
3; and to appraise the extension to the southwest of the Ma/TGB-6 and possible TGB-4 gas sands penetrated
in MOU-3.
29 Tertiary, Jurassic and Triassic prospects and leads have now been identified within the area of the Guercif
Licence.
Trinidad
The Company completed all confirmatory due diligence on T-Rex Resources Trinidad Limited (“T-Rex”) and the
Cory Moruga Exploration and Production Licence and entered into a fully termed long-form legal
documentation with Challenger Energy Group Plc (“CEG”) to acquire the entire issued share capital of T-Rex
subject to regulatory approvals and consents.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
10
On 7 November 2023 the acquisition of T-Rex and an 83.8% interest in and operatorship of the Cory Moruga
Exploration and Production Licence was completed following receipt of agreements from the Trinidadian
Ministry of Energy and Energy Industries (“MEEI”).
As a consequence of negotiations associated with securing those agreements, the Company and CEG agreed
to vary certain of the terms of the previously announced agreement between them, as follows:
• On completion, the Company paid to CEG US$1 million;
• A further US$1 million, due to be paid by the Company to CEG 6 months after Completion, was instead
paid by the Company direct to the MEEI, in part agreed settlement of past dues on the Cory Moruga
licence; and
• A contingent US$1 million payable by the Company to CEG in the event of the Cory Moruga field achieving
certain future production benchmarks, and the Company granting to CEG a future back-in right to a 25%
interest in the Cory Moruga field at an uplifted multiple of cost base, would no longer apply, reflective of
CEG’s contribution to the value of settlement of the balance of past dues on the Cory Moruga licence,
which by agreement will be recovered by MEEI via agreed quarterly, which are deductible against
Petroleum Profit Tax and supplemental petroleum tax.
Collaboration with MEEI and Historical Outstanding Financial Obligations (“HOFO”).
• MEEI and the Company have jointly agreed to work collaboratively together with a shared common goal
of developing and realising new oil production from Cory Moruga.
• Under the Letter Agreement in Relation to Various Outstanding Matters Regarding the Moruga Block
Exploration and Production Licence dated 27 August 2007 (the “Agreement”) the MEEI calculated the
HOFO incurred by previous operators to be US$4,192,690.
• It was agreed with the MEEI that this will be satisfied by a payment of US$ 1 million to the MEEI by the
Company on Completion together with a quarterly arrears payment of 7.5% of gross revenue derived from
the sale of all production on Cory Moruga up to 250 bopd and 12.5% of gross revenue derived from the
sale of all production on Cory Moruga above 250 bopd until the balance outstanding of US$3,192,690 of
the HOFO is recovered by the MEEI.
Through these negotiations with the MEEI there is now commercial alignment and a common objective of
accelerating the production from Cory Moruga at the earliest opportunity.
For the avoidance of doubt there is an element of risk-sharing in that if production is not achieved then the
HOFO liability falls away.
In parallel with completion of the acquisition of T-Rex, all historical differences, and disputes between the
Company and CEG in relation to the Inniss-Trinity pilot CO2 EOR Project have been completely and amicably
resolved pursuant to the terms of the of the Settlement Agreement between the Company and CEG.
Consequently, the outstanding loan to FRAM Exploration Trinidad Limited (“FRAM”) has been settled with the
acquisition of T-Rex and an 83.8% interest in the Cory Moruga Exploration and Production Licence which
includes the Snowcap oil discovery and several separate legacy wells which have been produced in the past.
The Initial Work Programme agreed by the Company with the MEEI will be conducted over the next three years
effective from the date of acquisition of T-Rex and will include:
• Re-entering Snowcap-1 to bring the Herrera #8 Sand back onto production;
• Reprocessing, subject to the availability of seismic field tapes, the existing 3D seismic on Cory Moruga;
and
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
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• Drilling an appraisal/exploration well to test all eight Herrera reservoir intervals (Herrera #1 to #8
Sands) that produced in the adjoining ex-BP and Shell Moruga West field and several of which had
tested oil in Rochard-1 drilled in 1955.
Snowcap-1 and Snowcap-2ST1
• Snowcap-1 was originally tested by Parex Resources at 550 bopd with 4.5 MMcf/day of associated
gas, with no formation water. The Snowcap-1 test waxed off downhole during the test with the test
tool recovered covered in wax.
• The well produced 3,277 barrels of oil.
• Snowcap-2ST-1 also encountered oil-bearing Herrera Sands but testing operations were performed
at the time were inconclusive due to operational issues.
• Planning activity to begin well workovers has started with a target for production to re-commence at
the earliest opportunity in 2024 if all operations are successfully executed.
• Additional opportunities for well workovers, including Jacobin-1, RD-6, RD-7 and Green Hermit-1
wells, have been reviewed.
• Preparations to set up an office in Trinidad for T-Rex were progressed along with initiating the
administrative processes and filing requirements necessary to re-establish T-Rex as an operator.
• A site inspection of the Company’s CO2 EOR equipment inventory at its secure storage facility in
Trinidad has been carried out.
• A schedule to progress planning activities for the future execution of well workovers, appraisal
drilling and ultimately the submission of a new Snowcap Field Development Plan (“FDP”) was being
developed at the end of 2023.
An updated Independent Technical Report and resources for the Snowcap hydrocarbon discoveries by
Scorpion Geoscience Limited was commissioned and was nearing completion at the end of 2023. This is
showing significant Contingent and Prospective Resources net to the Company’s 83.8% interest, based on an
Outset FDP and production profile modelled on the adjoining Moruga West field, which has been producing
for over 60 years.
The acquisition of T-Rex achieved key business development strategic objectives as follows:
• to take direct equity interests in existing licences with not only the opportunity to carry out CO2 EOR
but also the ability to add value through further development of discovered hydrocarbon resources;
• to meet the longer-term objective of reducing CO2 emissions in Trinidad by establishing subsurface
sites for possible CO2 storage aligned to the MEEI’s draft policy to create Carbon Capture and Storage.
Ireland
In 2023 the Company concentrated its efforts on addressing its application for a successor authorisation for
Corrib South.
Following an unsolicited approach in relation to Corrib South from a potential strategic partner of substance
correspondence has been exchanged between the Company and the Geoscience Regulation Office (“GSRO”)
of the Department of the Environment, Climate and Communications (“DECC”). This represents a positive
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development but should not be construed as indicating that an award of a successor authorisation for Corrib
South will be forthcoming.
The Company has however been subsequently informed by the GSRO that consideration of its application for
a successor authorisation to Licensing Option 16/26 Corrib South is hoped to be concluded during Q1 2024
and that the GSRO would be writing to the Company shortly in relation to this matter.
The Company’s strategy is to exercise patience and to ensure that our applications for successor authorisations
remain under active consideration until such time that the argument for security and diversity of gas supply
and the protection of strategic infrastructure for the Energy Transition becomes overwhelming.
Corrib South has significant potential prospective gas resources that in a success case could be monetised
through the Corrib infrastructure to preserve its longevity and assist with the transition to a blended natural
gas and hydrogen storage facility.
The Company presented its alternative gas import option, the Mag Mell Floating Storage and Regassification
Project (“Mag Mell”), at the National Energy Summit in Dublin in April 2022. A “White Paper” was issued and
circulated to politicians and all significant stakeholders in the energy sector in Ireland. It demonstrated how
gas was needed to seasonally support the national electricity grid when renewable energy was curtailed by
weather conditions. This was followed up by lobbying members of the Irish Dail in a series of one-to-one
meetings.
The Company received confirmation from the Minister’s Office at the DECC that all options were currently
being considered from the perspective of energy security, sustainability and affordability under a “Review of
the Security of Energy Supply of Ireland’s Electricity and Natural Gas Systems for the period to 2030”.
The continuing engagement with the DECC and the branding and ownership of the Mag Mell gas import
concept is aligned with the Company’s strategic objectives:
• to take direct equity interests in licences with the potential to hold significant gas prospects that may
following exploration success, contribute to security of Energy Supply during the Energy Transition;
• to seek out gas opportunities that are located adjacent to infrastructure with increasingly spare
capacity throughput;
• to promote security of Energy Supply by providing alternative gas import options (Mag Mell) utilising
existing infrastructure and creating opportunities for subsurface blended gas and hydrogen storage;
• to continue to engage with infrastructure owners to explore the options for monetisation of assets if
and when a decision by the regulatory authorities is announced regarding future licensing of the
Company’s projects.
Equity funding
The Company successfully completed an oversubscribed £10 million Placing (before expenses) in 2023,
following the approval by the FCA of a Prospectus, that allowed it to be fully funded for its firm work
commitments and liabilities until at least the end of 2024. This followed on from four earlier Placings and
equity raises in 2023 totalling £4,250,377 (before expenses) that provided additional working capital including
to purchase long lead items for the drilling of MOU-4.
A new Competent Person’s Report (“CPR”) for Morocco and Ireland was produced for the Prospectus in June
2023 by Tracs International Limited (“Tracs”).
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Contingent resources, based solely on the MOU-1 2021 drilling results for a “Proof of Concept” CNG pilot
development only, were in the range 13.12 to 53.38 BCF (2C an 3C respectively) net to the Company.
Prospective resources for CNG growth prior to the drilling and completion for rigless well testing of MOU-3,
and excluding the area subsequently drilled by MOU-4, were in the range 48.56 to 179.07 BCF (Mid Case and
High Case respectively) net to the Company.
An updated Independent Technical Report and resources for Morocco by Scorpion Geoscience Limited was
commissioned and was nearing completion at the end of 2023. This is expected to show a significant increase
in Contingent Resources following integration of the MOU-3 an MOU-4 drilling results and will additionally
include for the first time Prospective Resources for the Jurassic carbonate target.
The Tracs CPR gave Contingent and Prospective resources (Mid and High Case) for Ram Head and Corrib South,
that are the subject of the applications to the GSRO at the DECC for successor authorisations, in the range
64.35 to 175.2 BCF and 300.95 to 1,034.8 BCF respectively. The resource estimates are significant for the
Company in the event that either one or both of the applications for successor authorisations are successful.
Ram Head represents the largest undeveloped gas field in Ireland and the only near-term opportunity to
address security of energy supply based on potentially new and material indigenous gas resources. This can
potentially be used to leverage an M & A transaction with an existing infrastructure owner.
The Placings addressed key business development strategic objectives as follows:
• maintaining undiluted project equity during the critical phase of adding material value and contingent
gas resources through exploration success;
• focussing capital resources on only projects where near-term monetisation is a realistic goal and can
be achieved within the constraints of a modest capital outlay;
• directing capital towards those jurisdictions where the Company’s business development strategy is
aligned with current government and regulatory policies;
• focussing on projects that have robust project economics with considerable headroom and therefore
have high potential to generate positive cash flow in the short-term following operational success.
Financial review
The Company reported an operating loss for the period to 31 December 2023 of GBP 4,815,985 (GBP2,558,844
for the period to 31 December 2022). The increase in operating loss is primarily attributable to the increase in
drilling activities in 2023 in Morocco which is deemed vital to adding potential gas resources and ultimately
creating shareholder value.
Operating expenses for the period to 31 December 2023 were GBP 4,765,203 (GBP 2,545,789 for the period
to 31 December 2022). Excluding share-based payments for options and warrants corporate, administrative
expenses were GBP 3,224,722 (GBP1,297,705) for the period to 31 December 2022). Administrative expenses
for the period to 31 December 2023 were GBP 3,224,722 (GBP 2,545,789 for the period to 31 December 2022).
Excluding share-based payments for options and warrants corporate administrative expenses were GBP
1,540,481 (GBP1,248,084 for the period to 31 December 2022). Corporate administrative expenses have been
prudently managed despite inflationary pressures during 2023 despite the significant increase in corporate
activities which included Project Allosaurus costs of £217,241 related to progressing a Secondary Prospectus
with the FCA.
Executive directors’ fees have increased to GBP 604,506 (GBP414,709 for the period to 31 December 2022) as
a result of the significant increase in the Company’s corporate and operational activities in the period to 31
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December 2023 to maintain business growth potential. This increase is mainly attributable to technical services
consulting fees charged by the executive directors in providing technical support and reports that would
otherwise would have been outsourced to third parties at competitive market rates.
Share options have been awarded to incentivise directors.
The Company is finishing the reporting period with cash reserves of GBP 6,484,033 (GBP3,323,161 for the
period to 31 December 2022) and restricted cash of USD1,500,000 (USD1,500,000 for the period ended 31
December 2022) in the form of the security deposit for the Guercif Bank Guarantee in favour of ONHYM. Cash
reserves have increased as a result of disciplined cash management and the Placings executed during the year
in the equities market despite investor uncertainty generated by the Ukraine-Russia war and the Cost of Living
Crisis. The Company’s portfolio of assets and experienced management team continues to attract the support
of the investor community.
The balance outstanding of the loan made by the Company to FRAM Exploration Trinidad Ltd. (“FRAM”) for
the investment in the Inniss-Trinity Pilot CO2 EOR Project was GBP NIL (GBP 659,504 the period to 31
December 2022) at the end of the period. In 2023 the Company announced that it had completed the
acquisition (the “Acquisition”) of the entire issued share capital of T-Rex, a wholly owned subsidiary of
Challenger Energy Group Plc (“CEG”). FRAM is also a wholly owned subsidiary of CEG. T-Rex holds an 83.8% in
the Cory Moruga Exploration and Production Licence containing the Snowcap-1 oil discovery. The Acquisition
was for a gross consideration (“Gross Consideration”) that included USD1,000,000 payable to CEG in cash and
allowed for the offset of the outstanding FRAM Loan balance against the agreed Gross Consideration. The Cory
Moruga Independent Technical Report and resource potential of the Snowcap-1 discovery by Scorpion
Geoscience Limited gives 2C and 3C Contingent Resources of 1.40 and 1.84 million barrels respectively and 2C
and 3C Prospective Resources of 12.91 and 19.57 million barrels respectively net to the Company. The
Company through the Acquisition has acquired TT $323,652,447 (US $ 47,948,510 @ a forex rate of 6.75) of T-
Rex tax losses as of 2022 that can be offset against 50% Petroleum Profit Tax on future net operating profits
from oil production in the Cory Moruga Exploration and Production License.
£142,500 and £217,877 (before expenses) has been raised through two placings by issuing 2,500,000 and
3,822,410 new ordinary shares at a placing price of £0.057 and £0.057 respectively.
£10 million (before expenses) has been raised through a placing at the time of the submission of a Secondary
Prospectus to the FCA by issuing 90,909,090 new ordinary shares at a placing price of £0.11.
1,000,000, 15,710,972 and 3,401,077 share options have been exercised at a price of £0.05, £0.08 and £0.10
respectively to raise £1,646,986 by the issue of 20,112,049 new ordinary shares.
1,875,000 and 160,714 broker warrants have been exercised at £0.04 and £0.028 respectively to raise £79,500
by the issue of 2,035,714 new ordinary shares.
6,401,077, 15,710,972 and 6,000,000 share options have been issued exercisable at £0.10, £0.08 and £0.125
respectively.
8,318,182, 1,080,000, 2,181,818 and 1.780,412 broker warrants have been issued exercisable at £0.11, £0.055
and £0.057 respectively.
2,659,574 new ordinary shares were issued to the executive directors for no Consideration in accordance with
the Executive Directors’ Bonus arrangements established by the independent Remuneration Committee.
Related party transactions comprised Executive Directors’ loans advanced through the sale by Novum
Securities Limited of 22,189,580 existing shares at £0.055 to raise £1,230,427; 18,000,000 existing shares at
£0.105 to raise £1,890,000; and 15,710,972 and 3,401,077 exercised share options at £0.08 and £0.10
respectively and sold at £0.057, resulting in a loan of £507,999 from the Executive Directors to the Company.
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45,189,580 new ordinary shares were issued to Paul Griffiths, Executive Director, under his Stock Lending
Agreement with the Company to satisfy in full his outstanding director’s loan to the Company.
The remaining directors’ loans of £507,999 were capitalised and linked to a repayment in full upon the
Company flowing a minimum of 1 million cubic feet/day from the rigless testing programme to be executed
in the Guercif Licence or from the flow of a minimum of 100 bopd from the well workovers planned for the
Cory Moruga Exploration and Production Licence.
As a result of the transactions successfully concluded during the period under review, the Company is well-
capitalised for initial drilling operations, free of debt and is in a position to deploy prudent levels of
administrative expenditure focussed on enhancing and promoting the potential of the Company’s portfolio.
Placing funds and Executive Directors’ loans also provided the working capital to facilitate funding the
Company’s well planning and part-funding the drilling operations in Morocco to avoid an expensive
demobilisation and re-mobilisation of Star Valley Rig 101.
The Company had no debt or outstanding directors’ loans as of 31 December 2023.
Following the admission of the above exercised share options and warrants, bonus shares, returned Loan
Shares and the Placing Shares the issued share capital increased to 565,161,662 by the end of the period to 31
December 2023 (383,759,189 for the period ended 31 December 2022).
COVID pandemic, Energy Crisis and Volatility in the Foreign Exchange Markets
The Company took all commensurate steps during the period under review to minimise unnecessary capital
expenditures and operating costs in the event that COVID restrictions might be re-imposed at some future
date. The Energy Crisis is impacting the industry’s business operations worldwide as a result of rising inflation
and rising costs, particularly transport and shipping, in respect of well services and well inventory. The
Company’s management has managed this situation through continuing to apply negotiating skills to reduce
costs and by eliminating unnecessary expenditures. As a result, our actual drilling costs averaged per well for
MOU-2, MOU-3 and MOU-4 in 2023 remain in line with our final 2021 MOU-1 drilling costs.
A resurgence of COVID would be manageable based on the lessons learnt, experience gathered and changes
to operating procedures made and capital deployment enacted during COVID-19.
Maintaining adequate cash reserves and delivering a high impact drilling programme in Morocco focussed on
the opportunity to supply gas to the Moroccan industrial market is a prudent risk-reward proposition for our
shareholders. Reducing expenditures in the first half of 2023 in Trinidad and Ireland was also necessary in
order to focus resources on delivering this key value proposition in Morocco for shareholders. This does not
reduce the Company’s strategic and competitive advantages either in Trinidad for CO2 EOR operations based
on our practical experience, expertise and technical database, nor in Ireland, where the Company currently
offers a viable gas storage project and a FSRU LNG gas import option together with an opportunity to increase
the longevity of the Corrib gas field infrastructure. Continuing with demonstrating the capability of delivering
CO2 sequestration using CO2 EOR technology in Trinidad is an important contribution to helping to reduce
CO2 emissions during the Energy Transition. These strategic objectives are allowing the Company to
demonstrate to potential partners and investors its ability to perform and create exciting business
development opportunities compatible with the requirements for an effective Energy Transition. This is even
more important to demonstrate now after the onset of the Energy Crisis and the realisation of the practical
requirement for a planned Energy Transition. An “Energy Price Shock” can re-occur at any time due to regional
political instability as is being experienced in Ukraine and the Middle East. This has an inevitable negative
impact on the stability of the supply chain for the free movement of specialist oil field equipment, oil and gas.
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Inflationary pressure on well services and equipment is reduced by astute management of operations by an
experienced management team with a network of extensive industry contacts. Rising inflation is balanced by
the rising cost of energy (oil and gas). The Company is focussed on near-term production and cash generation
in Trinidad and Morocco in order to capture the cycle of higher commodity prices during the early stages of
the Energy Transition.
Volatility in the foreign exchange markets is being managed by maintaining cash reserves in a variety of
currencies including United States Dollars, United Kingdom Pounds and Moroccan Dirhams to reflect the
principal currencies in which its costs are incurred. The Company seeks to focus on the potential to generate
revenues in United States Dollars, which has traditionally been a more stable currency for business. Any future
oil production in Trinidad is priced against West Texas Intermediate spot price. Any future gas production in
Morocco is based on the price of gas being tied to the United States Dollar. Payments in local currencies are
therefore protected to some extent and foreign exchange controls allow the conversion to the equivalent
United States Dollars to be made for repatriation of funds to the parent Company’s country of corporate
domicile.
The implementation of windfall taxes in Trinidad and Morocco in the oil and gas sector is considered to be very
unlikely. Trinidad already has a Supplementary Petroleum Profit Tax and further taxation would greatly reduce
levels of investment required to bolster oil production in Trinidad’s depleting onshore oil fields and would also
deter the roll out of CO2 sequestration linked to the aftermath of CO2 EOR activities. Morocco’s seeks to
develop gas to replace carbon-intensive coal-fired power generation. Investment would be compromised if
windfall taxes were introduced and would be contrary to Morocco’s low taxation policy for the oil and gas
sector.
Growing challenges facing the expansion of wind energy in Europe in 2024 have been highlighted. For this
reason, gas remains a critical component of the energy mix through the Energy Transition for years to come.
Board changes
There were no board changes during 2023.
The Audit and Remuneration Committees comprise both of the two non-executive directors Alistair Jury and
Carl Kindinger.
Environmental, Social and Governance (“ESG”) and Sustainability
Environmental Policy
Protection of the environment and robust environmental management are of primary importance to the board
of the Company. It is essential that the Company conducts its operations in such a manner as to minimise the
potential impact on the environment from our activities.
Our key goals are to:
• provide the necessary resources in the form of finance, equipment, personnel, training and time to
implement our policy and to further develop and actively promote our environmental and bio-
diversity commitments.
• Identify and evaluate and manage environmental aspects and associated risks applying a
precautionary approach using best industry practices without compromising safety.
• Apply a mitigation hierarchy when identifying environmental control measures, from avoidance,
mitigation and restoration, to the offset of residual impacts.
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• Consider opportunities for bio-diversity net gain by having a positive ecological impact through
habitat creation or enhancement.
• Comply with applicable environmental laws, regulations and standards of the countries in which we
operate.
• Engage with local communities and call upon community knowledge of the local environment to assist
in protecting and conserving ec0-systems and environmental resources.
• Incorporate pollution prevention in our project planning and actively work to reduce and minimise
the greenhouse gas emissions and carbon intensity of our projects from the conception phase
onwards.
• Promote efficiency in our use of energy and water with the aim of conserving natural resources and
reducing atmospheric emissions.
• Operate in a safe manner to avoid spills, leaks or accidental discharges of polluting materials.
• Ensure that an effective response capability is in place and regularly tested, so that environmental
incidents can be responded to a timely and effective manner should they occur.
• Identify and work towards environmental objectives and targets that are regularly reviewed and
reported on to promote continual improvement against those targets and objectives.
• Ensure that contractors are aware of and comply with our environmental policies and standards and
where necessary work with our contractors to raise standards to meet our requirements.
• Use our leverage and influence with business partners to promote high standards of environmental
management.
• Where appropriate support local conservation projects.
• Ensure that environmental accidents, incidents, near misses and non-compliances are reported
promptly and investigated, that corrective and preventive actions are implemented and that the
lessons learned are shared.
• Monitor and evaluate our own and contractor competence and capabilities, and conduct periodic
audits to ensure our controls are effective and that our environmental standards are being achieved;
and
• Report openly on our environmental performance and the status of our environmental objectives and
targets.
Our policy will be reviewed at least annually.
Social Policy
Contribution to the societies in which we work is of primary importance to the Board of the Company. It is
essential that the Company conducts its operations in such a way as to minimise the potential impact from our
activities and deliver positive outcomes in the communities in which we operate.
Our goals are as follows:
• Provide the necessary resources in the form of finance, equipment, personnel, training and time to
implement our policy and to further develop and actively promote our social commitments through
visible leadership.
• Comply with applicable social laws, regulations and good international industry practice.
• Ensure that all potential adverse social impacts are identified, assessed and avoided and when they
cannot be avoided, minimise or duly compensated. Avoid or minimise any requirements for physical
or economic displacement resulting from our projects. Develop appropriate mitigation, compensation
and resettlement plans for loss of assets.
• Avoid causing or contributing to adverse human rights impacts and take all feasible steps so that our
operations are not directly linked through our business relationships to adverse impacts on human
rights.
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• Establish suitable platforms to share or requisite information regarding our operations with different
stakeholders, including local communities, and promote dialogue and constructive engagement.
• Devise and implement transparent and fair grievance mechanisms for the communities in which we
operate. Ensure that grievances are recorded, investigated and responded to in a timely manner.
• Honour internationally accepted labour standards as defined by the International Labour
Organisation, ensuring non-discriminatory and equal opportunity employment practices.
• Engage with local communities, their representatives and other stakeholders to support projects and
initiatives and benefit the communities and countries in which we operate.
• Strive to preserve cultural heritage in every jurisdiction in which we operate and manage all impacts,
where they occur, in close consultation with national cultural heritage specialists.
• Support and respect the rights of indigenous communities within the scope of our operations.
• Manage the social, health, environmental and economic impacts associated with project related
influx of people.
• Use our leverage and influence with business partners to promote high standards of social
performance; ensure that contractors are aware of and comply with our social policies and standards
and, where necessary, work with our contractors to raise their standards to meet our requirements;
and
• Identify and work towards social performance objectives and targets that are regularly reviewed to
promote continual improvements.
Our policy will be reviewed at least annually.
The Company has a commitment to sustainable operations through placing robust management of ESG
concerns at the core of what we do and how we work.
ESG is an important consideration in the growth of our business and is based on both expanding the pragmatic
role of gas as a “sustainable” source of energy for reducing CO2 emissions, future collaboration with renewable
energy project developers if and where appropriate, and the utilisation of existing infrastructure and
subsurface reservoirs for cost-effective CO2 sequestration. Through this strategy we can determine a common
route to achieve a timely and socially just, fair and equitable energy transition.
Currently 100% of our assets are focussed on either gas, which has a much lower carbon intensity compared
to oil, or CO2 EOR, where sequestration of anthropogenic CO2 can be shown to be safe and effective and can
result in a net reduction in CO2 emissions after using CO2 from industrial plants currently venting CO2 into the
atmosphere.
United Nations Sustainable Development Goals (“UN SDGS”)
The Company adopts industry best practices focussed in particular on the United Nations Sustainable
Development Goals (“UN SDGS”) as a benchmark and guiding principle.
Two of the UN SDGs are particularly relevant to the countries in which we operate a business and these
underpin our strategy and values as we seek to develop our business in the context of the Energy Transition.
Goal 7: Ensure access to affordable, reliable, sustainable modern energy for all – specifically around energy
efficiency and advanced and cleaner fossil-fuel technology expansion of infrastructure and upgrade technology
for supplying modern and sustainable energy services for developing countries in accordance with their
respective programmes of support.
In Morocco we are focussed on developing a Compressed Natural Gas market that will make energy more
affordable for industries that currently used imported, more carbon-intensive fuel oil. This will allow these
industries to retrofit natural gas versus fuel oil burners, particularly the ceramics industry, to reduce CO2
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emissions and potentially become more competitive with respect to the European market. In turn this may
stimulate business growth and create additional employment.
Developing the CNG option creates a source of natural gas that can be easily transported by CNG-fuelled trucks
to regional and local distribution centres which would allow the expansion and upgrade of energy services by
creating the energy security required for heavy transport vehicles currently using more carbon-intensive diesel
to switch to CNG.
Developing any future large accumulations of natural gas will help replace very carbon-intensive coal imports
currently used to generate significant amounts of power in Morocco. This will create employment; improve
gas distribution infrastructure bringing gas to a greater number of cities and towns; and improve energy
security and the economy by eliminating costly energy imports.
In Trinidad our CO2 EOR knowledge and expertise can be applied at the right time to the development of the
Snowcap discovery in the Cory Moruga Exploration and Production Licence. This will evaluate and provide the
empirical data necessary to determine the potential storage capacity for CO2 sequestration of the Cory
Moruga reservoirs in line with the government of Trinidad and Tobago’s draft policy to implement its Action
Plan for the mitigation of Green House Gases (“GHG”) aimed at cutting CO2 emissions by 15% by 31 December
2030 (equivalent to 103 MtCO2e) for which a draft policy to create Carbon Capture and Storage (“CCS”) specific
legislation has been developed.
Establishing the CO2 storage capacity at Cory Moruga can provide critical data with which to justify investment
in CO2 pipeline infrastructure to capture CO2 that is currently being vented into the atmosphere.
The Company is the only company in Trinidad that has established “Proof of Concept” for CO2 sequestration
in oil reservoirs following its successful Inniss-Trinity CO2 EOR pilot project in 2021.
The second of the UN SDGs that is particularly relevant to the countries in which we operate a business and
which underpins our strategy and values as we seek to develop our business in the context of the Energy
Transition is:
Goal 9: To build resilient infrastructure, promote inclusive and sustainable industrialisation and foster
innovation. Raise industry’s share of employment and gross domestic product, in line with national
circumstances. Upgrade infrastructure and retrofit industries to make them sustainable with increase
resource-use efficiency and greater adoption of clean and environmentally sound technologies and industries.
The new and innovative CNG and CO2 EOR, leading to CO2 storage, businesses we seek to develop in Morocco
and Trinidad respectively are aligned with Goal 9 in establishing businesses that are innovative; improve
infrastructure; increase employment opportunities; and addresses increase resource-use efficiency.
Operating responsibly with a focus on continuous improvement
We acknowledge the potential ESG impacts that our activities may have as we develop our projects. Our team
is committed to proactively identifying and assessing issues that are important to our business and to our
stakeholders. We manage these and their associated risks and seek to minimise the impacts of our activities
as far as possible by putting robust frameworks in place.
In addition, we are building our ESG capacity by appointing an ESG manager to oversee site-level
environmental and socio-economic interaction.
In recognition of the importance of stakeholders, external impacts and risks the Company has undertaken to
review its Materiality Assessment in line with the Global Reporting Initiative (”GRI”) framework; Greenhouse
Gas emissions and climate adaption, resilience and energy transition are the two most material issues for the
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Company followed closely by safety and security considerations, land access and community benefits. These
issues have been linked to the Sustainable Development Goals which are guiding project development and
implementation.
These issues are set out in the GRI and will provide the basis for review and reporting going forward.
Topic 11.1 GHG emissions.
In 2023 the Company completed two wells for rigless testing. Wells were completed to the very highest
standards (see below) with the latest wellhead equipment to minimise any risk of methane leakage.
Topic 11.2 Climate adaption, resilience and transition.
1. Management periodically considers the effects of climate-change and climate-related risks.
The principal risk identified is the potential for increased and more severe short-lived seasonal
floods impacting the Moulouya river that passes through the northwest part of the Guercif licence
area.
This is mitigated for by choosing well locations that are not within the immediate floodplain of the
Moulouya river.
Should permanent facilities be established consideration will be given to constructing a low relief
flood defence wall.
2. Climate-related risks currently do not influence, or will potentially influence, the Company’s
business model, including our supply chain.
3. Before executing any oil and gas operations that involve the movement of equipment and personnel
onto a site the Company completes an independent Environmental Impact Assessment that has to
be published for local consultation and approved by the local civil authorities in Morocco and
Trinidad. Climate related risks relevant to the Company's financial reporting objective are identified
following this consultation process and if any risk is identified it is mitigated against by
implementing a plan that directly addresses the perceived risk.
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Currently no climate risks have been identified that impact the Company’s operations or business
development strategies. risks identified are addressed.
4. The Company, which is still at a pre-revenue generating stage, has identified no climate related
disclosures for inclusion in the financial statements.
5. The Company currently operates in Morocco and Trinidad and has no plans to enter other
jurisdictions. The governments of Morocco and Trinidad recognise the importance of their oil and gas
sectors to their respective economies. The Company currently cannot identify climate change and any
climate change risks as having any impact on its financial statements. Periodic reviews of climate
change risks are undertaken if and when new information becomes available.
Topic 11.8 Asset integrity and critical incident management.
The Company’s management collectively have over 100 years relevant oil and gas operations experience,
including operating onshore and offshore wells and pre-development planning.
Asset integrity and critical incident management is a key area of focus for the Company.
Prior to carrying out all field operations an HSE manual is produced which sets out procedures to address
any issues arising from a range of possible critical incident, some of which potentially could impact asset
integrity.
Operations are directly supervised by management on a day-to-day basis.
Topic 11.16 and 11.17 Land and resource rights and rights of indigenous peoples.
The Company always engages with the owners of the land that it intends to carry out field operations on
prior to the commencement of those operations.
Appropriate compensation is paid where it is necessary to construct civil works, including a well pad and
access roads, that may result in inconvenience and an alternative use of the land. The intention is always
to return the land to its original state.
Consultation with olive tree farmers is carried out to ensure that valuable water resources are not
compromised by any of the Company’s operations.
Local communities provide the security guards (currently 10) that protect our well sites and storage
facilities from unauthorised access.
Improvement of the local tracks (see below) is welcomed by the community and olive tree growers as it
provides improved quality of access for them to essential services and amenities.
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Topic 11.9 Occupational health and safety.
All of the Company’s personnel and contractor staff are briefed on health and safety aspects of the
Company’s operations prior to the commencement of activities in accordance with the guidelines presented
to the relevant local authorities and government regulators.
Topic 11.11 Non-discrimination and equal opportunity.
Gender and ethnic diversity is important to the Company.
Key project manager positions in the area of planning of drilling operations and ESG are filled by women.
All positions in-country, including country manager, director of local subsidiaries and operational logistics, are
filled by indigenous personnel.
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For the year ended 31 December 2023
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Topic 11.14 and 11.15 Economic impacts and local communities.
In 2023 the Company spent 25,855,427 Dirhams in Morocco on local services in relation to the drilling of
three wells, MOU-2, MOU-3 and MOU-4 in the area of the Guercif Petroleum Agreement 10 kilometers
northwest of Guercif city.
Beneficiaries included civil engineering contractors; field support activities including provision and
mobilisation of cabins; provision of Guercif warehouse staff (renting of warehouse in Guercif city); provision
of water and waste disposal; fuel supplies; transport and drivers; local hotel accommodation for rig and well
services crews; heavy lifting equipment; internet services and provision of office equipment; and accounting
and customs administration services. This was a significant boost for the local economy.
Topic 11-3 Air emissions.
The Company operates a business development strategy based on a virtual office concept, thereby reducing
the carbon footprint associated with a fixed office facility by reducing energy consumption and waste.
Initial evaluation of sites for potential future operations uses as far as possible drone technology to reduce
the carbon footprint on the ground.
Topic 11-5, 11.6 and 11.4 Waste, water and effluents and biodiversity.
Conservation of the environment is very important to the Company.
Waste disposal is carried out using local approved contractors to protect the environment and ensure a clean
operations site at all times (see below).
Land use is restored after mud pits required during the drilling operations are filled in (see below).
Water disposal is free of effluents in accordance with standards laid down by the pre-drill Environmental
Impact Assessment.
Natural vegetation is re-established in these areas within one year (see below) and potentially over time may
or may not contribute to improving biodiversity in an otherwise barren landscape.
Topic 11-20 Anti-corruption.
The Company adopts a zero tolerance policy towards bribery and corruption in whatever form.
In 2021 the Company sought advice from the Financial Conduct Authority (“FCA”) on a specific issued related
to the public markets.
The Company were subsequently recently informed that the FCA concluded that it was not in the public
interest to pursue the matter.
We believe it is in the public interest to make this disclosure.
Topic 11-21 Payment to governments.
ONHYM personnel are given access to the Company’s well site operations for promoting skills and competency
through training, on-the-job experience and opportunities. The Company pays annual training fees to ONHYM
as is a requirement under the Guercif Petroleum Agreement and Moroccan Hydrocarbon Code. ONHYM is a
State-owned company.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
24
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
25
Post period events
12 January 2024
The Company announced that
further to the announcement of 7 November 2023 in respect of the acquisition
of T-Rex Resources (Trinidad) Limited (“T-Rex”), the Company was publishing an Independent
Technical Report (“ITR”) by Scorpion Geoscience Ltd. for the Cory Moruga block and resource potential of the
Snowcap Discovery.
A preliminary Base Case 15-year production profile was compared with that for the adjoining former BP and
Shell Moruga West field and uses only the P90 oil resources (9.13 million barrels of oil recoverable) contained
in the ITR. It assumes 14 new production wells and a peak scoping gross production rate of 3,500 bopd are
assumed.
Project economics indicate at WTI US$76/barrel spot price the gross undiscounted operating profit based on
the proposed FDP is US$202.12 million. NPV @10% is US$ 85.14 million and IRR is 240.9%. Undiscounted net-
back is US$19.61 per barrel of oil.
The Company also announced an update on the rigless testing programme for the Guercif Licence. Phase 1
rigless testing using conventional perforating guns would test four zones in MOU- 1 and MOU-3. Phase 2 rigless
testing using Sandjet perforating technology would test multiple zones in MOU-1, MOU-2 and MOU-3.
26 January 2024
The Company announced that it had published an Independent Technical Report (“ITR”) by Scorpion
Geoscience Ltd. for the Guercif block and resource potential of the Moulouya Sub-Area following an evaluation
of the 2023 drilling programme results.
The possible range of 2C and 3C recoverable resources allowed for a scoping CNG gas profile of 20 mm cf/day
to be maintained for 6 years to recover a gross volume of 43.8 BCF based on a minimum of 4 production wells.
Based on this profile the ITR gave, using a flat industrial gas market price of US$12 per mcf, an unrisked scoping
NPV@10% of US$108 million and an IRR of 138% with undiscounted positive cash revenues of US$ 207.504
million for the net Predator economic interest, equivalent to an unrisked and undiscounted US$6.345 million
per BCF of CNG production.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
26
The Company also announced that it had received since its last operations update a communication from the
GeoScience Regulation Office (“GSRO”) at the Department of the Environment, Climate and Communications
informing the Company that consideration of its application for a successor authorisation to Licensing Option
16/26 Corrib South is hoped to be concluded during Q1 2024 and that the GSRO would be writing to the
Company shortly in relation to this matter.
26 January 2024
The Company announced
that the commencement of the rigless testing programmes was expected to occur
on or about 29 January 2024.
The testing programme was forecast to last for up to 14 days.
5 February 2024
The Company announced
that it had signed an extension to the Company’s 2022 rig contract for the use of
the Star Valley Rig 101.
The extension will facilitate, subject to regulatory approvals and consent, the drilling of the MOU-5 well to
evaluate the 177km² Jurassic structural closure.
MOU-5 is expected to be drilled between 1 April to 31 May 2024.
The Company is fully funded to drill MOU-5 using currently uncommitted, discretionary, cash on the
Company’s balance sheet.
20 February 2024
The Company announced the results of the Phase 1 rigless testing programme, using conventional but under-
sized perforating guns that were the only option at the time, which was designed to confirm the extent and
minimum depth of potential formation damage,
The information was critical for designing the Phase 2 Sandjet programme, including perforating parameters,
and for evaluating additional potential reservoir intervals interpreted by NuTech but where conventional
wireline logs were potentially impacted by deep invasion of drilling mud into these intervals.
It was recognised that the perforating guns were likely to be under-sized but a third-party analysis indicated a
maximum 12” penetration into the reservoir formation versus their interpreted zone of formation damage for
the TGB-2 Sand in MOU-1 of 8”.
All four zones in MOU-1 and MOU-3 to be tested were perforated and operations were completed on 19
February 2024. For all four zones tested the under-sized 111/16” perforating guns failed to penetrate beyond
the zone of formation damage caused by the necessity to use heavy drilling muds whilst drilling.
Seven gas samples collected in isotubes in MOU-3 whilst drilling at measured depths of 446, 508, 555, 750,
817, 846 and 1395 metres Measured Depth were analysed by Applied Petroleum Technology (UK) Ltd. (“APT”)
in Oslo. Gas composition is in the range 98.04 to 99.57% methane, making it ideal for a Compressed Natural
Gas development with minimum processing. Isotope analysis indicates the gas is biogenic in origin.
The results of the Phase 1 rigless testing programme allows the design parameters for the Sandjet testing
programme to be set with a higher degree of confidence in relation to achieving key objectives as follows:
• to penetrate sufficiently beyond the formation damage: and
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
27
• to perforate multiple potential reservoir zones recognised by NuTech but for which conventional wireline
logs may be adversely impacted by invasion of drilling mud.
The Sandjet rigless well testing programmes for MOU-1, MOU-3 and MOU-4 will be finalised and thereafter
Sandjet will be mobilised to carry out the testing operations.
The Company also announced that it would continue to progress planning activities for the drilling of the MOU-
5 well to test a large Jurassic structure updip from MOU-4.
Summary
In 2023 the Company has focussed on completing a multi-well drilling programme in the northwest part of its
Guercif Licence onshore Morocco. Drilling results are unlocking the gas potential, first established by the
Company’s 2021 well MOU-1, of this overlooked basin in northern Morocco.
An extensive rigless well testing programme, including using Sandjet, has been put together to evaluate
multiple reservoir intervals that were encountered within a depth interval of 339 to 1435 metres measured
depth in MOU-1, MOU-3 and MOU-4. MOU-2 was suspended for operational reasons pending a later possible
re-entry and deepening of the well.
Independent estimates of Contingent gas resources for MOU-1 and pre-drill Prospective gas resources for
MOU-3 and MOU-4 support the Company’s preferred “Proof of Concept” development option to supply
Compressed Natural Gas by road to the Moroccan industrial market.
Robust project economics due to low development costs, high gas prices and minimal taxation and royalties
illustrate the potential for near-term positive cash flow for the Company.
The signing of a Collaboration Agreement for gas sales with Afriquia Gaz was a significant step in establishing
the wider recognition of the achievements of the Company in developing the gas potential of the Guercif Basin
and the presence of larger structures capable of hosting material gas resources.
The Company has satisfied all its commitments for the Initial Period of the Guercif Petroleum Agreement and
its drilling commitment for the First Extension of the Initial Period.
The Initial Period is being extended to 5 June 2024 to allow rigless testing to be competed and the results
analysed. It will also facilitate the drilling of the Jurassic target covering 177km², the edge of which was
established in MOU-4.
The Company has maintained its strategy of not farming out project equity at the early stages of exploration
and appraisal, preferring to maximise value through drilling success first.
In Trinidad we have executed our M & A strategy by acquiring T-Rex Resources Trinidad Ltd. via a Share
Purchase Agreement. This preserves US$ 47,948,510 of tax losses that can be offset against 50% Petroleum
Profit Tax.
T-Rex owns and operates an 83.8% interest in the undeveloped Snowcap oil field in the Cory Moruga
Exploration and Production Licence. The Company is committed to a work programme over the next 3 years
of well workovers and an appraisal well. Implementation of CO2 EOR will be considered as an option at a later
date.
Technical due diligence performed by the Company on the Snowcap asset has confirmed the potential for
significant Contingent and Prospective oil resources. The Company believes it can add value by running
additional wireline logs in existing wells and then to apply improved petrophysical analysis in combination with
Sandjet perforating technology to better target the zones of potential oil-bearing sands and then to apply wax
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
28
treatments for the oil through chemical injection to improve the levels of flow assurance from the Snowcap
reservoirs.
The Company also benefits from its extensive subsurface knowledge and understanding of the production
history of the adjoining Moruga West field. Initial technical work confirms that the Moruga West field extends
into the Cory Moruga Exploration and Production Licence where several legacy wells at the licence boundary
with Moruga West indicate the potential for several missed oil pays that were not drained by the Moruga West
development and producing wells. Later in their potential production history these wells may form the basis
for implementing CO2 EOR prior to a larger programme being developed for the latter stages of production
from the Snowcap field.
Cory Moruga represents an opportunity for the Company to re-set the commercial model for revenue
generation onshore Trinidad.
We continue to maintain a position offshore Ireland on the basis that sentiment may change in 2024 as security
of energy supply and the cost of living crisis become election issues for voters.
Corrib South and Ram Head contain material Prospective and Contingent resources that are potentially of
value to owners of Ireland’s gas infrastructure as spare capacity develops further and the need for indigenous
gas outweighs a reliance of imported gas.
During the period under review we have taken the opportunity, when possible and advisable to do so, to raise
funds in the public markets. This allows us to maintain undiluted project equity at a stage when the risk versus
reward ratio is changing significantly in our favour as we methodically build on de-risking our assets.
On behalf of the Board, I would like to thank our shareholders for their patience and continued support of the
Company through what has been an extremely active and busy year.
Given the continuing unsettled outlook for the global economy due to inflationary pressures and political
conflict in key regions that impact security of energy supply, the Company must remain vigilant and also retain
the opportunity at the right time to monetise assets if an attractive divestment opportunity presents itself in
line with the independent valuation of our assets. Shareholders in the current climate are quite rightly looking
for early returns on their investments. Management is aligned with shareholders in this respect in their
capacity of cornerstone backers of the Company’s strategic objectives.
Key Performance Indicators
At this stage in the Group’s development, the Directors do not consider that standard industry key performance
indicators are relevant.
During 2023 the Company has successfully completed a multi-well drilling programme onshore Morocco in
the Guercif Licence which has led to the independent confirmation of significant Contingent gas resources
necessary to implement the Company’s strategy of developing CNG for the Moroccan industrial market. This,
if successfully executed, will reduce the reliance on more carbon-intensive fuel oil.
In Trinidad the Company has successfully completed the acquisition of T-Rex and its associated tax losses to
gain operatorship of an 83.8% interest in the Cory Moruga Exploration and Production Licence which contains
the undeveloped Snowcap oil discoveries. The Consideration paid to Challenger Energy Group Plc (”CEG”) for
the acquisition of P50 Prospective and Contingent resources represented US$0.14 per barrel made up of US$
one million paid to CEG and a one-off cash payment of US$ one million paid to the MEEI to address legacy
liabilities accrued by previous operators. This M & A transaction has added new and material Contingent and
Prospective resources for a very low acquisition price. The acquisition also provides the Company with a future
opportunity to perform CO2 EOR that potentially may lead to the creation of subsurface storage required by
the MEEI’s draft policy to create Carbon Capture and Storage. The Cory Moruga Exploration and Production
Licence was granted directly by the MEEI and is not an Incremental Production Services Contract (“IPSC”) with
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
29
Heritage. This gives the Company direct operatorship and control of its work programmes and strategy for
development of the assets.
The main KPI’s for 2023 are therefore considered to be the following:
• Conservation and prudent deployment of cash to acquire Contingent and Prospective resources at a
very large discount to their forecast value based on independent project economics.
• Execution of the longer term strategy to contribute to reducing CO2 emissions through replacing the
use of more carbon-intensive fossil fuels with natural gas during the Energy Transition and acquiring
sites that potentially can be used for subsurface storage of currently vented CO2.
• Improving ESG and Sustainability in relation to the Group’s operations.
• Expanding total prospective, probable and proven resources through drilling activity and acquisitions.
• Develop oil and gas projects which will result in positive cash flow within a short time horizon.
This measures our ability to assist the internal funding of our projects with medium term time
horizons. This is demonstrated by our proposed Compressed Natural Gas development option for
discovered gas in Guercif to support early monetisation of gas and to significantly reduce the quantum
of development capital required, and our acquisition of the 83.8% interest in the Cory Moruga
Exploration and Production Licence where a strategy of workovers of existing wells for low capital
expenditure is forecast to generate positive cash flow.
• Enter into value adding joint venture and farm-out transactions.
This measures our ability to mitigate risk, share capital expenditure with partners and assist in
meeting licence commitments.
Currently this strategy is being applied to the Company’s assets offshore Ireland, which are considered
to be exposed to a greater risk of regulatory delays. The Company has been approached by an
infrastructure owner regarding its application for a successor authorisation for Corrib South.
The Company has also been approached by several companies regarding its gas assets in Morocco,
but at this time the Company wishes to defer entering into any substantive negotiations until it has
advanced a Field Development Plan, believing that this will underpin valuations.
• Secure funding that minimises, as far as market conditions allow, project equity dilution to maintain
materiality, cognisant of the potential for a judicious level of debt funding. This measures our ability
to enhance shareholder value whilst securing the means to grow the business without unduly
increasing risk.
No third-party debt has been incurred during the reporting year and an adequate quantum of equity
funding has been secured to maintain sufficient working capital as we seek to transition to a revenue-
generating Group through a period of rising commodity prices.
Shareholders’ interests are best protected by establishing sufficient liquidity to support going concern
criteria during periods of volatile global market conditions.
The above objectives have been achieved in 2023.
• The rate of utilisation of the Group’s cash resources. This measures our ability to plan expenditure
and conserve cash to ensure a going concern and is addressed by reducing corporate costs and
operating costs whenever and wherever prudent to do so, without impacting the timely execution of
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
30
the Group’s business development strategy, and by not entering into any discretionary new
commitments and liabilities.
This has been successfully achieved in 2023.
The Group has achieved its performance targets during the reporting year by increasing liquidity, adding the
Cory Moruga asset in Trinidad and successfully executing a drilling programme for gas in Morocco preparing
to drill the MOU-2 well in Morocco without project dilution, without incurring any new firm financial liabilities
and within budget forecasts.
Group structure and list of assets
Licence/Agreement Issued Asset Operator Partners PRD% Status
ONSHORE
MOROCCO
Guercif Petroleum
Agreement
2019¹ Moulouya
Gas discovery
PGVL ONHYM 75 Appraisal
Gas
ONSHORE TRINIDAD
Cory Moruga
E & P Licence
2023 Snowcap POGT
T-Rex
TOUCHSTONE
Exploration
83.8 Oil field
Appraisal
OFFSHORE IRELAND
Atlantic Margin
LO 16/26 2016² Corrib South POGVL Theseus Ltd. 50 Exploration
Gas
North Celtic Sea
LO 16/30 2016² Ram Head POGVL Theseus Ltd. 50 Exploration
& appraisal
Gas
FSRU Project Concept No licence Mag Mell
FSRU
MMEIL None 100 LNG
import
¹ Initial Period of the Guercif Petroleum Agreement being extended to 5 June 2024
² A Frontier Exploration Licence for Corrib South and a Standard Exploration Licence for Ram Head is conditional
on the award of successor authorisations that have been applied for and remain under consideration by the
Department of the Environment, Climate and Communications
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
31
Description of assets
Onshore Morocco – Guercif Petroleum Agreement (“Guercif PA”)
Background to the Guercif Project
The Guercif Petroleum Agreement (“Guercif PA”), comprising the Guercif Permits I, II, III and IV located in the
Guercif Basin in northern Morocco, covers an area of 7,269 km². It lies approximately 250 km due east of and
on trend with the geologically coeval Rharb Basin, where shallow commercial gas production has been
established by SDX Energy Plc and its predecessor Circle Oil for several years. Guercif also lies approximately
180 km due north-west of Tendrara, where deep gas is being appraised and potentially developed by Sound
Energy Plc.
Map showing the Guercif Block in grey in relation to current Moroccan exploration permitting and relation to
analogue basins such as the Rharb Basin, Tendrara development and Anchois.
Through its wholly owned subsidiary Predator Gas Ventures Ltd. (“PGVL”), the Company holds a 75% working
interest in and is the operator of the Guercif PA. ONHYM, the State oil company, holds 25% and is carried
through exploration, but funds its pro-rata share of all costs upon a Declaration of Commerciality. ONHYM is
owned by the Moroccan government and is involved in oil and gas exploration, appraisal, development and
production within Morocco.
The Guercif PA is for 8 years and is split into an Initial Period of 30 months, commencing on 19
th
March 2019;
a First Extension Period of 36 months duration; and a Second Extension Period also of 30 months. After each
Licence Period there is an opportunity to withdraw from the Licence, without entering the next Licence Period.
A one year extension to the Initial Period of 30 months of the Guercif Petroleum Agreement was granted as a
consequence of the restrictions that resulted from the COVID pandemic. As a result, the Guercif Petroleum
Agreement was extended for 9 instead of 8 years. The Initial Period was extended to 42 months to 5 August
2023.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
32
In 2023 the Company extended the Initial Period by a further 9 months to 51 months to 5 February 2024 to
allow acceleration of the one well commitment planned for the First Extension Period to facilitate it being
drilled in the Initial Period whilst a drilling rig was available on site. This would remove the drilling commitment
from the First Extension Period and eliminate the requirement to put up a new bank guarantee in favour of
ONHYM prior to entering the First Extension Period. The Company also reduced its drilling depth commitment
from 2,000 metres Measured Depth to 1,500 metres Measured Depth or top Middle Jurassic, whichever
occurred first but committed to drilling two wells to this depth. The First Extension Period was reduced from
36 to 27 months. Successful conclusions of these extensions allowed the Company to cost-effectively
rationalise drilling expenditures and to reduce potential wastage in resources and finances.
At the end of 2023 a further extension of the Initial Period by four months to 5 June 2024 to allow for two
phases of rigless testing of MOU-1, MOU-3 and MOU-4 to be completed and the results evaluated was awaiting
a Joint Ministerial Order to become effective. The First Extension Period would then be reduced from 36 to 23
months.
In the Initial Period the work programme comprises 250 kilometres of 2D seismic reprocessing and AVO
analysis and the drilling of one exploration well to a minimum depth of 2,000 metres or to the top of the
Jurassic, whichever occurs first. Desk-top geological and gas marketing studies will also be carried out. The
Minimum Exploration Commitment is USD3,458,000, which has been satisfied by the work programmes
carried out to date by the Company.
By the end of the year under review the Company had completed its 2D seismic reprocessing commitment and
drilling commitments, based on the revised commitment depth of 1,500 metres Measured Depth, for the Initial
Period and First Extension Period (accelerated drilling in Initial Period) as follows:
MOU-1 drilled to 1,503 metres Measured Depth
MOU-3 drilled to 1,509 metres Measured Depth
MOU-4 drilled to 1,199 metres Measured Depth to Lower Jurassic
MOU-2 was drilled to 1,260 metres Measured Depth before being suspended for operational reasons for a
potential re-entry following a review of the results of the MOU-3 and MOU-4 drilling performance.
If re-entered MOU-2 could potentially be leveraged to replace the 200 km² of 3D seismic commitment in the
First extension Period.
Fiscal terms and commercial opportunity.
The fiscal terms in Morocco, which are some of the best in the World, are restricted to a 5% State royalty for
gas, applicable after the first 10.6 BCF of net production to the operator, and corporation tax charged at 31%.
However, there is a 10-year “holiday” before corporation tax will be charged and any unused tax losses can be
offset against the tax due. There are no signature bonuses but production bonuses in the form of cash
payments exist with a maximum one-off payment of USD5,000,000 on production greater than 30,000
BOE/day. A commercial discovery bonus of USD1,000,000 is also payable. Significantly each individual gas field
which is the subject of an Exploitation Concession can be fiscally ring-fenced. Award of an Exploitation
Concession is not dependent upon fulfilling the work programme for the exploration phases of the Guercif PA.
The highest gas prices in Morocco are paid by industrial users, substituting for expensive carbon intensive fuel
oil imports, and ranged from USD 10 – 12/mcf during 2023. It is this market that the Company will initially
target with trucked Compressed Natural Gas (“CNG”), which by substitution of more fuel oil can potentially
reduce CO2 emissions by up to 33%.
The Guercif licence area straddles the Maghreb gas pipeline to Europe, which also serves Morocco’s current
inventory of gas-fired power plants. A major highway, suitable for the transport of Compressed Natural Gas
(“CNG”) also links Guercif to Morocco’s major industrial centres. Guercif is therefore well-positioned relative
to infrastructure for the potential early monetisation of gas.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
33
Gas infrastructure map Northern Morocco
MOU-2 pre-drill location in foreground of highway to industrial centres
History of exploration in Guercif
Guercif has been very lightly explored with only 4 deep exploration wells drilled by Elf in 1972 (GRF-1), Phillips
in 1979 (TAF-1X), ONAREP (the forerunner of ONHYM) in 1985 and 1986 (MSD-1 and KDH-1) and 2 shallow
stratigraphic wells drilled by BRPM for coal exploration in the 1950s.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
34
TransAtlantic re-entered, logged and tested the MSD-1 well, originally drilled in 1985, in 2008 but the logging
and testing failed to establish the presence of hydrocarbons in the Jurassic.
The seismic inventory includes 3,291 kilometres of 2D seismic data acquired between 1968 and 2003, including
a new 300-kilometre ONAREP 2D seismic survey acquired in 2003, which were reprocessed in 2006 by
TransAtlantic when Pre-Stack Time Migration was applied for the first time to the seismic inventory.
TransAtlantic also acquired an aeromagnetic and aerogravity survey in 2006, comprising 10,000 line
kilometres.
Historical exploration focus was entirely on the Jurassic and was completed before the shift in emphasis took
place that resulted in shallow (Tertiary) gas production in the Rharb Basin and successful deep (Triassic) gas
appraisal drilling at Tendrara.
In this context therefore Guercif has been over-looked and has never attracted new exploration to evaluate
the Tertiary targets encountered in the gas producing Rharb Basin and the offshore gas discovery wells
Anchois-1 and -2. New academic research (Capella et. al. 2017) confirmed for the first time the geological
continuity of the section containing the producing Miocene (equivalent to the Tortonian Hoot and Guebbas
formations) gas reservoirs in Rharb Basin with geological outcrops in the Guercif Basin.
The Company’s MOU-1 exploration well, was successfully drilled and completed for rigless testing during 2021
and evaluated the north-western part of the Guercif Basin in a sub-basin that had never been previously drilled.
The well confirmed the pre-drill geological prognosis and the correlation of the primary reservoir target with
a seismic amplitude anomaly.
2023 drilling results.
MOU-2
The first well in the programme, MOU-2, was drilled in January to target an area of the “Moulouya Fan”
interpreted to potentially contain thicker reservoir sands.
The well was suspended at 1260 metres depth, above the intended primary target, due to operational issues
impacting the drilling rate. It was left in a condition to facilitate an option to re-enter following an analysis of
the drilling mud system and the future MOU-3 and MOU-4 drilling results to determine the changes that would
be required to improve drilling performance and reduce the risk of getting logging tools stuck downhole in a
particular unplanned-for geological formation. This was initially interpreted from the mud log and gamma log
acquired whilst drilling as a large-scale slump feature (see below).
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
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The well could only be logged down to 1010.87 metres depth where the logging tools could not penetrate into
the section interpreted as the slump feature.
Below the logged interval a gross interval of 165 metres was penetrated with up to 100 metres of variable
quality sand. Presence of significant thicknesses of sands not seen in MOU-1 drilled 8 kilometres to the west
in 2021 confirmed the pre-drill predictions that the area to the east offered greater potential for sand
development at the level of the “Moulouya Fan” (the “primary target”).
MOU-3
The second well in the programme, MOU-3, was drilled and completed for rigless testing in June. It tested a
shallow four-way dip closure and a deeper down-faulted closure potentially sealing against a fault at the level
of the primary target.
Within the shallow closure over-pressured gas was unexpectedly encountered in an 11 metre-thick sand from
339 to 350 metres Measured Depth with a 3% formation gas show. The interval was estimated from the mud
weight alone to be 122 psi over-pressured.
Further formation gas shows were encountered in sands at 449 metres (1.0%), 509 metres (1.35%), 555 metres
(1.51%) and 751 metres Measured Depth (2.42%). Isotube gas samples were collected from all sands with
formation gas shows for later analysis.
No provision for wireline logging had been made pre-drill for this shallow section.
Due to the unexpected presence of over-pressured shallow gas a different well design would need to be
considered and the MOU-3 well twinned to approximately 800 metres Measured Depth to safely conduct a
rigless test in this interval.
Post-well seismic re-mapping in the Mid-Case generates a closure of 6.28km² within this gross interval of 450
metres with several levels of potentially gas-bearing sands based only on mud log gas shows.
Potentially significant gas resources may be present within this shallow unlogged zone in the context of the
first phase of a potential CNG development option.
Deeper within the shallow structural closure the “Ma and TGB-6” sands were encountered from 815 to 895
metres Measured Depth with formation gas show of 2.06% at 817 and 3.0% at 841 metres Measured Depth.
Five potential sands with higher background gas were present. Individual sands have a maximum thickness of
3 metres giving an estimated cumulative thickness of 11.5 metres versus a P10 pre-drill forecast sand thickness
of 10 metres. Isotube gas samples were collected from all sands with formation gas shows for later analysis.
Post-drill seismic re-mapping of the Ma/TGB-6 structure tested by MOU-3 indicates that the structure may
persist several kilometres to the southwest towards the MOU-1 well drilled in 2021, where formation gas
shows and gas was interpreted in the Ma and TGB-6 sands. Mid-Case four-way dip closure is mapped as 16
km² with a High Case that links in MOU-1 and relies on fault seals of 21 km².
Several thin sands up to one metre thick were encountered between 1046 and 1140 metres Measured Depth.
The upper sands are interpreted as being the TGB-4 sands. A seismic tie to the MOU-3 wireline logs correlates
this interval with stronger seismic amplitudes related to a poorly constrained four-way dip closure and a larger
fault-bounded closure. NuTech petrophysical log analysis of this interval indicates gas saturations in the range
33 to 51% with maximum porosities and calculated permeabilities of 34.6% and 106.5 mD respectively. Mud
log descriptions over this interval interpret the presence of “unconsolidated sands”. Gamma log indicates the
presence of highly layered feldspathic sands. MOU-3 was drilled significantly over-balanced with a mud weight
of 1.47 SG at total depth to help try to maintain borehole integrity in the highly mobile claystones in an interval
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
36
above this horizon. Formation damage is therefore expected as a result of deep invasion of drilling mud and
uncontrolled expansion of the borehole diameter. Under these circumstances gas saturations may have been
suppressed. Rigless testing using Sandjet perforating technology is being assessed as a means of penetrating
beyond the formation damage to help potentially validate the NuTech petrophysical interpretation.
A potential equivalent of the gas-bearing TGB-2 sands seen in MOU-1 was encountered in MOU-3 between
1243 to 1248 metres Measured Depth. The interval had similar characteristics to the TGB-4 sands above.
NuTech petrophysics calculated a maximum porosity of 35.1% and a maximum permeability of 119.86 mD with
a maximum gas saturation of 54%. This interval is also being assessed as a possible candidate for Sandjet
rigless testing.
The “Moulouya Fan” target was encountered between 1378 and 1437 metres Measured Depth with
approximately 50.5 metres of gross sand interval of very variable quality versus a pre-drill P50 expectation of
19 metres.
Elevated background gas readings were recorded whilst drilling this section and a formation gas show of 0.95%
was encountered at 1395 metres drilling depth. An isotube gas sample for later analysis was collected.
Reservoir characterisation is more problematic as the interval contains a significant amount of volcanic
material due to the nature of the sand source area to the east. NuTech calculated gas saturations are extremely
variable, sometimes over 50%, reflecting the potential for significant layering within the gross reservoir
interval. Desk-top petrographic and mineralogical studies have been commissioned to better understand
reservoir quality. Rigless Sandjet testing is being allowed for to further evaluate this interval.
The Moulouya Fan interval penetrated by MOU-3 is defined by a sequence of strong seismic events covering a
maximum area of 68 km² following post-well seismic re-mapping. The potential for a large stratigraphic trap
exists, as the gross reservoir interval is encased above and below by sealing claystones, within which there are
separate fault compartments.
Small-scale faulting in the shallow section above the Moulouya Fan creates numerous tapping possibilities for
shallow gas.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
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The extent of the Moulouya Fan is defined by an interval thickness map (see below).
In summary, MOU-3 reached its planned total depth of 1,509 metres Measured Depth on 21 June 2023.
Wireline logs were acquired for the interval from 725 to 1509 metres depth.
NuTech wireline log analysis and
reservoir characterisation of the MOU-3 well highlighted 43 metres of possible gas sands. The well was
completed for rigless testing using both conventional perforating guns for estimating depth of potential
formation damage and the Sandjet water jet perforating technology widely used in the United States – Phase
1 and Phase 2 testing programmes respectively. The primary advantage of Sandjet is that it allows deeper
penetration into potential gas reservoirs beyond the wellbore zone impacted by heavier drilling mud invasion
in circumstances where the drilling is over-balanced. It is also more cost-effective compared to conventional
perforating options using explosives where there are a number of separate reservoir sands to be evaluated for
assessing the potential to co-mingle on production.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
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MOU-4
The third well in the programme, MOU-4, was drilled and completed for rigless testing in July. It tested a pre-
drill shallow three-way dip closure across a stratigraphic pinchout of the Moulouya Fan at the basin margin.
Between 532 and 590 metres Measured Depth MOU-4 unexpectedly encountered a thick low resistivity sand
interval with very small gas peaks slightly above background gas. NuTech petrophysical log analysis indicates
porosities up to 38.6% and calculated permeabilities up to 56.82 mD with highly variable gas saturations in the
range 40 to 60%. NuTech petrophysics and the gamma log indicate a highly layered reservoir with multiple
claystone horizons and some tighter calcite- and dolomite-cemented sands. Clean sands are unconsolidated
based on the mud log well site reporting.
The post-well seismic tie and re-mapping indicates the possible presence of a three-way dip-closed truncation
trap of sands below a Plio-Quaternary unconformity sealed by claystones that also cap the overpressured
shallow gas zone in MOU-3. This section potentially correlates with interpreted gas sands in MOU-3 at and
above the Ma sand interval but lies within a separate potential hydrocarbon trap.
This shallow zone will be included in the Phase 2 Sandjet rigless testing programme to investigate the validity
of the NuTech petrophysical log analysis.
MOU-4 encountered another unexpected interval of low resistivity potential reservoir section above the
Moulouya Fan primary target between 779 and 809 metres Measured Depth. NuTech petrophysical log
analysis indicates porosities up to 36% and calculated permeabilities up to 50 mD with gas saturations up to
40%.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
39
Post-well desktop studies by PETROSTRAT have identified the presence from thin section slides of a highly
porous volcanic ash horizon that is potentially a reservoir (see below).
The potential reservoir interval has a gamma wireline log signature indicative of highly feldspathic sands with
possible volcanic components. This interval now correlates with the “slump” penetrated by MOU-2 (see
below) and is now thought to be part of an extensive volcani-clastic/ash deposit exploiting a significant
basement fault. Multiple reservoir targets maty exist in this feature some of which will be evaluated by Sandjet
rigless testing.
Data from MOU-4 has now confirmed that MOU-2 penetrated the Moulouya Fan. Several drilling breaks
suggest possible reservoir development. MOU-4 was drilled more efficiently than MOU-2 indicating that the
drilling mud issues that impacted rate of penetration had been overcome for complex geological formation
encountered in the MOU-2 “slump” interval.
Post-well seismic re-mapping confirms that the MOU-4 penetrated section has a seismic amplitude response
which allows a potential trap to be mapped contiguous with the equivalent sections in MOU-1, MOU-2 and
MOU-3.
MOU-4, as is the case for MOU-3, was drilled significantly over-balanced with the result that formation damage
may have occurred within this interval if the reservoir properties are as calculated by NuTech. This zone will
therefore also be included in the Phase 2 Sandjet rigless testing programme for further evaluation.
The primary target the Moulouya Fan was encountered between 862 and 883 metres Measured Depth with
approximately 21 metres of higher resistivity gross sand.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
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Reservoir characterisation of this interval is similar to that penetrated in MOU-3 due to the presence of
volcanic material. NuTech petrophysical analysis showed porosities up to 25.7% and calculated permeabilities
up to 65.87 mD. Gas saturations of up to 84% were interpreted by NuTech, although there is the potential for
significant layering within the gross reservoir interval. Desk-top petrographic and mineralogical studies have
been commissioned to better understand reservoir quality. Rigless Sandjet testing is being allowed for to
further evaluate this interval which may or may not be impacted by formation damage. Gas readings and rate
of penetration whilst drilling did not reflect the potential reservoir characterisation and therefore the rigless
testing programme will better assess reservoir properties.
MOU-4 reached its planned total depth of 1199 metres Measured Depth with wireline logging from 460 to
1186.7 metres Measured Depth being completed on 7 July 2023. The well also achieved its secondary objective
by penetrating a pre-drill seismic reflector at 1135 metres Measured Depth interpreted as defining the edge
of the Jurassic carbonate prospect located to the east of the MOU-4 location. The new post-drill well tie to the
seismic data validated the pre-drill Jurassic prospect culminating to the east of MOU-4. Seismic re-mapping
increased the area of structural closure from 126 to 177 km² (see below).
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
41
Reservoir characterisation of this interval by NuTech picks out two thin carbonate horizons with up to 20.6%
porosity and 26.24 mD calculated permeability with a gas saturation of up to 73%. MOU-4 is located at the
very limit of structural closure for the updip carbonate prospect.
This thin zone will be included in the Sandjet Phase 2 rigless testing programme to assess the validity of the
NuTech petrophysical analysis in the event of formation damage. The geological model for the MOU-5 updip
appraisal of the Jurassic encountered in MOU-4 is shown below.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
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Following the completion of the drilling programme and an analysis of the drilling results the Company had
sufficient encouragement to enter into the signing of a Memorandum of Understanding in relation to gas sales
and collaboration for up to 50 million cubic feet of gas per day (50 mm cf/d) with Afriquia Gaz and the granting
of a 12-month exclusivity period to negotiate a legally-binding Gas Sales Agreement. Afriquia Gaz would
purchase the gas at the wellhead and would therefore be responsible for downstream marketing and
distribution to end users.
Contingent gas resources
The Company’s Independent Technical Report (“ITR”) by Scorpion Geoscience Ltd. for the Guercif block and
resource potential of the Moulouya Sub-Area following an evaluation of the 2023 drilling programme results
provided updated Contingent and Prospective gas resources as described in Table 1 below.
Additional prospectivity
An Environmental Impact Assessment was commissioned and is nearing final approval by the regulatory
authorities to facilitate the drilling of up to three wells if and when required to evaluate the Jurassic carbonate
prospect; the shallow potential gas sands behind well casing in MOU-3; and to appraise the extension to the
southwest of the Ma/TGB-6 and possible TGB-4 gas sands penetrated in MOU-3.
26 Tertiary, Jurassic and Triassic prospects and leads have been identified within the area of the Guercif Licence
to be retained following the obligatory relinquishment of a portion of the licence area on entering the First
Extension Period of the Guercif Petroleum Agreement.
Given the high level of activity in 2023 in the Initial Period of the Guercif Petroleum Agreement, that included
advancing drilling in 2023 scheduled for the First Extension Period, it was necessary to seek regulatory
approvals first to extend the Initial Period from 5 August 2023 to 5 February 2024, and then to further extend
to 5 June 2024 to facilitate the drilling of the Jurassic prospect.
Forward Work Programme
Commence and complete rigless well testing of MOU-1, MOU-3 and MOU-4 using initially conventional
perforating guns to assess the depth of potential formation damage, and then Sandjet perforating technology
for the second phase of rigless well testing. Budgeted costs approximately US$ 1.2 million for initial rigless
testing and a further US$1 million for Sandjet testing.
Well planning for a discretionary MOU-5 well in 2024 to approximately 1,100 metres Measured Depth to test
the Jurassic carbonate target in an optimal location relative to MOU-4. Budgeted well cost currently US$3.5
million.
Subject to successful rigless testing results negotiate a Gas Sales Agreement with Afriquia Gaz for offtake of
gas at the wellhead. Apply for an Exploitation Concession.
Collaborate with Afriquia Gaz to source long lead items for a potential CNG development.
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For the year ended 31 December 2023
43
A schematic of a loading station for CNG development is shown below .
Initiate an Environmental Impact Assessment for a CNG development.
Evaluate MOU-6 and MOU-7 drilling locations to appraise western and southwestern extent of the shallow gas
fairway tested in MOU-1 and MOU-3.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
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Planned Test Programme
Contingent Resources – Gross GIIP (Gross
Unrisked Recoverable*) BCF
Economic Modelling
Phase 1 Rigless Testing P90(1C) P50(2C) P10(3C)
Early Q1
2024
MOU-1 Testing Ma
sands
14.82(9.54) 33.84(21.84) 63.04(41.20)
P50 used for
10MMScf/d 8 year
initial production
profile
P10 used for
20MMScf/d profiled
project economics over
6 years
MOU-3 Testing Ma
sands
MOU-1 Testing
TGB-2 sands
TRACS
7.32(2.93)
TRACS
29.15(17.49)
TRACS
88.96(71.18)
Phase 2 Rigless Testing
Part 1
P90(1C) P50(2C) P10(3C)
Q1 2024
MOU-3 Testing
Moulouya Fan
72.66(46.49) 152.39(98.09) 281.75(184.03)
Potential to upscale
production to
50MMScf/d for
minimum four years in
P50 success case
MOU-4 Testing
Moulouya Fan
Phase 2 Rigless Testing
Part 2
Prospective Resources – Gross GIIP (Gross
Unrisked Recoverable*) BCF
P90(1U) P50(2U) P10(3U)
Q1 2024
MOU-1, MOU-3 &
MOU-4 Testing
TGB-6 sands
NA NA NA
Resources estimations
will be generated
subject to the results
of rigless testing
MOU-3 Testing
TGB-4 Sands
NA NA NA
MOU-3 Shallow
Sands
NA NA NA
MOU-4 Porous
Volcanic Interval
NA NA NA
MOU-4 Jurassic
Dolomitised
Limestone interval
NA NA NA
Prospective Resources – Gross GIIP (Gross
Unrisked Recoverable*) BCF
Jurassic Exploration/ Appraisal P90(1U) P50(2U) P10(3U)
TBC Drill MOU-5 169.92(93.70) 426.87(186.23) 910.58(416.22)
Extension of
20MMScf/d and
50MMScf/d plateau
cases or gas to power
Contingent Resources – Gross GIIP (Gross
Unrisked Recoverable**) BCF
A Sand (Shallow) Appraisal P90(1C) P50(2C) P10(3C)
TBC Test Gas Sands 5.88(3.62) 13.42(8.29) 26.14(16.16) Subject to Appraisal**
* Multiply Gross values by 0.75 to yield net to PRD
** Additional infill drilling likely to be required after initial production period, two wells allowed for in Project Economics
Table 1
Contingent and Prospective gas resources for the Moulouya Prospects drilled by the Company in 2021 and
2023
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
45
Onshore Trinidad – Acquisition of T-Rex Resources Trinidad Limited (“T-Rex”).
Cory Moruga Exploration and Production licence history
The Cory Moruga licence is a direct licence from the Trinidadian Ministry of Energy and Energy Industries
(“MEEI”) in which Challenger Energy’s wholly owned subsidiary T-Rex Resources (Trinidad) Limited (“T-Rex”),
holds an 83.8 % interest, alongside its partner Touchstone Exploration Inc. which has 16.2% interest. T-Rex is
operator.
T-Rex acquired its interest in the Cory Moruga asset from Parex Resources who made the original Snowcap-1
oil discovery and acquired 3D seismic data over the licence from British Gas.
Cory Moruga represents a rare opportunity to explore and produce hydrocarbons from an existing discovered
but undeveloped accumulation in a low-cost onshore operating environment in the Southern Basin of Trinidad.
The undeveloped Snowcap discovery is located immediately north of the mature Moruga West field,
developed and produced by BP over many years, in a separate thrust structure at the proven Miocene aged
Herrera sands reservoir level.
Location Cory Moruga and related infrastructure
Oil has been produced on short-term test from several different sand levels in three wells associated with the
Snowcap structure: Snowap-1 (2011), Snowcap-2ST1 (2019) and Rochard-1 (1955) which is now thought to be
drilled on the western periphery of the Snowcap structure based on new 3D seismic mapping.
The uppermost H#8 sand in Snowcap-1 was tested by Parex Resources at 550 bopd with 4.5 MMcf/day of
associated gas, with no formation water during, flow test #4 from in 2 metres of perforated interval between
1401 and 1403 metres measured depth. Overpressure of up to 0.62 psi/ft was noted with short term open
choke flow rates ranging from 1,100 to 1,450 bopd and gas at a rate of 2.2 MMcf/day. Static initial surface
tubing pressure was recorded at 2516 psia, and initial static bottom hole pressure was 2761 psia. Live oil
recovered from the initial testing was found to have a sulphur content of 0.47 % and a viscosity of 0.59 cp. Live
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
46
dry oil gravity measured at 60°F was 34.5°API with wet oil measured at 34.3°API based on 0.784% measured
water content. Stock tank oil minus solution gas had an oil gravity reading of 29.5°API at 60°F and pour point
of c.55°F (12.7°C) consistent with loss of gases making it a light sweet crude suitable for export by existing
pipelines which experience typical annual night-time temperature minimums of 22 degrees Celsius.
Snowcap-1 testing and production test 2011 and 2012
On the basis of the production tests, a development plan was submitted in 2018 to the MEEI by T-Rex, prior to
Challenger Energy taking control of the asset, however, the block was not further developed. Subsequent to
the acquisition of Columbus Energy Resources PLC in 2020, Challenger Energy undertook a detailed technical
review of its Trinidad portfolio and assessed that Cory Moruga field required further appraisal before a
commercial development decision could be made.
Challenger Energy considered the Cory Moruga licence to be non-core to its cash flow generative production-
focused business in Trinidad, and therefore no further work was planned for the Snowcap field in. At the same
time, Predator considers that the Cory Moruga field represents an ideal candidate for a future CO
2
EOR project.
The Herrera #8 sand (“H#8”) tested in Snowcap-1 is judged on a fair and reasonable basis to represent a known
accumulation with other stacked sands (H#1-H#7) requiring additional appraisal and testing to confirm the
extent of producible hydrocarbons. There is also the potential for stacked low resistivity missed pay intervals
in existing wells on the block e.g. Jacobin-1, RD-6 and RD-7, within the northwestern extension of the Moruga
West field into the Cory Moruga licence area, and Green Hermit-1 to the north of the Snowcap field. Applying
Sandjet perforating technology may provide an opportunity to add significant future project value with
substantial efficiency savings compared with conventional perforation and testing methods.
Fiscal terms and commercial opportunity
Gross Revenue Production x Price (world price corrected for transport, offset)
Operating Costs Fixed and Variable
Royalty 12.5% of Gross Revenue
Supplemental Petroleum Tax 18% of Gross Revenue minus Royalty – applied above WTI
$70/bo
Petroleum Production Levy 4% of Gross Revenue if production above 3,500 BOPD
Green Fund Levy 0.1% of Gross Revenue
Annual Payments Includes surface, training, scholarship fund
Petroleum Profit Tax 50% of taxable income
Unemployment Levy 5% of taxable Income
Capital Allowances
Tangible Capital 36% in year 1 and then 16% for the next 4 years
of the original balance.
Intangible Capital 10% in year 1 and then 20% of remaining
balance in years 2-5
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
47
Significant unrealised tax losses of US$47,948,510 exist in TRex with 75% of these allowable each year for
offset against annual profits.
The combinations of unrealised tax losses and the potential for high productivity wells to reduce fixed
operating costs pro-rata for a barrel of oil production given the near-virgin field reservoir pressure and the
added potential to apply miscible CO2 EOR in the future makes for an attractive commercial proposition.
2023 Activity
• A re-entry and work-over of Snowcap-1 with isolation of water influx from a deeper sand interval and
with a wax treatment is being planned and designed to restore production to a predicted rate of 100
to 200 bopd based on a successful wax treatment programme and re-completion of the well.
• Perforating using Sandjet perforating technology is being assessed.
• A re-entry of Snowcap-2ST-1, which also encountered oil-bearing Herrera Sands, is being evaluated.
No resistivity log was run and only inconclusive testing operations were performed at the time (with
some oil recovered without water) due to operational issues.
• Data gathering for additional candidate wells Jacobin-1, RD-6, RD7 and Green Hermit-1 for potential
workovers and perforating using Sandjet.
• Integration of Moruga West production data to determine potential for missed oil pays in the
candidate wells for workovers.
Site visits to Trinidad have been made to:
• supervise the handover of all data pertaining to the Cory Moruga Exploration and Production Licence;
• set up an office and begin the administrative processes to elect a new Board for T-Rex, which will be
a wholly-owned subsidiary of Predator Oil & Gas Trinidad Limited;
• initiate the update of T-Rex’s operational credentials including licences and approvals to operate;
• identify in-country personnel and well services to prepare for workover operations in 2024;
• inspect the Company’s CO2 EOR equipment inventory at its secure storage facility in Trinidad;
• Initiate planning activities for scheduling for workovers, appraisal drilling and the future submission
of a new Snowcap Field Development Plan (“FDP”).
Contingent oil and gas resources
The Company’s Independent Technical Report (“ITR”) by Scorpion Geoscience Ltd. for the
Cory Moruga block
and resource potential of the Snowcap Discovery following the acquisition of T-Rex provided updated
Contingent and Prospective oil and gas resources as described in Tables 2 and 3 below.
Unrisked Volumetric
Estimation
Contingent Resources
Herrera #8 Sand
Total
Petroleum
in place
(PIIP)
MMSTB
P90 4.57
P50 5.94
PMEAN 6.01
ML 5.66
P10 7.54
P90 1.04 (1C)
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
48
Recoverable
Oil
Resources
MMSTB
P50 1.40 (2C)
PMEAN 1.42
ML 1.26
P10 1.84 (3C)
ASG BCF
P90 0.73
P50 0.98
PMEAN 0.99
ML 0.88
P10 1.29
Table 2
Volumetric estimations for Contingent Resources in the Herrera H#8 sand unit at the Snowcap Structure.
Unrisked Volumetric Estimations
Prospective Resources
Herrera #1 Herrera #2 Herrera #3 Herrera #4 Herrera #5 Herrera #6 Herrera #7
Total
Petroleum in
place (PIIP)
MMSTB
P90 9.01 4.59 2.35 1.83 4.73 5.65 6.87
P50 15.97 7.54 3.62 2.97 6.75 8.08 9.97
PMEAN 17.10 7.76 3.69 3.05 6.88 8.30 10.16
ML 14.03 6.54 3.33 2.96 6.79 7.86 9.69
P10 26.83 11.23 5.09 4.40 9.20 11.21 13.75
Recoverable
Oil Resources
MMSTB
P90 2.08 (1U) 1.07 (1U) 0.54 (1U) 0.42 (1U) 1.09 (1U) 1.31 (1U) 1.58 (1U)
P50 3.77 (2U) 1.77 (2U) 0.85 (2U) 0.69 (2U) 1.58 (2U) 1.91 (2U) 2.34 (2U)
PMEAN 4.05 1.83 0.87 0.72 1.63 1.97 2.41
ML 3.40 1.64 0.75 0.63 1.45 1.70 2.14
P10 6.37 (3U) 2.68 (3U) 1.24 (3U) 1.04 (3U) 2.22 (3U) 2.70 (3U) 3.32 (3U)
Associated
Gas BCF
P90 1.46 0.75 0.38 0.29 0.76 0.92 1.11
P50 2.64 1.24 0.60 0.48 1.11 1.34 1.64
PMEAN 2.84 1.28 0.61 0.50 1.14 1.38 1.69
ML 2.38 1.15 0.53 0.44 1.02 1.19 1.50
P10 4.46 1.88 0.87 0.73 1.55 1.89 2.32
Table 3
Volumetric estimations for Prospective Resources in the stacked Herrera sand units at the Snowcap Structure
Forward work programme
The Initial Work Programme agreed by the Company with the MEEI will be conducted over the next three years
effective from the date of acquisition of T-Rex and will include:
• Re-entering Snowcap-1 to bring the Herrera #8 Sand back onto production;
• Reprocessing, subject to the availability of seismic field tapes, the existing 3D seismic on Cory Moruga;
and
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
49
• Drilling an appraisal/exploration well to test all eight Herrera reservoir intervals (Herrera #1 to #8
Sands) that produced in the adjoining ex-BP and Shell Moruga West field and several of which had
tested oil in Rochard-1 drilled in 1955.
• A desktop study to plan for a future potential CO2 EOR project.
Offshore Ireland – Floating Storage and Regasification Unit (“FSRU”)
Background
Mag Mell Energy Ireland Ltd created in 2021 an ambitious liquid natural gas floating storage and regasification
project for the Celtic Sea with the potential to include strategic gas storage.
The project provides a unique and secure essential energy supply to Ireland in the transition period from fossil
fuel to green energy.
Located beyond the horizon the floating gas units are not visible from land and are designed to be user,
consumer and environmentally friendly.
The proposed associated subsurface storage facilities can be used to store natural gas, hydrogen or be used
for CO
2
sequestration.
What is LNG?
Liquefied Natural Gas (LNG) is natural, odourless, nontoxic and non-corrosive gas that has been cooled down
to liquid form to ensure safe storage and transport.
What is a Floating Storage and Regasification Unit (FSRU)?
After transportation to its required destination of consumption, liquefied natural gas (LNG) needs to be
brought back to its gas state (Natural gas is cooled to approximately -160°C at the source of production to
reduce its volume down to 1/600 for better transportation efficiency).
The FSRU receives, stores and warms up LNG for regasification and sends it out as high-pressure gas according
to the customer's demand.
What will the Mag Mell look like?
Providing a bridge during the energy supply transition period over the next decade, LNG Floating Storage and
Regasification units will act just like a land-based LNG terminal. Located out at sea, beyond the horizon, some
50km offshore in the vicinity of the existing (now decommissioned) Kinsale Platform, the FSRU will be
completely invisible from land.
In addition to transporting LNG, the FRSU will have the on-board capability to vaporise LNG and deliver natural
gas through the existing Kinsale Head Gas Field subsea pipeline and existing connection to the GNI grid entry
point onshore at Inch.
It is envisaged that the proposed FSRU will be permanently moored to a subsea buoy system anchored
offshore. The buoy system will be used as both the mooring mechanism for the FSRU and the conduit through
which natural gas will be delivered to the subsea pipeline.
The design for the project has focused on ensuring minimal impact on the environment relative to other energy
infrastructure projects and reducing CO
2
emissions. Compared to any other energy supply solution the
environmental impact of this operational arrangement is minimal.
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For the year ended 31 December 2023
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How does it work?
The FSRU collects its cargo at a foreign port via a port jetty facility or offshore LNG carrier located outside
Ireland’s territorial waters via flexible cryogenic hoses, in accordance with established Ship-to-Ship (STS) LNG
transfer protocols.
Two special purpose FSRU vessels designed for Celtic Sea weather and mooring conditions will shuttle between
the LNG collection point and the offshore site for regassification and injection into the subsea end of the
existing Kinsale gas pipeline to shore. This maintains maximum deliverability of gas at peak times to ensure a
secure supply of gas to the local market.
The FSRU can receive and deliver full or partial loads in order to meet the required needs of the market at any
given time subject to commercial arrangements.
Two submerged subsea buoy systems will provide mooring points and gas connections through which natural
gas will then be delivered to the subsea pipeline. The use of two buoys accommodates the FSRU vessels to
maintaining continuous gas production into a pipeline.
An FSRU vessel with mooring and loading system Source: APL Offshore
The regasification (warming) of LNG continues uninterrupted at the mooring site.
The submerged buoys are anchored to the seabed and pulled into and secured in a mating cone into the FSRU
LNG vessel. When disconnected the buoys drop clear of the FSRU LNG vessels and float submerged
approximately 30-50 meters below sea level.
By using the existing pipeline, terminal and entry point the Mag Mell project’s environmental impact will be
minimal.
LNG provides a substitution for carbon-intensive fuels - an energy option to exercise now.
LNG is a bridging fuel; its use will be reduced and the energy supply diversified.
The Mag Mell project offers near term and safe solution to Ireland’s energy requirements and security of
supply, all year round.
It will deliver energy independence for Ireland and provide a backup for renewables when the Eirgrid capacity
is not met by renewables.
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LNG can be competitively priced amidst rising energy costs if seasonal deliveries are tied to developing gas
storage capacity.
The Mag Mell project is committed to delivering on the Irish Government’s Climate Action Plan objectives.
Using existing infrastructure to accelerate the energy transition, Mag Mell provides energy with a low
environmental footprint.
In alignment with the Irish government’s policy pledge not to allow the import of LNG produced from shale
gas, the Mag Mell project will source LNG from a transparent certified origin where there is no reliance on
fracked gas feedstock.
Working in collaboration the Mag Mell project will create opportunities for CO2 and hydrogen storage.
The Mag Mell Project can satisfy 43.4% of Severe Peak Day 2027/28 gas demand.
Maintenance of energy security for Ireland within this transition period depends on the provision of a project
such as Mag Mell, providing security of supply for the national network.
Activities in 2023
During the period under review the Company has maintained the position that the Mag Mell FSRU Project
could address Ireland’s security of gas supply.
We are pleased to have confirmation from the Minister’s office that the consultation on the Review of the
Security of Energy Supply of Ireland’s Electricity and Natural Gas Systems for the period to 2030 but in the
context of a sustainable transition to 2050, closed on the 28th of October 2022 and yielded over 450
submissions from individuals and organisations. The consultation responses have been reviewed and analysed
and have provided important insights with regard to energy security risks, mitigation options and policy
measures. Quote “All options are currently being considering from the perspective of energy security,
sustainability and affordability”.
The Mag Mell FSRU Project remains an option based on the above comments and the Company has clearly
established a competitive position should there be progress on the security of supply issue in 2024.
This may acquire greater significance should there also be progress on an award of a Corrib South successor
authorisation in 2024.
Offshore Ireland – Applications for successor authorisations to Licensing Option 16/26 (“Corrib South”) and
16/30 (“Ram Head”)
Corrib South has significant potential prospective gas resources that in a success case could be monetised
through the Corrib infrastructure to preserve its longevity and assist with the transition to a blended natural
gas and hydrogen storage facility. It potentially could also be linked to a modified Mag Mell FSRU Project.
Tracs International Limited (“Tracs”) Competent Person’s Report (2023) has estimated probabilistic P50 and
P10 gas-in-place for Corrib South of 212 BCF and 606 BCF respectively for Predator’s net 50% interest.
Chance of geological success is put at 44% and chance of commercial success at 22%.
For Ram Head Tracs have estimated probabilistic P50 and P10 discovered gas-in-place of 198 BCF and 438 BCF
respectively. Probabilistic P50 and P10 Prospective gas-in-place has been determined by Tracs as 714 BCF and
1,981 BCF.
Contingent 2C and 3C gas resources net to Predator’s 50% interest are 64.35 BCF and 175.2 BCF respectively.
Chance of commercial success is 25%.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
52
Prospective Mid and High gas resources net to Predator’s 50% interest are 300.95 BCF and 1,034.8 BCF
respectively. Geological chance of success is 68% and commercial chance of success 17%.
Location maps Ram Head and Corrib South (Source: Gas Networks Ireland Network Development Plan 2020)
Correspondence has been exchanged between the Company and the Geoscience Regulation Office (“GSRO”)
of the Department of the Environment, Climate and Communications (“DECC”). This represents a positive
development but should not be construed as indicating that an award of a successor authorisation for Corrib
South will be forthcoming.
The Company has however been subsequently informed by the GSRO that consideration of its application for
a successor authorisation to Licensing Option 16/26 Corrib South is hoped to be concluded during Q1 2024
and that the GSRO would be writing to the Company shortly in relation to this matter.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
53
Forward Work Programme
The Company will continue to make submissions that will demonstrate that the FSRU LNG project can be
considered to be very much in the public interest in the context of security of energy supply.
Dialogue will be maintained with the regulatory authorities regarding the applications for successor
authorisations to the Corrib South and Ram Head licensing options.
The Company is currently not planning any third party expenditure on Ireland during 2024 and will only spend
a limited amount of management time supporting its position in relation to its applications for successor
authorisations.
Principal risks and uncertainties
Exploraon industry risks
Oil and gas drilling and operaons are speculave acvies and involve numerous operaonal risks and
substanal and uncertain costs that could adversely affect the Group. The Group is subject to a number of risks
and hazards generally, including adverse environmental condions, industrial accidents, labour disputes,
unusual or unexpected geological condions, changes in the regulatory environment and natural phenomena
such as earthquakes, inclement weather condions and floods. Such occurrences could result in damage to
mineral properes or producon facilies, personal injury or death, environmental damage to properes of
the Group or others, delays in mining, monetary losses, and possible legal liability all of which could have a
material adverse impact on the operaons and performance of the Group.
Mitigation:Where possible the Board aims to build a diversified portfolio of assets so that an adverse outcome
is mitigated by the prospects of favourable outcomes
Dependency on skilled personnel, drilling and related equipment
Oil and gas exploraon and development acvies are dependent on the availability of skilled personnel,
drilling and related equipment in the parcular areas where such acvies will be conducted. Demand for such
personnel or equipment, or access restricons may affect its availability to the Group, parcularly relevant
when taking into consideraon the Ukraine-Russia and Middle East conflicts and the connuing global
hangover of COVID-19 and the increased demand for services and personnel during the early stages of post-
COVID-19 global economic recovery. The Group may encounter compeon from other competors in
Morocco, Ireland, and Trinidad to retain experienced and reliable third-party contractors, which may adversely
impact operaons. The dependence on third-party contractors may also subject the Group to collecve
bargaining agreements by law in Morocco, Ireland, and Trinidad, as well as labour disputes which may adversely
impact its operaons.
Mitigation: Management through many years of experience has a network of independent contractors with
skilled personnel and equipment which it can access.
Oil and gas prices are highly volale
Oil and gas prices are highly volale and are driven by numerous factors beyond the control of the Group, in
parcular world demand for oil and gas as well as expectaons regarding inflaon, the financial impact of
movements in interest rates, global economic trends, and domesc and internaonal fiscal, monetary and
regulatory policy sengs. There is a risk that low prices for oil and gas may have an adverse impact on the
financial performance / valuaon of the Company and price of its Ordinary Shares.
Mitigation: By balancing projects with near-term cash inflow prospects with projects that require long-term
funding the risk is mitigated. Planning includes simulation of downside risk scenarios.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
54
Esmates may be inaccurate
Reserve and resource data and esmated discounted future net cash flows are esmates based on assumpons
that may be inaccurate and on exisng economic and operang condions that may change in the future. As a
result of these uncertaines, there can be no assurance that any drilling programmes will result in profitable
commercial operaons.
Mitigation: The Group has considerable experience in project evaluation. It may resort from time to time to
independent expert consultants to verify assumptions. The Group focusses on projects that require relatively
low capital investment but can potentially generate very high rates of return as a means of mitigating against
reduction in discounted future net profits.
The Group is dependent on the successful development of its oil and gas assets
There is no guarantee that resources will be produced, nor the amount and quality of resources that may be
produced. Fluctuaon in oil and gas prices, results of drilling and producon and the evaluaon of development
plans subsequent to the date of any esmate, may require revisions of such esmates. The quality and volume
of resources and producon rates may not be the same as ancipated at the me of investment by the
Company. Addionally, producon esmates are subject to change, and actual producon may vary materially
from such esmates. No assurance can be given that any esmates of future producon and future producon
costs with respect to any of the fields or assets underpinning the Company’s assets or interests will be achieved
which may have a material adverse impact on the performance and prospects of the Group.
Mitigation: The Group has diversified its profile away from regular oil and gas exploration by developing CO2
EOR and CO2 sequestration expertise and progressing an FSRU LNG project in Ireland.
Rigless well tesng
Rigless well tesng of MOU-1, MOU-3 and MOU-4 using convenonal perforang guns and Sandjet carries
operaonal risks such as misfiring of perforang guns and lack of penetraon of reservoirs that may have
suffered formaon damage as a result of the heavy mud used whilst drilling.
There is no guarantee that either gas will flow from the perforated reservoirs or that gas will flow at sufficient
rates and without a decline in reservoir pressure due to low connected volume of gas to the wellbore to support
a commercial development.
Mitigation: Extensive use of offset well data for the geologically analogous, gas-producing Rharb Basin and
published information from the Anchois-1 and -2 Tertiary gas discovery in the offshore is used to improve the
overall knowledge base.
Political risks
All of the Group’s operations are located in a foreign jurisdiction. As a result, the Group is subject to political,
economic and other uncertainties, including but not limited to, changes in policies, particularly in relation to
the fossil fuel industry in the context of concerns regarding climate change, or the personnel administering
them, terrorism, nationalisation, appropriation of property without fair compensation, cancellation or
modification of contract rights, foreign exchange restrictions, currency fluctuations, export quotas, royalty and
tax increases and other risks arising out of foreign governmental sovereignty over the areas in which these
operations are conducted, as well as risks of loss due to civil strife, acts of war, guerrilla activities and
insurrection.
Mitigation: The Group only conducts operations in those countries with a stable political environment and
which have established acceptable oil and gas codes. The Company adheres to all local laws and pays heed to
local customs.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
55
Licensing and tle risks
In general terms, the Group’s acvies are dependent upon the grant, renewal or connuance in force of
appropriate permits, licences, concessions, leases and regulatory consents, in parcular the exploraon and
prospecng licences, which may be valid only for a defined me period and subject to limitaons or other
condions related to operaonal acvies and in parcular, in each jurisdicon in which it operates as follows:
- The Company has completed its MOU-3 and MOU-4 drilling programmes. The drilling commitment
for the Inial Exploraon Period has therefore been sasfied in order to proceed to entering the First
Extension Period of the Guercif Petroleum Agreement. The Company has sought an extension to the
Guercif Petroleum Agreement unl 5 June 2024 to facilitate compleon of its rigless well tesng
programme and interpretaon of the results to determine whether or not an applicaon for an
Exploitaon Concession can be submied to the regulatory authories. In addion, an extension
would provide the opportunity to drill a discreonary Jurassic well to save on drilling costs and to
ulise well services currently in-country. The Company is awaing a Joint Ministerial Order to rafy
the extension. If this is not received by 5 March 2024 then an applicaon for an Exploitaon
Concession would be delayed unl confirmaon by Joint Ministerial Order of the Company’s decision
to enter the First Extension Period.
- In Trinidad, progressing towards the development of the Snowcap oil discoveries will require the
submission of a new Field Development Plan (“FDP”) and approval thereof by the MEEI. There is no
guarantee that the approval by the MEEI may include condions that are not commercially acceptable
the Company. This is an unlikely scenario, but the Company is adopng a cauonary approach.
- In Ireland, tle to the Company’s Corrib South and Ram Head assets depends on a successful outcome
of the Company’s applicaons for successor authorisaons. Failure to grant such authorisaons will
have an adverse impact on the performance and prospects of the Group. This is not considered to be
material as the assets offshore Ireland have not been given prominence in the Company’s business
development strategy which is focused on Morocco and Trinidad as opportunies to develop near-
term cash flow for relavely modest capital outlays.
- The Mag Mell FSRU LNG project is a desktop project at present its execuon would require being
granted tle from the Minister at the Department of Environment, Climate and Communicaons of
Ireland to access the Kinsale gas pipeline for the project to shore and applying for a LNG import licence
from the Commission for the Regulaon of Ulies. There is a risk that the Company will not be
granted such access tle and/or import licence which will mean the Company cannot proceed with
the project with the consequenal adverse impact on the prospects for the Group. This is not
considered to be material as the assets offshore Ireland have not been given prominence in the
Company’s business development strategy which is focused on Morocco and Trinidad as opportunies
to develop near-term cash flow for relavely modest capital outlays.
If the Group fails to fulfil the specific terms of any of its licences or if it operates its business or enters into
transacons or arrangements in a manner that violate applicable law or regulaon, government regulators may
impose fines or suspend or terminate the right, concession, licence, permit or other authorisaon, any of which
could have a material adverse effect on the Group’s results of operaons, cash flows and financial condion.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
56
Execuve personnel risk
The Group’s success depends upon skilled management as well as technical and administrave back-up. The
loss of service of crical members of the Group’s team could have an adverse effect on the business.
The Group is dependent on the Execuve Directors to idenfy potenal business and acquision opportunies
in Trinidad, Morocco and Ireland and to oversee and execute its oil and gas operaons. The loss of services of
the Execuve Directors could have a material adverse effect on the connued operaons and growth prospects
of the Company.
Mitigation: The Group periodically reviews the compensation and contract terms of its consultants and
service providers to ensure that they are competitive, but subject to the working capital available to the
Group from time to time. The executive Directors are shareholders in the Group and committed to
developing shareholder value.
Reliance on third pares
The Company is reliant on third party service providers for drilling in Morocco and there can be no assurance
that such pares will be able to provide these services in the me scale and at the cost ancipated by the
Company, parcularly in the context of the supply chain logiscs which have been significantly impacted by the
Ukraine-Russia and Middle East conflicts. In the event that the third pares are unable to provide these
services, alternave third pares will need to be sourced and engaged which may have an adverse impact on
ming and ancipated costs on the project.
Environmental risks
The Group is subject to various environmental risks and governmental regulaons relang to the environment
and the Directors believe that future regulaons in this area are likely to become more stringent.
Climate change and climate change legislaon and regulatory iniaves could result in increased operang and
capital costs to address reducing CO2 emissions, delays to regulatory and environmental approvals and
decreased demand for, in parcular, oil. Extreme weather events are globally becoming more frequent, posing
a physical risk to acvies in each operaonal locaon. Geographically, Trinidad is most vulnerable to
hurricanes, tropical storms, and earthquakes. Northern Morocco is at risk of drought and earthquakes. Ireland
is relavely low risk yet may suffer flooding. Such events, including the long-term risk of rising sea-levels, may
damage Company property, disrupt operaonal and transportaon acvies, and pose increased health and
safety risks to third-party contractors all of which will have a negave impact on the operaons, financial
posion, performance and prospects for the Group.
In addion, investor and lender decision-making criteria are becoming increasingly dominated by climate
change awareness and consequently loss of senment for financing the fossil fuel sector. As a result, there is a
risk that it will become increasingly difficult to raise equity and debt finance for tradional oil and gas acvies.
Mitigation: The Group’s strategy has always been since IPO in May 2018 to focus primarily on gas, which is
currently considered as “sustainable” by the EU and suited therefore to accessing green finance, and CO2
sequestration to support reductions in CO2 emissions. By focusing on jurisdictions where there is a need to
reduce high levels of CO2 emissions from ammonia plants, imported fuel oil and coal- and oil-fired power
stations by substituting for gas and enacting CO2 sequestration, the Group is demonstrating its commitment
to ESG and sustainability necessary to attract responsible financing of its activities. The Group has positioned
itself in the energy transition space and has the ability to contribute expertise and knowledge necessary for
the building of local green energy hubs based on a symbiotic relationship working in tandem between natural
gas, CO2 sequestration, hydrogen production and storage and renewable energy to provide the security of
affordable energy supply and to support and protect local communities through the “economic shock” of the
energy transition process.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
57
Insurance risks
Oil and gas operaons are subject to various operang and other casualty risks that could result in liability
exposure.
The Group may not have enough insurance to cover all of its risks. COVID-19 and climate acvism has increased
insurance costs as has the Ukraine-Russia and Middle East conflicts. In addion, certain types of risk may be,
or may become, either uninsurable or not economically insurable or may not be currently or in the future
covered by the Company’s insurance policies. The occurrence of an event that is not covered in whole or in
part by insurance could have a material adverse effect on the Company.
Mitigation: A judicious quantum of self-insurance may need to be resorted to in these circumstances but
currently the Group has access to appropriate levels of insurance both at the corporate level and for its
operations.
Connuing Coronavirus Risk
The global public health emergency caused by the spread of the coronavirus is now well documented. It had
an enormous negave impact on all aspect of the health, welfare and economies of countries across the globe
including on the oil and gas sector in which the Group operates relang to oil and gas commodity prices, caused
by collapsing demand, parcularly from the aviaon industry, and storage capacity being over-saturated; and
general investor and debt-financing senment.
Although the ongoing impact of the pandemic is now substanally reduced, there connues to be a risk that
divergent variants of coronavirus may emerge which cannot be controlled by vaccinaon programmes. If such
variants evolve with similar virulence as previously experienced, there is potenal again for there to be a
material adverse impact on the health of the world populaon and the global economy and with consequenal
impact on the Group and the sector in which it operates including in parcular travel restricons, inability to
operate in certain countries, supply chain issues, collapsing commodity prices, restricted access to capital and
curtailment of business expansion.
Migaon: Management successfully put in place strategies to allow the Company to connue to operate
safely and in accordance with public health advice and restricons through the original Coronavirus outbreak.
Should a resurgence in Coronavirus occur the Board is confident that it is prepared for such an eventuality and
that the assets of the Company are now at a stage of development where producon and cash flow can be
generated in the near-term to cushion the impact of any prolonged Coronavirus outbreak.
FINANCIAL RISKS
Financial and liquidity risks
Whilst the Group has sufficient working capital for at least 12 months from the date of this Document, its
business involves significant capital expenditure. The Group may require addional funding to meet all of its
future discreonary work programs in the medium term, however there is no guarantee that such addional
funding will be available on acceptable terms at the relevant me.
Mitigation: Management has demonstrated and continues to demonstrate an ability to raise funds. Through
timely and regular cash flow projections pro-active action is capable of being taken to prevent cash deficits.
Such actions may include farm-outs, debt-financing and equity fund raises.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
58
Instability in the global financial system
Instability in the global financial system may have impacts on the Group’s liquidity and financial condion that
currently cannot be predicted.
The global financial markets are experiencing connued volality and geopolical issues and tensions connue
to arise. The Ukraine-Russia and Middle East conflicts currently has a significant impact on the global financial
markets and the recent collapse of SVB bank and rescue of Credit Suisse have caused nervousness in the
financial community. Many Organisaons for Economic Co-operaon and Development (“OECD”) countries
have connued to, or may start to, experience recession or negligible growth rates, which have had, and may
connue to have, an adverse effect on consumer and business confidence. The Company cannot predict the
severity or extent of these recessions and/or periods of slow growth. Accordingly, the Group’s esmate of the
results of operaons, financial condion and prospects of the Group will be uncertain and may be adversely
impacted by unfavourable general global, regional and naonal macroeconomic condions.
Mitigation: Pre-emptive cut back of new potential licence commitments; careful financial planning, currency
hedging and economic evaluation of opportunities with simulation of risks mitigate against these risks. The
Directors also maintain tight budgetry and financial controls to ensure cash is spent in the most efficient
manner.
Foreign exchange risks
The Group operates internaonally and is exposed to foreign exchange risk arising from various currency
transacons, primarily with respect to the Moroccan Dirham, Trinidadian dollar, Euro and US Dollar. Although,
the Group endeavors to reduce its exposure to foreign currencies by minimising the amount of funds held
overseas, holding cash balances in the currency of intended expenditure and recognising the profits and losses
resulng from currency fluctuaons as and when they arise, there remains a risk that adverse currency
movements may have a negave impact on the financial posion and performance of the Company.
RISKS RELATING TO THE ORDINARY SHARES
The market price for the Ordinary Shares may be affected by fluctuaons and volality in the price of
Ordinary Shares
The price of the Ordinary Shares aer the Placing can vary due to a number of factors, including but not limited
to, general economic condions and forecasts, the Company’s general business condion and the release of its
financial reports. Although the Company’s current intenon is that its securies should connue to trade on
the London Stock Exchange, it cannot assure investors that it will always do so. In addion, an acve trading
market in the future of the Ordinary Shares may not be maintained. Investors may be unable to sell their
Ordinary Shares unless a market can be maintained, and if the Company subsequently gains a lisng on an
exchange in addion to, or in lieu of, the London Stock Exchange, the level of liquidity of the Ordinary Shares
may decline.
The Company may fail to pay dividends
The declaraon, payment and amount of any future dividends of the Company are subject to the discreon of
the Shareholders or, in the case of interim dividends to the discreon of the Directors, and will depend upon,
amongst other things, the Company’s earnings, financial posion, cash requirements, availability of profits, as
well as provisions for relevant laws or generally accepted accounng principles from me to me. As such,
there can be no assurance as to the level or declaraon of future dividends.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
59
The Standard Lisng of the Ordinary Shares affords Shareholders a lower level of regulatory protecon than
a Premium Lisng
A Standard Lisng affords shareholders in the Company a lower level of regulatory protecon than that
afforded to investors in a company with a Premium Lisng, which is subject to addional obligaons under the
Lisng Rules. A Standard Lisng will not permit the Company to gain a FTSE indexaon, which may impact the
valuaon of the Ordinary Shares. Shareholders should note that Chapter 10 of the Lisng Rules does not apply
to the Company and as such, the Company is not required to seek Shareholder approval for an acquision
under this Chapter (although it may be required to do so for the purposes of facilitang the financing
arrangements or for other legal or regulatory reasons).
Investors may not be able to realise returns on their investment in Ordinary Shares within a period that they
would consider to be reasonable.
Investments in Ordinary Shares may be relavely illiquid. There may be a limited number of Shareholders and
this factor, together with the number of Ordinary Shares to be issued pursuant to the Placing, may contribute
both to infrequent trading in the Ordinary Shares on the London Stock Exchange and to volale Ordinary Share
price movements. Investors should not expect that they will necessarily be able to realise their investment in
Ordinary Shares within a period that they would regard as reasonable. Accordingly, the Ordinary Shares may
not be suitable for short-term investment. Even if an acve trading market develops, the market price for the
Ordinary Shares may fall below the Placing Price.
RISKS RELATING TO TAXATION
Taxaon of returns from assets located outside of the UK may reduce any net return to investors.
To the extent that any assets or business which the Company acquires is or are established outside the UK, it
is possible that any return the Company receives from it may be reduced by irrecoverable foreign withholding
or other local taxes and this may reduce any net return derived by investors from a shareholding in the
Company.
The tax treatment of Shareholders, any special purpose vehicle that the Company may establish and any
company which the Company may acquire are all subject to changes in tax laws or pracces in England and
Wales or any other relevant jurisdicon. Any change may reduce any net return derived by investors from a
shareholding in the Company.
Investors should not rely on the general guide to taxaon set out in this Document and should seek their own
specialist advice. The tax rates referred to in this Document are those currently applicable and they are subject
to change.
The Directors have and will connue to structure the Group, including any asset, company or business acquired,
to maximise returns for Shareholders in as fiscally efficient a manner as is praccable. The Company has made
certain assumpons regarding taxaon. However, if these assumpons are not correct, taxes may be imposed
with respect to the Company’s assets, or the Company may be subject to tax on its income, profits, gains or
distribuons (either on a liquidaon and dissoluon or otherwise) in a parcular jurisdicon or jurisdicons in
excess of taxes that were ancipated. This could alter the post-tax returns for Shareholders (or Shareholders in
certain jurisdicons). The level of return for Shareholders may also be adversely affected. Any change in laws
or tax authority pracces could also adversely affect any post-tax returns of capital to Shareholders or payments
of dividends (if any, which the Company does not envisage the payment of, at least in the short to medium
term). In addion, the Company may incur costs in taking steps to migate any such adverse effect on the post-
tax returns for Shareholders.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
60
The Company may be subject to the imposion by governments of windfall taxes in cases where profits have
been significantly inflated by high commodity prices driven upwards by the “Energy Crisis”.
Risks related to Jersey company law
The Company is a company incorporated in Jersey. Accordingly, UK legislaon regulang the operaons of
companies does not generally apply to the Company. In addion, the laws of Jersey apply with respect to the
Company and these laws provide rights, obligaons, mechanisms and procedures that do not apply to
companies incorporated in the UK. As the rights of Shareholders are governed by Jersey law and the Arcles,
these rights differ in certain respects from the rights of shareholders in the UK and other jurisdicons.
Risks related to changes in tax residency
The Company is exposed to changes in its tax residency and changes in the tax treatment or arrangements
relang to its business and its UK resident investors are exposed to its connued compliance with the UK
Offshore Funds Regulaons.
Whilst the Company is incorporated in Jersey, it must pay connued aenon to ensure that it remains resident
for tax purposes in Jersey (and not in the UK) at all mes. Should the Company be considered to be a tax
resident in the UK, for example, it will be subject to UK corporaon tax on its worldwide income and gains with
the result that investors stand to suffer significant tax leakage indirectly.
To maintain its Jersey tax residency, the Company must be centrally managed and controlled in Jersey (and
outside the UK) at all mes. Central management and control, which broadly seeks to determine who exercises
ulmate decision-making authority over a company's affairs and where they exercise that authority from,
typically resides at board level, unless the decision-making authority of a board is being usurped.
The composion of the Board, including each individual Director's experience and place of residence are
important factors in establishing that ulmate decision-making authority over the Company's affairs resides
with the Board. It is imperave that the Board is also capable of demonstrang having exercised its authority
during fully quorate Board meengs held regularly in Jersey.
In addion, if the Company was treated as being engaged in a trade or business (whether through a permanent
establishment or otherwise) in any country in which it invests or in which its investments are managed, all of
its income or gains, or the part of such income or gains that is aributable to, or effecvely connected with,
such trade or business may be subject to tax in that country, which could have a material adverse effect on the
Company's performance and the value of the Ordinary Shares.
UK tax resident investors should also be aware that to preserve capital gains tax treatment on the disposal of
their shares, the Company must comply with the Offshore Funds Regulaons to the extent they apply to the
Company, which may include reporng distribuons, including deemed distribuons, to investors during each
relevant reporng period in order that investors can meet their respecve UK tax liabilies accordingly.
The risk factors listed above set out the material risks and uncertainties currently known to the Directors
but do not necessarily comprise all of the risks to which the Company is exposed or all those associated with
an investment in the Company. In particular, the Company’s performance is likely to be affected by changes
in the market and/or economic conditions and in legal, accounting, regulatory and tax requirements. There
may be additional risks that the Directors do not currently consider to be material or of which they are
currently unaware.
If any of the risks referred to above materialise, the Company’s business, financial condition, results or
future operations could be materially adversely affected. In such case, the price of its shares could decline,
and investors may lose all or part of their investment.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
61
Future developments
The Group’s immediate priority is to execute in the very short term its rigless testing programme of three wells
in Morocco. The Group has developed an economic model for a nearer term gas monetisation strategy for
Guercif that involves CNG being transported to the industrial centres of Morocco. The size of the initial gas
market has been assessed and capital and operating costs have been tailored to fit the immediate marketing
opportunity. The Group’s experience and expertise with engineering, costing and developing the CO2 EOR
project in Trinidad will be applied to the CNG project in Morocco. The ability to monetise gas for relatively low
amounts of capital investment and with low operating costs, tax- and royalty-free production on the first 10.6
BCF of net gas, and high profit margins based on the high price (USD10 -12/mcf) paid by Moroccan’s industrial
gas users will be the Group’s marketing tools to attract financing to help fast-track an early gas development.
The rigless well testing results and evaluation thereof will determine whether there is an early opportunity to
apply for an Exploitation Concession.
The Group’s other near-term priority is to focus also on developing potential cash flow from its newly acquired
Cory Moruga asset onshore Trinidad. Workovers of existing wells, some of which have historically produced
oil, in the Cory Moruga Exploration and Production Licence area are expected to re-establish production with
positive cash flow in 2024. More rigorous perforating programmes will concentrate on: the potential use of
the Sandjet perforating technology to pinpoint thin-bedded reservoirs; missed hydrocarbon pays; identifying
intervals with good production characteristics in the adjoining Moruga West field and mapping their extension
into the areas where workover of existing wells are being considered; and improved well completion
techniques with treatment for waxy oil production if required.
The Group intends to keep a “drill-ready” opportunistic status in Morocco to capitalise on in-country services
and a rig and its extensive well inventory to drill on, at the Company’s sole discretion, MOU-5 to target the
“World Class” Jurassic prospect east of MOU-4. This is a higher risk but higher reward proposition that if
successful would be a game-changer for the Moroccan gas-to-power market, given its very close proximity to
the Maghreb gas pipeline.
The Group has re-positioned its business strategy for Ireland to focus on offshore regasification of LNG and gas
storage in accordance with EU guidelines for member States.
Securing the award of either or both of the Group’s Corrib South and Ram Head successor authorisations
remains a priority as these gas assets adjacent to infrastructure can potentially significantly further enhance
the enterprise value of the Group’s portfolio in terms of potential M & A activity given the unsolicited
interested already shown by an infrastructure owner in 2023.
There is now a reasonable expectation that the decision whether or not to award at least the Corrib South
successor authorisation will be made by the DECC in Q1 2024.
Liquidity remains a fundamental priority for the Group. The Company’s business assets are commercially
robust, well managed, operated efficiently and have significant growth potential. Market appreciation of
management’s business strategy for developing shareholder value has been demonstrated during the year
through the completion of over-subscribed Placings to improve liquidity during difficult and challenging times
in the financial and equity markets.
Sustainability Report
The Group is committed to sustainable development of its gas assets and its CO2 EOR business incorporating
anthropogenic CO2 sequestration.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
62
To sustain our business, we must meet the expectations of our stakeholders and focus on mitigating climate
change, advancing the circular economy so that nothing goes to waste and implementing responsible business
practices.
The short- and medium-term goal is to be a producer of energy that replaces more carbon-intensive fossil fuels
during the energy transition, thereby lowering CO2 emissions in a pragmatic and achievable manner. Best ESG
and Sustainability practices can be applied to utilising and preserving existing infrastructure and subsurface
gas storage options for the eventual roll out of green hydrogen. During this psychologically emotive period of
change maintaining security of energy supply by using gas to help decarbonize the energy sector by replacing
more carbon-intensive oil and coal is an absolute socially just necessity to control inflation in energy prices and
spiraling cost of living and interest rate rises generated mainly by unsustainable energy price hikes due to a
periodic excess of demand over capacity caused by the Ukraine-Russia and Middle East conflicts and squeezing
of gas and oil supplies, much of which is being re-directed to China and Asia due to Europe’s lack of pragmatic
realism in how to enact the Energy Transition. Demonstrable CO2 sequestration is an added advantage of the
business strategy that we have adopted. Natural gas in tandem with hydrogen storage can provide back-up to
interruptible power from wind and solar energy to improve resilience of grid supplies and potential project
economics. Expanding our responsible business practices is a key benefit for our people, partners and the
communities that are affected by our supply chain. Security of affordable energy supply and supporting in a
just, fair and equitable manner the energy transition to ameliorate the negative economic impact on local
communities currently dependent on traditional forms of energy is a key objective of the Group. No-one can
be left behind in the Energy Transition.
At the corporate level, since the advent of the Covid-19 emergency in late March 2020 our management
operate our business from home-based locations, thereby reducing the high level of energy consumed by a
fixed office location and eliminating the CO2 emissions footprint left by commuting to work by many forms of
transport that emit pollutant CO2.
The practical and pragmatic ways in which the Group are enacting its climate awareness strategy in the period
under review are described in detail in the section on ESG metrics and Sustainability.
Paul Griffiths
Executive Chairman
9 April 2024
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
63
Report of the directors
The Directors present their report together with the audited financial statements for the year ended 31
December 2023.
The Company’s Ordinary Shares were admitted on 24 May 2018 to a listing on the London Stock Exchange on
the Official List pursuant to Chapters 14 of the Listing Rules, which sets out the requirements for Standard
Listings.
Results and dividends
The Directors do not recommend the payment of a dividend (2023: nil).
Directors
The Directors who served during the year and up to the date hereof were as follows:
Date of Appointment
Paul Griffiths 21 December 2017
Lonny Baumgardner 12 July 2021
Alistair Jury 12 May 2022
Carl Kindinger 24 October 2022
For directors interests, please refer to remuneration report on pages 77 to 83.
Directors Third Party Indemnity Provisions
The Group maintained during the period and to the date of approval of the financial statements, indemnity
insurance for its Directors and Officers against liability in respect of proceedings brought by third parties.
Going Concern
Notwithstanding the operating loss incurred during the period under review and following the completion of
four successful placings, one of which was facilitated by Executive Directors’ loans, to raise GBP14,250,377
(before expenses); the exercise of an ex-director share options to raise £50,000, and the exercise of broker
warrants to raise £79,500, the Directors have a reasonable expectation that the Group will not need to raise
funds to continue with its firm operational commitments and to meet all of its current contractual liabilities
over the next 12 months.
The firm major initiatives for 2024 is the Phase 1 and phase 2 rigless testing of MOU-1, MOU-3 and MOU-4 in
Morocco and to perform workovers on the Snowcap-1 and Snowcap-2ST1 oil discoveries in Trinidad to re-
establish oil production. The costs for the programme of work in Morocco is currently based on an Approved
Financial Expenditure cost (“AFE”) based on actual quotes for well equipment and well services. The proposed
work programme in Trinidad is currently a budget estimate based on well workover costs incurred when the
Company was executing its CO2 EOR project in the Inniss-Trinity field. These budget costs have been escalated
to reflect the possible use of Sandjet perforating technology.
A negotiation with ONHYM has completed and is incorporated in Amendment #4, which awaits ratification by
a Joint Ministerial Order, which allows for the current USD1,500,000 Bank Guarantee in favour of ONHYM for
the Initial Period of the Guercif Petroleum Agreement to be rolled over to the First Extension Period. There are
no firm commitments to be carried out over the next 12 months in the context of the 200km²3D seismic
programme to be acquired during the First Extension Period of 17 months from award, which is likely to be in
Q4 2024.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
64
The Company’s 2024 planning activities allow for a number of possible discretionary work programmes over
the next 12 months as follows:
Guercif Licence, onshore Morocco
• MOU-5 exploration/appraisal well to test the Jurassic potential updip from existing MOU-4 well.
• Application for an Exploitation Concession covering MOU-1, MOU-2, MOU-3 and MOU-4.
• Subject to the award of an Exploitation Concession commission a CNG Front End Engineering Study
and place orders for long lead items – CNG trailers and compressors.
• Drill up to two appraisal/development wells to evaluate the possible extensions of the MOU-1 and
MOU-3 structures.
Cory Moruga Licence, onshore Trinidad
• Additional well workovers to restore production for up to 3 wells
• An accelerated Snowcap-3 appraisal/development well
• An accelerated Snowcap-3 appraisal/development well in Cory Moruga
• Up to 2 appraisal/development wells
Implementation of any or all of these discretionary work programmes will depend upon a number of factors
as follows:
• The results and evaluation of the Phase 1 rigless testing programme in Morocco and the Snowcap
well workovers in Trinidad.
• The ability to secure, if required, debt financing and/or equipment leasing arrangements for the CNG
development in Morocco.
• The short-term outlook for establishing positive cash flow in Trinidad.
• Opportunistic funding in the public markets dependent on market sentiment towards the Company’s
Portfolio of assets.
On this basis the Directors have a reasonable expectation that in the currently unforeseen worst case scenario
that the Guercif project does not proceed then the Company is in a position to demonstrate that it has
satisfied all of its existing contractual commitments.
The MOU-1 well drilled in 2021 and the MOU-3 and MOU-4 wells drilled in 2023 have all been completed for
two phases of rigless well testing on the basis of the presence of formation gas and/or NuTech petrophysical
wireline log interpretation. Sandjet rigless testing has always been the preferred option in order to extend
beyond the potential formation damage resulting from heavy drilling muds required to safely complete drilling
to the pre-drill final depths.
These wells are therefore potential gas producers subject to the results of the final phase of rigless well testing
(Phase 2 Sandjet).
Therefore, there are currently no circumstances at present for the Company to consider an impairment
provision for MOU-1, MOU-3 and MOU-4 accumulated costs.
The MOU-2 well was drilled in January 2023. The Company announced on 25 January 2023 that the MOU-2
well had been suspended at 1,260 metres measured depth above the primary pre-drill reservoir target.
At 1,260 metres Measured Depth a decision to suspend the well was taken for operational reasons as rates
of penetration had dropped to below 1 meter/hour.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
65
MOU-2 recovered 3 gas samples from 3 separate sands between 525.5 and 674 metres measured depth with
associated minor gas peaks. These sands are behind well casing and therefore were not covered by a wireline
logging.
A re-entry and deepening of MOU-2 will be fully evaluated once a solution to optimising the drilling mud
programme and mud properties has been completed following a review of the MOU-3 and MOU-4 results and
drilling strategies employed.
However, the improved drilling performance for MOU-4 through a similar section to that encountered in MOU-
2 has improved the level of confidence for a potentially successful re-entry of MOU-2 at some point in the
future. This is particularly significant as MOU-2 is now interpreted, following the integration of the MOU-4
technical data, as having penetrated the primary target, the Moulouya Fan, with encouraging sand
development.
MOU-2 was safely suspended for future well re-entry.
As MOU-2 is still accessible in the well through a properly engineered re-entry, there is no basis to consider an
impairment provision for accumulated MOU-2 well costs to date.
The balance outstanding of the loan made by the Company to FRAM Exploration Trinidad Ltd. (“FRAM”) for
the investment in the Inniss-Trinity Pilot CO2 EOR Project was GBP 643,906. In 2023 the Company announced
that it had completed the acquisition (the “Acquisition”) of the entire issued share capital of T-Rex, a wholly
owned subsidiary of Challenger Energy Group Plc (“CEG”). FRAM is also a wholly owned subsidiary of CEG. T-
Rex holds an 83.8% in the Cory Moruga Exploration and Production Licence containing the Snowcap-1 oil
discovery. The Acquisition was for a gross consideration (“Gross Consideration”) payable to CEG that included
USD1,000,000 in cash and allowed for the offset of the outstanding FRAM Loan balance against the agreed
Gross Consideration. The Cory Moruga Independent Technical Report and resource potential of the Snowcap-
1 discovery by Scorpion Geoscience Limited gives 2C and 3C Contingent Resources of 1.40 and 1.84 million
barrels respectively and 2C and 3C Prospective Resources of 12.91 and 19.57 million barrels respectively net
to the Company. The Company through the Acquisition has acquired TT $323,652,447 (US $ 47,948,510 @ a
forex rate of 6.75) of T-Rex tax losses as of 2022 that can be offset against 50% Petroleum Profit Tax on future
net operating profits from oil production in the Cory Moruga Exploration and Production Licence.
The Company has 3 years to complete a work program that includes the workover of the Snowcap oil discovery
and the restoration of production; the reprocessing of 3D seismic data; carry out a CO2 EOR feasibility desktop
study; and the drilling of a Snowcap-3 appraisal well.
On this basis the Directors have a reasonable expectation that in the currently unforeseen worst case scenario
that the Cory Moruga project cannot be funded in the future after 12 months, then the Company will have an
opportunity to sell T-Rex to an existing indigenous operator in Trinidad on the basis of transactions that are
regularly executed for assets onshore Trinidad, an example being the 2023 sale of the South Erin onshore
field, by Caribbean Rex Trinidad Ltd for a cash consideration of USD1.5 million as announced on 14 February
2023. The Cory Moruga opportunity combined with POGT’s CO2 EOR equipment and database may be a
potentially attractive proposition for indigenous Trinidadian companies.
For the Going Concern if there were to be a projected working capital shortfall within the next 12 months,
then the directors will institute a programme of cuts to directors’ and consultant’s remuneration and other
third-party corporate costs until such time as the USD1,500,000 Guercif Bank Guarantee in favour of ONHYM
is returned through a sale of the Guercif asset in a currently unforeseen worst case scenario, or failing this
then the Directors would seek to raise additional funds in the equity markets, assuming that no farmout of
project equity had occurred by such time as additional working capital was required.
The Company has no debt and no outstanding directors’ loans.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
66
The Directors do not believe that either a resurgence of COVID or post-Brexit issues will adversely influence
the Group’s business development strategy. Operations in Morocco can be maintained if that were to occur
based on the operating practices established for the drilling of MOU-1. Brexit will only create more
uncertainty for Ireland’s security of gas supply, thereby enhancing the Company’s LNG import project for
Ireland by creating an alternative source of gas not tied to the UK-Ireland gas transmission infrastructure.
The directors having made do and careful enquiry, are of the opinion that the Group has adequate working
capital to execute its operational commitments over the next 12 months given that current spending
commitments will prevail. The Group will therefore continue to adopt the going concern basis in preparing
the Interim Report and Financial Statements.
Substantial shareholders
Within 30 days of signing the financial statements, the total number of issued ordinary shares with voting
rights in the Company was 565,161,662.
Ordinary shares held
% Holding of
the Company
HARGREAVES LANSDOWN (NOMINEES) LIMITED <15942> 82,504,455
14.60%
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED <SMKTISAS> 62,474,400
11.05%
DAVYCREST NOMINEES <DLC> 47,837,347
8.46%
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED
SMKTNOMS> 40,613,260
7.19%
HARGREAVES LANSDOWN (NOMINEES) LIMITED <VRA> 34,325,607
6.07%
BARCLAYS DIRECT INVESTING NOMINEES LIMITED <CLIENT1> 33,801,100
5.98%
HARGREAVES LANSDOWN (NOMINEES) LIMITED <HLNOM> 31,150,041
5.51%
HSDL NOMINEES LIMITED <MAXI> 27,286,580
4.83%
VIDACOS NOMINEES LIMITED <IGUKCLT> 21,969,759
3.89%
LAWSHARE NOMINEES LIMITED <SIPP> 21,385,844
3.78%
LAWSHARE NOMINEES LIMITED <ISA> 19,531,207
3.46%
INTERACTIVE BROKERS LLC <IBLLC2> 13,641,203
2.41%
TOTAL 436,250,803 77.23%
Financial instruments
Details of the use of financial instruments by the Group are contained in note 16 of the financial statements.
Greenhouse gas emissions
The Group does not have responsibility to disclose any other emission producing sources under the Companies
Act 2006 (Strategic Report and Directors’ Report) Regulations 2014. However, Management is committed to
reducing its greenhouse gas emissions. As disclosed above, amongst other measures taken, virtual meetings,
the use of drones to inspect operational sites, and a more flexible home-based working environment will
reduce the amount of travel required by management as part of their duties in overseeing the Group’s
projects.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial
statements in accordance with applicable law and regulations.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
67
Company law requires the Directors to prepare financial statements for each financial year. Under that law
the Directors have elected to prepare the financial statements in accordance with International Financial
Reporting Standards (IFRSs’) as adopted by the EU and applicable law.
Under Company law the Directors must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of
the Group for that period. In preparing these financial statements, the Directors are required to:
* Select suitable accounting policies and then apply them consistently;
* Make judgements and accounting estimates that are reasonable and prudent;
* State whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
* Prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Group will continue in business.
In accordance with Article 103 of Companies (Jersey) Law 1991, the Directors are responsible for keeping
adequate accounting records that are sufficient to show and explain the Group’s transactions and disclose with
reasonable accuracy at any time the financial position of the Group and enable them to ensure that the
financial statements comply with the requirements of Companies (Jersey) Law 1991 as a whole.
They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
They are further responsible for ensuring that the Strategic Report and the Report of the Directors and other
information included in the Annual Report and Financial Statements is prepared in accordance with applicable
law in the United Kingdom.
The maintenance and integrity of the Group’s website is the responsibility of the Directors; the work carried
out by the auditors does not involve the consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred in the accounts since they were initially presented
on the website.
Legislation in Jersey governing the preparation and dissemination of the accounts and the other information
included in annual reports may differ from legislation in other jurisdictions.
Directors’ responsibilities pursuant to DTR4 (Disclosure and Transparency Rules)
The directors confirm to the best of their knowledge:
• The group and company financial statements have been prepared in accordance with IFRSs as
adopted by the European Union and Article 4 of the IAS Regulation and give a true and fair view of
the assets, liabilities, financial position and profit and loss of the Group and Company; and
• The annual report includes a fair review of the development and performance of the business and
financial position of the group and company together with a description of the principal risks and
uncertainties.
•
Future developments
The Group’s plans for future developments are more fully set down in the Group strategic report, on pages 7
to 62.
Corporate Governance
The Group’s corporate governance are reflected on corporate governance report, on pages 71 to 76.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
68
Statement as to Disclosure of Information to the Auditor
So far as the Directors are aware, there is no relevant audit information of which the Company’s auditor are
unaware, and each Director has taken all the steps that he ought to have taken as a Director in order to make
himself aware of any relevant audit information and to establish that the Company’s auditor is aware of that
information.
We confirm to the best of our knowledge:
• The financial statements, prepared in accordance with the relevant financial reporting framework, give
a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as whole;
• The strategic report includes a fair review of the development and performance of the business and the
position of the Company, and the undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they face; and
• The annual report and financial statements, taken as a whole, are fair, balanced and understandable
and provide the information necessary for shareholders to assess the Company’s position and
performance, business model and strategy.
Auditors
The Company’s auditor, PKF Littlejohn LLP, was initially appointed on 4 December 2017 and it is proposed by
the Board that they be reappointed as auditors at the forthcoming AGM. The auditors have expressed their
willingness to continue in office.
Events after the reporting date
These are more fully disclosed in Note 24.
By order of the Board
Lonny Baumgardner
Managing Director
9 April 2024
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
69
Board of Directors
Paul Griffiths, Executive Chairman (age 70)
Mr. Griffiths has 47 years’ oil and gas industry experience, including with the Libyan National Oil
Corporation and Gulf Oil and as consultant to Enterprise Oil, Amoco (Mediterranean) and the Arabian Gulf
Oil Company, amongst others, and as CEO of both Island Oil & Gas plc and Fastnet Oil and Gas plc.
During
this time Mr. Griffiths has managed 2D and 3D seismic data acquisition and processing
projects
onshore and offshore; drilling and testing programmes, both onshore and offshore; and
geological and
reservoir simulation deskt o p studies. Mr. Griffiths is also experienced in business
development in
respect of licence acquisitions, farm-ins, farm outs, gas marketing and gas sales
contracts and
negotiations with government agencies. In 2006, Mr. Griffiths put together and led the
team that drilled
the first successful exploration well in offshore southeast Ireland in 16 years. In 2008
he put together and
led the team that generated and submitted the plan of development for the
Amstel Field in the
Netherlands and in 2014 he put together and led the team that carried out the
Tendrara gas field re-
evaluation prior to a successful appraisal drilling program by Sound Energy. He has 18 years specific
experience in the Moroccan oil and gas sector. He is a director of H2Green Power Ltd. and Green Dragon
Hydrogen Ltd. and also was a contributor to the government of Trinidad’s CO2 EOR Steering Committee
established in 2021 and a contributor to.
He has led Predator Oil & Gas Holdings Plc since 2018 and has been instrumental in bringing the Mag Mell
FSRU project to the attention of Irish politicians and regulatory authorities in two years in advance of the 2022
European Energy Crisis.
He is a geology graduate of the Royal School of Mines (London) and an Associate of the Royal
School
of Mines.
Lonny Baumgardner, Managing Director (age 52)
Mr. Baumgardner has more than 30 years oil & gas experience and has been involved at every stage within
the exploration and production lifecycle. Having started his career as a Drilling Engineer in his native Canada,
he advanced his career towards Operations Management and General Management, in various international
locations such as the USA, Greece, Tanzania, Saudi Arabia, Kuwait, Egypt, Australia, and Morocco.
In 2015 he was appointed Country Manager for SDX Energy in Morocco, responsible for all areas of the
business including production, license acquisitions, foreign and domestic negotiations and Governmental
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
70
relations. Under Mr. Baumgardner’s leadership, production and natural gas sales tripled and the organization
was able to achieve seven new customers after the success of drilling over 20 wells. His emphasis on
corporate social responsibility meant that every employee within the organization was able to succeed.
Developing relationships has been an underlying skill throughout his career and the foundation of his
successes internationally have been bred through understanding and respecting regional nuances.
Alistar Jury, Non-Executive Director (age 58)
Alistair Jury has over 28 years’ experience in the energy industry in a variety of finance and commercial
experience in a variety of roles with ExxonMobil, Unocal, Murphy, Svenska Petroleum. He is an associate of
Columbus Energy Partners involved in evaluating renewable and sustainable energy projects worldwide. He
has a degree in Geology from University of London, is a Fellow of the Geological Society and is a Fellow member
of the Association of Chartered Certified Accountants.
Carl Kindinger, Non-Executive Director (age 72)
Carl Kindinger, aged 72, for over 30 years has held senior corporate finance roles, including board level
appointments, in a multitude of industries.
He is an associate member of the UK’s Institute of Chartered Management Accountants and holds a degree
in economics and an M.B.A.
His experience has been gained in large and medium sized companies in Africa, the Middle East, in particular
Saudi Arabia, Ireland and Romania. He has participated at executive committee and board level in strategic
decision making. Carl has track record in high level negotiations with JV partners, suppliers and principals. He
is skilled in financial planning and control; evaluation of projects; Stock Exchange IFRS reporting; IPO
requirements; business plans and performance evaluation. He has held managerial roles and non-executive
director appointments in several listed SME sector oil and gas exploration companies spanning two decades.
He joined the Board of AIM-listed Island Oil & Gas Plc as Chief Finance Officer in 2006 and assisted with
developing Island’s position in Morocco. Later he joined Fastnet Oil & Gas Plc consulting on finance matters
relating to Morocco. Carl is a former Non-executive Chairman of the Company.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
71
Corporate Governance Report
The Chairman of the Board of Directors, guided by the Non-exective Directors, of Predator Oil & Gas Holdings
Plc (‘Predator’ or ‘the Company’ or’ the Group’ or ‘we/our’) has a responsibility to ensure that Predator has a
sound corporate governance policy and an effective Board.
The Board has not adopted, but voluntarily follows, the Quoted Companies Alliance Corporate Governance
Code (“QCA Code”). The QCA Code identifies ten principles to be followed in order for companies to deliver
growth in long-term shareholder value, encompassing effective management with regular and timely
communication to shareholders. This report follows the structure of those principles and explains how we have
applied the guidance as well as disclosing any areas of non-compliance.
We will provide annual updates on our compliance with the code. The most recent update is included in the
current Annual Report available on the website. The Board considers that the Group complies with the QCA
Code so far as is practicable having regard to the size, nature and current stage of development of the Company.
The sections below set out how the Group applies the ten principles of the QCA Code and sets out areas of
non-compliance.
Principle 1: Establish a strategy and business model which promotes long-term value for shareholders
The Company is an oil and gas exploration specialist, with operations in Morocco, Trinidad and Ireland. Our
goal is to deliver long term value for our shareholders. We aim to do this by identifying prospective and early-
stage exploration projects. Consequently we:
• use our expertise to identify areas with economically feasible resources,
• assess the business environment of the target country and its attractiveness for prospecting and
eventual development and production,
• understand existing interests in a licence area in order to ensure we can earn-in to existing interests
on terms favourable to our shareholders.
Oil and gas exploration is by its nature speculative and we aim to reduce the risks inherent in the industry by
careful application of funds in individual projects. We do that by:
• Reviewing existing exploration data;
• Establishing close in-country partnerships for our projects;
• Applying the most appropriate cost-effective exploration techniques in order to determine whether
further work, using increasingly expensive exploration techniques, is justified; and
• Appreciating the likely realisation routes that will be available to us as the project moves towards
development.
Principle 2: Seek to understand and meet shareholder needs and expectations
The Company is committed to engaging with its shareholders to ensure that its strategy, operational results
and financial performance are clearly understood. We engage with our shareholders via webinars, holding
investor presentations and through our regular reporting on the London Stock Exchange. Presentations are
typically timed to follow the release of significant operational information and where approptiate interim and
final results. LSE announcements include details of the website, and include phone numbers to contact the
Company and its professional advisors. The Company has a zero tolerance to the potential dissemination of
Inside Information which restricts the amount of information it can relay specif shareholder enquiries.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
72
Private shareholders
The AGM is the main forum for dialogue with retail shareholders and the Board. The Notice of Meeting is sent
to shareholders at least 21 days before the meeting. All Directors attend the AGM and are available to answer
questions raised by shareholders. For each vote, the number of proxy votes received for, against and withheld
is announced at the meeting. The results of the AGM are announced via the London Stock Exchange. In
addition, the Executive Directors hold webinars and online interviews at which common shareholder queries
are addressed where possible. Investors can contact us via our website or by email .
Retail shareholders also attend investor evenings held by our brokers or other industry bodies and we publicise
our attendance via LSE announcements. In addition, our up to date Corporate presentation is made available
on our website.
Institutional shareholders
The Directors actively seek to build a relationship with institutional shareholders. Shareholder relations are
managed primarily by the Executive Chairman. The Executive Chairman makes presentations to institutional
shareholders and analysts during the year, mainly in London, though also virtually. We also have ad-hoc
meetings with our shareholders via conference call and email. The Board as a whole is kept informed of the
views and concerns of major shareholders by the Executive Chairman. Any significant investment reports and
research notes from analysts are also circulated to the Board. The Non-Executive Directors are available to talk
with major shareholders if required to discuss issues of importance to them and are considered to be
Independent from the executive management of the Company.
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long term
success.
Aside from our shareholders, our most important stakeholder groups are our personnel and local partners and
those local communities that may be impacted by our exploration activities. The Board is regularly updated on
stakeholder issues and their potential impact on our business to enable the Board to understand and consider
these issues in decision-making. The Board understands that maintaining the support of all its stakeholders is
paramount for the long-term success of the Company.
Personnel
The Group does not have permanent staff in Jersey, Channel Islands. All staff are recruited under consultancy
agreements as service providers. We aim to provide an environment which will attract the best, retain and
motivate our team and we monitor the effectiveness by regular one-on-one discussion. Our goal is to treat all
staff fairly and equally and to promote ethical behaviour, diversity and non-discrimination.
Local partners and communities
Our operations often provide employment in remote areas of developing countries. Essential to our success is
the establishment of close working relationships with local partners. We seek local partners who have a good
understanding of the local exploration and oil and gas exploration industry and regulations within their country,
and with the capacity and capability to assist with the management and maintenance of the project.
We are mindful of our obligations to the local environment and operate to high levels of health and safety in
respect of both our local workers and the local community. Staff training focuses on operating safety.
Engagement with local communities is dependent on jurisdiction and the stage of exploration but is typically
by public forum or with local or regional leaders, including site visits and workshops. Social projects in the local
communities are dependent on local need and also the stage of exploration/level of project investment.
As projects move forward, towards potential production activities, we seek to bring in partners who can
credibly make the investments to move towards development and production. In doing so we have regard for
their ability and desire to move projects forward, their industry reputation and their commitment to treating
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
73
the local communities fairly and protecting the environment. We enter agreements that allow us to monitor
their activities and have monthly updates on project progress.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the
organisation
Audit, risk and internal control
Financial controls
The Company has an established framework of internal financial controls, the effectiveness of which is regularly
reviewed by the Executive Management, the Audit Committee and the Board. The key financial controls are:
• The Board is responsible for reviewing and approving overall company strategy, approving new
exploration projects and budgets, and for determining the financial structure of the Company including
treasury, tax and dividend policy. Regular results and variances from plans and forecasts are reported to
the Board;
• The Audit Committee, comprising the two Non-executive Directors, assists the Board in discharging its
duties regarding the financial statements, accounting policies and the maintenance of proper internal
business, and operational and financial controls;
• Regular budgeting and forecasting is performed to monitor the Company’s ongoing cash requirements
and cash flow forecasts are circulated to the Board on a monthly basis;
• Actual results are reported against budget and prior year and are circulated to the Board;
• The Company has an investment appraisal system that considers expected costs against a range of
potential outcomes arising from the exploration opportunities that we are invited to participate in;
• Regular reviews of exploration results are performed as the basis for decisions regarding future
expenditure commitment;
• Due to the international nature of the business there are, at times, significant foreign exchange rate
movement exposures. Cash flow forecasting is done at the ‘required currency’ level and foreign currency
balances are maintained to meet expected requirements; and
• For exploration projects, we manage the risk of failure to find economic deposits by low cost early stage
exploration techniques, with detailed analysis of results. Moving projects to more expensive exploration
techniques requires a rigorous review of results data prior to deciding whether to proceed with further
work.
Non-financial controls
The Board has ultimate responsibility for the Group’s system of internal control and for reviewing its
effectiveness. However, any such system of internal control can provide only reasonable, but not absolute,
assurance against material misstatement or loss. The Board considers that the internal controls in place are
appropriate for the size, complexity and risk profile of the Group. The principal elements of the Group’s internal
control system include:
• Close management of the day-to-day activities of the Group by the Executive Directors;
• An organisational structure with defined levels of responsibility, which promotes entrepreneurial
decision-making and rapid implementation whilst minimising risks; and
• Central control over key areas such as capital expenditure authorisation and banking facilities.
The Group reviews at least annually the effectiveness of its system of internal control, whilst also having regard
to its size and the resources available. As part of the Group’s plans we continue to review a number of non-
financial controls covering areas such as regulatory compliance, business integrity, health and safety, and
corporate social responsibility. All personnel are aware of their obligations under anti-bribery and corruption
legislation.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
74
Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chair
During the year under review the Board comprised the Executive Chairman, one Executive Director and two
non-executive Directors. Casting vote is held by the non-executive Directors. During the year, there were 12
meetings, of which Paul Griffiths attended 12(100%), Lonny Baumgardner attended 12 (100%). Alistair Jury
attended 12 (100%) and Carl Kindinger attended 12 (100%). Both non-executive Directors have extensive
experience in the oil and gas industry and are qualified accountants. Both have considerable experience of
serving on the Board of public companies and are expected to commit 3 days per month to the Group.
The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge
of the Company and industry on the other, to enable it to discharge its duties and responsibilities effectively.
All Directors are encouraged to use their independent judgement and to challenge all matters, whether
strategic or operational.
The Board aim to meet at least monthly either formally or through a Board Call. The agenda is set by the
Company Secretary in consultation with the Chairman and Managing Director. The standard agenda points
include:
• Review of previous meeting minutes and actions arising therefrom;
• A report by the Managing Director covering all operational matters;
• Any update to the Register of Conflicts
• Updating the Insider Register and
• Any other business.
Directors’ conflict of interest
The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is
aware of the other commitments and interests of its Directors, and changes to these commitments and
interests are reported to and, where appropriate, agreed with the rest of the Board. A Register of Conflicts is
maintained and is a standard agenda item at each Board Meeting. The Board has access to the Company’s
advisers, including its brokers and its lawyers. The advisers do not typically provide materials for Board
meetings except if requested to do so for the purposes of discussing upcoming regulations and other issues.
Board meetings are deemed quorate if two Board members are present and providing 7 days’ notice of such
meeting has been given and waived by the non-attending Directors.
Directors and Officers Liability insurance is maintained for all Directors.
Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and
capabilities
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and
experience, particularly so in the area of oil and gas exploration and evaluation as per each of the Directors
bios shown on pages 69 and 70. All Directors receive regular and timely information on the Group’s operational
and financial performance. Relevant information is circulated to the Directors in advance of meetings by the
Company Secretary. Contracts are available for inspection at the Company’s registered office and at the Annual
General Meeting (“AGM”).
Directors are selected having regard to the Company’s needs for a balance of operational, industry, legal and
financial skills. Experience of the Oil and Gas exploration industry is important but not critical, as is experience
of running a public company.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
75
All Directors retire by rotation at regular intervals in accordance with the Company’s Articles of Association.
The Board makes decisions regarding the appointment and removal and re-election of Directors, and there is
a formal, rigorous and transparent procedure for appointments. The Company’s Articles of Association require
that at every AGM any director (i) who has been appointed by the board since the last AGM or (ii) who held
office since the first of the three previous AGMs and who did not retire at either of them or (iii) who has been
selected by the board for re-election shall retire from office and may offer himself for re-appointment by the
members.
Independent advice
All Directors are able to take independent professional advice in the furtherance of their duties, if necessary,
at the Company’s expense from lawyers, brokers and other professional advisors that they deem relevant. In
addition, the Directors have direct access to the advice and services of the Company Secretary.
Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous
improvement
In each 12 month reporting period we intend to review the performance of the team as a unit to ensure that
the members of the Board collectively function in an efficient and productive manner. Over the same period
the Non-Executive Directors will be seeking to set clear and relevant objectives for the Executive Directors, and
for the Board as a whole. For further information on Directors, please refer to the Directors’ Remuneration
report on pages 77 to 83.
Principle 8: Promote a culture that is based on ethical values and behaviour
The Board aims to lead by example and do what is in the best interests of the Company, its stakeholders and
the environment. This is enacted through on-site meetings in the countries we do business in where all
contractors and service personnel and consultants are reminded of their responsibilities to adhere to the strict
guidelines laid down in our executed contracts and environmental assessments and approvals. We operate in
remote and under-developed areas and ensure that our staff understand their obligations towards the
environment and in respect of anti-bribery and corruption.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-
making by the Board
Board programme
The Board aims to meet monthly and as and when required. The Board sets direction for the Company through
a formal schedule of matters reserved for its decision. During the year to 31
st
December 2023 the Board met
12 times. The Board and its Committees receive appropriate and timely information prior to each meeting; a
formal agenda is produced for each meeting and Board and Committee papers are distributed by the Company
Secretary several days before meetings take place. Any Director may challenge Company proposals and
decisions are taken democratically after discussion. Any Director who feels that any concern remains
unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then
circulated to all Directors. Any specific actions arising from such meetings are agreed by the Board or relevant
Committee and are then followed up by the Company’s management.
Roles of the Board, Chairman and Managing.
The Board is responsible for the long-term success of the Company. There is a formal schedule of matters
reserved to the Board. It is responsible for overall Group strategy, approval of exploration projects, approval of
the annual and interim results, annual budgets, dividend policy and Board structure. It monitors the exposure
to key business risks. There is a clear division of responsibility at the head of the Company. The Chairman is
responsible for running the business of the Board and for ensuring appropriate strategic focus and direction.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
76
The Managing Director (“MD”) is responsible for proposing the operational focus to the Board, implementing
it once it has been approved and overseeing the management of the operations. The Executive Chairman is
responsible for establishing and enforcing systems and controls, liaison with external advisors and
communicating with shareholders.
All Directors receive regular and timely information on the Group’s operational and financial performance.
Relevant information is circulated to the Directors in advance of meetings. The business reports regularly on
its headline performance against its agreed budget; the Board reviews these updates and any significant
variances at each board meeting.
Board committees
The Board is supported by the Audit and Remuneration committees. Each committee has access to such
resources, information and advice as it deems necessary, at the cost of the Company, to enable the committee
to discharge its duties. The two committees comprise both of the Non-Executive Directors.
The Audit Committee provides a formal review of the effectiveness of the internal control systems, the Group’s
financial reports and results announcements and the external audit process. The Committee meets twice per
year to review the published financial information and to meet with the Auditors.
The Remuneration Committee provides a formal and transparent review of the remuneration of the Executive
Directors and senior personnel and makes recommendations to the Board on individual remuneration
packages. The Committee met four times during the year.
The Audit Committee meets when required to consider the Company’s financial risks and mitigating actions
(including financial controls), review audit plans and completion reports prepared by its auditor, and to review
financial statements and recommend them for approval by the Board. This includes the appropriateness of the
underlying accounting judgements, going concern and asset impairment considerations. The Audit Committee
met twice during the year.
Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Company communicates with shareholders through the Annual Report and Accounts, full-year and half-
year results announcements, the Annual General Meeting (AGM) and one-to-one meetings with large existing
or potential new shareholders. The Company regularly posts LSE announcements covering operational and
corporate matters, such as drilling results and significant changes in ownership positions across historic projects
in which it still retains an investment. A range of corporate information (including all Company announcements
and a corporate presentation) is also available to shareholders, investors and the public on the Company’s
corporate website.
The Board receives regular updates on the views of shareholders through briefings and reports from Investor
Relations, the Executive Chairman and the Company’s brokers. The Company communicates with institutional
investors through briefings with management. In addition, analysts’ notes and brokers’ briefings are reviewed
to achieve a wide understanding of investors’ views.
The Company is aware of the new disclosure requirement with regards to the Task Force on Climate Related
Financial Disclosures and have made such disclosures that are relevant to the Company’s current business
startegies. Information relating to ESG and suistanability has been disclosed throughout these financial
statements.
Paul Griffiths
Executive Chairman
9 April 2024
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
77
Directors’ Remuneration Report
The Company’s Remuneration Committee at 31 December 2023 comprised two Non-Executive Directors:
Alistair Jury and Carl Kindinger.
The Company’s Remuneration Committee operates within the terms of reference approved by the Board.
The Committee met four times during the year. In July 2023 the Committee met to consider the current
remuneration arrangements of the Executive Directors, Paul Griffiths, and Lonny Baumgardner, and in
particular the arrangements for repayment of loans advanced to the Company which were subsequently
deemed as repaid upon an exercise of share options by them, as well as the introduction of a possible Bonus
Scheme. In October 2023, the Committee met to further consider the Bonus Scheme and the criteria that it
should be based on. This was finalised in a meeting held in December 2023 as outlined below under Director
Service Contracts. In November 2023, the Committee met to consider incorporating specific provisions in the
Directors Service Contracts for future Bonuses and inflationary adjustments to the Fees – outlined below in
Directors Service Contracts.
The items included in this report are unaudited unless otherwise stated.
Committee’s main responsibilities
• The Remuneration Committee considers the remuneration policy, personnel engagement terms and
remuneration of the Executive Directors and senior management;
• The Remuneration Committee’s role is advisory in nature, and it makes recommendations to the Board
on the overall remuneration packages for Executive Directors and senior management in order to
attract, retain and motivate high quality executives capable of achieving the Company’s objectives;
• The Remuneration Committee also reviews proposals for any share option plans and other incentive
plans, makes recommendations for the grant of awards under such plans as well as approving the terms
of any performance-related pay schemes;
• The Board’s policy is to remunerate the Company’s executives fairly and in such a manner as to facilitate
the recruitment, retention and motivation of suitably qualified personnel as service providers; and
• The Remuneration Committee, when considering the remuneration packages of the Company’s
executives, will review the policies of comparable companies in the industry.
Consideration of shareholder views
The Remuneration Committee considers shareholder feedback received and guidance from shareholder
bodies. This feedback, plus any additional feedback received from time to time, is considered as part of the
Company’s periodic reviews of its policy on remuneration.
Statement of policy on Directors’ remuneration
The Company’s policy is to maintain levels of remuneration so as to attract, motivate, and retain Directors and
Senior Executives of the highest calibre who can contribute their experience to deliver industry leading
performance with the Company’s operations. Currently Director’s remuneration is not subject to specific
performance targets.
The Remuneration Committee considers remuneration policy and the employment terms and remuneration
of the Executive Directors and makes recommendations to the Board of Directors on the overall remuneration
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
78
packages for the Executive Directors. No Director takes part in any decision directly affecting their own
remuneration.
There was no vote taken during the last general meeting with regard to the Director’s remuneration policy.
This is considered reasonable given the current size and stage of development of the Company and the fact
that remuneration is not currently linked to performance. This will be revisited in future periods once a
meaningful remuneration policy has been implemented as noted above.
Directors’ remuneration
The Directors who held office at 31 December 2023 and who had beneficial interests in the ordinary shares of
the Company are summarised as follows:
Name of Director Position
Carl Kindinger Non-Executive Director
Alistair Jury Non-Executive Director
Paul Griffiths Executive Chairman
Lonny Baumgardner Managing Director
The interests in the shares of the Company of the Directors who served during the year were as follows:
31 December 2023 At the date of this report
Ordinary Shares Share Options Ordinary Shares Share Options
Paul Griffiths 46,415,581 15,355,486 46,415,581 15,355,486
Lonny Baumgardner 1,829,787 15,355,486 1,829,787 15,355,486
Dr Stephen Staley - 1,650,000 - 1,650,000
Tom Evans - 2,000,000 - 2,000,000
Alistair Jury - 5,000,000 - 5,000,000
Carl Kindinger
1,581,103 5,000,000 1,581,103 5,000,000
Moyra Scott(1) - 3,000,000 - 3,000,000
Total 49,826,471 48,360,972 49,826,471 48,360,972
1
. Moyra Scott was appointed as a director of Predator Gas Ventures Limited on 27 March 2023
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
79
Share Option Scheme
The following Directors have been granted rights under the Group’s Share Option Scheme:
In issue at
31 December
2022
2023
Options
Awarded
Exercised during
year
In issue at
31 December
2023
Vesting
Periods See
notes 19
and 24
Paul Griffiths 15,355,486 11,183,605 (11,183,605) 15,355,486
Lonny Baumgardner 15,355,486 7,928,444 (7,928,444) 15,355,486
Louis Castro
2,000,000
- (1,000,000) 1,000,000
Steve Staley 1,650,000 - - 1,650,000
Tom Evans 2,000,000 - - 2,000,000
Alistair Jury 2,000,000 3,000,000 - 5,000,000
Carl Kindinger
2,000,000
3,000,000 - 5,000,000
Moyra Scott
-
3,000,000 - 3,000,000
*Grant dates were 27 October 2020, and November 2022.
In March 2023, The Board approved a grant of 3,000,000 options to Moyra Scott
In May 2023, the Board approved a grant of 11,183,605 options to Paul Griffiths and 7,928,444 options to
Lonny Baumgardner
In October 2023, the Board approved a grant of 3,000,000 options to the Non-Executive Directors, Carl
Kindinger and Alistair Jury.
Details of the Directors service agreements are set out below.
Directors’ service contracts
Paul Griffiths provides his services as Executive Chairman under a consultancy agreement with the Company.
The consultancy agreement with Petro-Celtex Consultancy Limited (“Petro-Celtex”) provides for the
services of Paul Griffiths as Executive Chairman of the Company, on a part-time basis.
Up to November 2023, the consultancy agreement entitled Petro-Celtex to a fixed base fee of GBP138,000
per annum and a technical services consultancy fee of GBP188 per hour (subject to an annual cap of
£108,000). The Remuneration committee met in November 2023 to consider whether these rates were still
appropriate. It was decided to increase the fixed base fee by the annual Jersey RPI of 10.1% to GBP152,040
per annum, and increase the annual cap to £140,000 reflecting additional work likely to be required around
the testing and drilling programs.
This consultancy agreement is subject to termination by either party on six months’ written notice. In
addition, the Company may forthwith terminate Paul Griffiths’ appointment as a director of the Company
for, inter alia, a material breach by Petro-Celtex of its obligations under the consultancy agreement referred
to above and Paul Griffiths
may terminate such appointment for a material breach by the Company of its
obligations under
the consultancy agreement referred to above.
Paul Griffiths also has an Advisory Agreement dated 1 September 2020 with a subsidiary, Mag Mell Energy
Ireland Limited (formerly named Predator LNG Ireland Ltd), a company set up to explore opportunities in
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
80
Ireland, and in particular the feasibility of developing an offshore LNG import facility for Ireland. Under the
terms of an Advisory Agreement dated 1 September 2020, Paul Griffiths is entitled to a fixed Advisory Fee of
GBP40,000 per annum and a technical services consultancy fee of GBP188 per hour.
Under an Exclusivity and Referral Agreement between Mag Mell and Hamilton Fox Holdings Ltd. (“HFHL”), a
company incorporated jointly by Paul Griffiths and Ronald Pilbeam, a previous Director, to hold performance
incentives under the aforementioned agreement dated 2 September 2020, HFHL has an entitlement to
performance incentives comprising up to a maximum of 20% of the issued share capital of Mag Mell split into
four separate tranches each of 5%. Performance Conditions for allotment of each tranche of 5% are defined
as the signing of Collaboration Agreement in each case between Mag Mell and bona fide international entities
in the downstream LNG and gas infrastructure and distribution business. Allotment of the final 5% tranche is
conditional on a Financial Investment Decision (“FID”) being made in respect of developing an LNG import
facility for Ireland.
Lonny Baumgardner was appointed on 12
th
July 2021, and provides his services as Managing Director under a
consultancy agreement with the Company. The Company entered into a consultancy agreement with
Touchpoint Energy S.L, (“Touchpoint”). under which Touchpoint provides the services of Lonny Baumgardner
as Managing Director of the Company. Up to November 2023, the consultancy agreement entitled Touchpoint
to a fixed base fee of GBP138,000 per annum and a technical services consultancy fee of GBP188 per hour
(subject to an annual cap of £108,000). The Remuneration committee met in November 2023 to consider
whether these rates were still appropriate. It was decided to increase the fixed base fee by the annual Jersey
RPI of 10.1% to GBP152,040 per annum, and increase the annual cap to £140,000 reflecting additional work
likely to be required around the testing and drilling programs. The engagement of Touchpoint is subject to
termination by either party on six months’ written notice.
In May 2023, the Committee met to discuss compensating the Executive Directors for agreeing to exercise
19,112,049 options and transferring the resulting shares at a lower price (being the price of a share placing
conducted at that time) than the options exercise price, and to capitalise various loan balances. An additional
19,112,049 Options were issued to replace those options exercised, and it was also agreed to compensate
for the capitalisation of the loan balances by way of a compensation payment equal to the amount of the
loan based on specific future production targets being reached on Guercif or Trinidad.
In July 2023, the Committee met and discussed a possible bonus payment to the Executive Directors in
recognition of their work on the Morocco drilling program and work in securing the short to medium term
financing needs of the Company. In October 2023 the committee met to finalise the criteria for such a Bonus
payment, and approved an immediate payment of GBP250k to each of the Executive Directors – to be paid
50% in shares and 50% cash, for successful outcome of the drilling program, and a possible future additional
GBP250k to each of the Executive Directors dependent on reaching a specific production target from the
Company’s recently acquired Cory Moruga project in Trinidad. As a result, 1,329,787 shares were issued in
December 2023 to Paul Griffiths and Lonny Baumgardner. It was also decided to formalise the Discretionary
Bonus Scheme for the Executive Directors and include a provision as a revision to existing Directors Service
contracts for such an award from time to time.
In October 2023 the committee met to finalise the criteria for such a Bonus payment, and approved an
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
81
immediate payment of GBP250k to each of the Executive Directors – to be paid 50% in shares and 50% cash,
for successful outcome of the drilling program, and a possible future additional GBP250k to each of the
Executive Directors dependent on reaching a specific production target from the Company’s recently
acquired Cory Moruga project in Trinidad. As a result, 1,329,787 shares were issued in December 2023 to
Paul Griffiths and Lonny Baumgardner. It was also decided to formalise the Discretionary Bonus Scheme for
the Executive Directors and include a provision as a revision to existing Directors Service contracts for such
an award from time to time.
Alistair Jury was appointed as Non-Executive Directors of the Company on 12 May 2022 and entered into a
letter of appointment with the Company. Carl Kindinger was appointed as a Non-Executive Director of the
Company on 24 October 2022 when he entered into a letter of appointment with the Company. Pursuant to
this letter of appointment Alistair Jury and Carl Kindinger were entitled to an annual fee of GBP40,000 which
includes consideration for being a member of the Remuneration Committee and for being a member of the
Audit Committee. In November 2023 these fees were reviewed by the Board and an increase of 10.1%
agreed in line with Jersey RPI.
Carl Kindinger has a consultancy arrangement for providing additional financial reporting and corporate
compliance assistance from time to time, chargeable at a rate of GBP100/hour.
Remuneration components
Up until 1 September 2023 consultancy fees and a share incentive scheme were the only two components of
remuneration. The Company established a share option scheme that became effective on 24 May 2018
for a
long-term incentive plan for the award of share options. During 2023 the Committee met a number of times
to consider the award of a Bonus Payment to the Executive Directors – as outlined above. It was proposed that
the Executive Directors service contracts be amended to include a provision for a discretionary Bonus Scheme
effective from 1 September 2023
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
82
Directors’ interests in share warrants
Directors do not hold any share warrants over ordinary shares.
The Committee considers that the current remuneration of Executive Directors to be consistent with pay and
appointment benefits across the Group.
UK 10-year performance graph
The directors have considered the requirement for a UK 10-year performance graph comparing the Group’s
Total Shareholder Return with that of a comparable indicator. The directors do not currently consider that
including the graph will be meaningful because the Company has only been listed since May 2018, is not paying
dividends and is currently incurring losses as it gains scale. The directors therefore do not consider the inclusion
of this graph to be useful to shareholders at the current time. The directors will review the inclusion of this
table for future reports.
UK 10-year CEO table and UK percentage change table
The directors have considered the requirement for a UK 10-year CEO table and UK percentage change table.
The directors do not currently consider that including these tables would be meaningful because, as described
under the Directors’ Service Contracts section above directors have been engaged in the Company only since
May 2018. The directors will review the inclusion of this table for future reports.
Relative importance of spend on pay
The Directors have considered the requirement to present information on the relative importance of spend
on pay compared to shareholder dividends paid. Given that the Company does not currently pay dividends the
directors have not considered it necessary to include such information.
Policy for new appointments
Base salary levels will take into account market data for the relevant role, internal relativities, the individual’s
experience and their current base salary. Where an individual is recruited at below market norms, they may
be re-aligned over time (e.g. two to three years), subject to performance in the role. Benefits will generally be
in accordance with the approved policy.
For external and internal appointments, the Committee may agree that the Company will meet certain
relocation and/or incidental expenses as appropriate.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
83
Policy on payment for loss of office
Payment for loss of office would be determined by the Remuneration Committee, taking into account
contractual obligations.
Approved by the Board on 9 April 2024.
Alistair Jury
Member of the Remuneration Committee
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
84
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
PREDATOR OIL AND GAS HOLDINGS PLC
Opinion
We have audited the group financial statements of Predator Oil and Gas Holdings Plc (the ‘group’) for
the year ended 31 December 2023 which comprise the Consolidated statement of comprehensive
income, the Consolidated statement of financial position, the Consolidated statement of changes in
equity, the Consolidated Statement of cash flows, Statement of accounting policies and notes to the
financial statements, including significant accounting policies. The financial reporting framework that
has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
In our opinion, the group financial statements:
• give a true and fair view of the state of the group’s affairs as at 31 December 2023 and of its
loss for the year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union;
and
• have been properly prepared in accordance with the requirements of the Companies (Jersey)
Law 1991.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the
group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the
directors’ assessment of the group’s ability to continue to adopt the going concern basis of accounting
included:
• obtaining and reviewing the cashflow forecast and budgets for a period of at least 12 months
from the date of signing the financial statements and the corresponding assumptions used;
• reviewing the post year end bank balances for evidence of available cash;
• documenting and discussing with management the future plans of the group; and
• challenging management’s key inputs and assumptions, including but not limited to the forecast
committed costs, to the cashflow forecast and performing sensitivity analysis.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the group’s ability to
continue as a going concern for a period of at least twelve months from when the financial statements
are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described
in the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative
thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit
procedures.
The materiality applied to the group financial statements as a whole was set at £440,000 (2022:
£187,000). Performance materiality was set at £308,000 (2022: £130,000), being 70% (2022: 70%) of
materiality for the group financial statements as a whole.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
85
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
PREDATOR OIL & GAS HOLDINGS PLC (continued)
Materiality has been calculated as 2% of gross assets (2022: 2% of net assets), which we have
determined, in our professional judgement, to be the principal benchmark relevant to members of the
company in assessing financial performance. As the group has yet to begin trading, the key focus of
the group is on exploration activities to advance the development of its investments. The performance
materiality threshold was considered to be sufficient to provide coverage of significant and residual risks
to the balances within the financial statements representing risk areas and those that require
management judgements and estimates.
We agreed that we would report to the audit committee all misstatements we identified through our audit
with a value in excess of £22,000 (2022: £9,300), in addition to other audit misstatements below that
threshold that we believe warrant reporting on qualitative grounds.
Component materiality ranged from £59,000 to £272,000 (2022: £13,000 to £117,000), with
performance materiality set at between £41,300 and £277,200 (2022: between £9,100 and £81,900),
being 70% (2022: 70%) of the component headline materiality.
Our approach to the audit
In designing our audit, we determined materiality, as above, and assessed the risks of material
misstatement in the group financial statements. In particular, we considered the areas involving
significant accounting estimates and judgement by the directors and including future events that are
inherently uncertain, in particular with regard to the capitalisation of exploration costs and the acquisition
of T-Rex Resources (Trinidad) Limited. We also addressed the risk of management override of internal
controls, including among other matters, consideration of whether there was evidence of bias that
represented a risk of material misstatement due to fraud. Procedures were then performed to address
the risks identified and for the most significant assessed risks of material misstatement, the procedures
performed are outlined below in the Key audit matters section of this report.
As part of our planning, we assessed all components of the group for their significance in order to
determine the scope of the work to be performed. Predator Oil and Gas Holdings Plc, Predator Gas
Ventures Limited and T-Rex Resources (Trinidad) Limited were considered to be significant
components, given they hold the capitalised costs and the acquisition as described in the Key audit
matters section of this report below.
To support our audit opinion on the group financial statements, we performed an assessment of risk at
the group level using the group materiality, and full scope audits were performed on the following
components using a component materiality: Predator Oil and Gas Holdings Plc, Predator Oil and Gas
Trinidad Limited, and Predator Gas Ventures Limited. The remaining components of the group were
subject to analytical review and targeted testing as appropriate as they are not material.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of
the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
86
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
PREDATOR OIL & GAS HOLDINGS PLC (continued)
We have determined the matters described below to be the key audit matters to be communicated in
our report.
Key Audit Matter
How the scope of our audit responded to the key
audit matter
Capitalisation and valuation of intangible assets (note 10)
The group has material
intangible assets of £12,335,992
(2022: £5,275,720) in relation to
capitalised exploration costs as
a result of exploration activities
in Morocco.
There is a risk that costs have
been incorrectly capitalised in
Predator Gas Ventures Ltd
when considering the
recognition criteria of IFRS 6
Exploration for and Evaluation
of Mineral Resources. There is
also a risk that there are
indicators of impairment as at
31 December 2023 which could
result in the intangible assets
being overstated.
Management’s assessment of
impairment under IFRS 6
required estimation and
judgement, particularly in early-
stage exploration projects, and
thus the capitalisation and
valuation of intangible assets
has been designated as a key
audit matter.
Our work in this area included:
•
Obtaining and reviewing management’s
assessment of the capitalisation and valuation
of the intangible assets as at 31 December
2023, and challenging key inputs and
assumptions in the assessment, where
appropriate;
•
Verifying the good standing and ownership of
the intangible assets included licences;
•
Considering whether there are any indicators of
impairment in accordance with IFRS 6;
•
Reviewing budgets and work programmes for
the licence areas;
•
Reviewing the latest studies, including
Regulatory News Service (RNS)
announcements and Independent Technical
Report (ITR) reports, to demonstrate the
progress the project has made over the year;
•
Testing substantively to supporting
documentation and assess whether costs
capitalised in the year are in accordance with
IFRS 6;
•
Reviewing the licence agreements to assess
whether there are associated capital
commitments with regards to minimum spend
on the licence or annual licence fees; and
•
Reviewing the accounting policies and related
disclosures, in the financial statements,
including capital commitments, to ensure they
are in accordance with IFRS 6 and other
applicable accounting standards
.
Acquisition of T-Rex Resources (Trinidad) Limited (note 12)
Predator Oil & Gas Trinidad Ltd
(a subsidiary entity) acquired a
subsidiary during the year.
Management have assessed
that this is a business
combination in accordance
with IFRS 3 Business
Combinations. Management
must therefore apply their
judgement to develop an
accounting policy that provides
Our work in this area included:
•
Reviewing the sale and purchase agreement for
the investment purchased during the period and
ensuring the terms and conditions of the
acquisition have been appropriately reflected in
the accounting treatment applied;
•
Testing substantively the consideration paid by
vouching to supporting documentation;
•
Reviewing management’s assessment of the
fair value of the identifiable assets and liabilities
of the subsidiary acquired, agreeing balances to
supporting documents;
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
87
relevant and reliable
information.
There is a risk that the
accounting treatment applied
by management is not in
accordance with IFRS 3. There
is also a risk that fair value of
the net assets acquired is
overstated and/or that the
consideration payable has not
been valued correctly.
This is deemed to be a key audit
matter as the valuation of
assets and liabilities acquired
is subject to management
judgement and estimation
uncertainty.
•
Reviewing management’s accounting
treatment and policy applied for the acquisition
in accordance with IFRS 3;
•
Reviewing and critically assessing
management’s impairment assessment for the
intangible assets arising from the acquisition;
and
•
Considering whether there are indications of
impairment in the value of investments acquired
during the period
.
Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information
contained within the annual report. Our opinion on the group financial statements does not cover the
other information and we do not express any form of assurance conclusion thereon. Our responsibility
is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies
(Jersey) Law 1991 requires us to report to you if, in our opinion:
• proper accounting records have not been kept, or proper returns adequate for our audit have
not been received from branches not visited by us; or
• the financial statements are not in agreement with the accounting records and returns.
Responsibilities of directors
As explained more fully in the Statement of Directors’ responsibilities, the directors are responsible for
the preparation of the group financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group financial statements, the directors are responsible for assessing the group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the group or
to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
88
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
PREDATOR OIL & GAS HOLDINGS PLC (continued)
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
• We obtained an understanding of the group and the sector in which it operates to identify laws
and regulations that could reasonably be expected to have a direct effect on the financial
statements. We obtained our understanding in this regard through discussions with
management, and application of cumulative audit knowledge and experience of the sector.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF PREDATOR OIL & GAS HOLDINGS PLC (continued)
• We determined the principal laws and regulations relevant to the group in this regard to be
those arising from Companies (Jersey) Law 1991, Disclosure and Transparency Rules, the
Financial Conduct Authority Listing Rules, General Data Protection Regulations, Jersey and
local tax regulation, local environmental laws and local mineral extraction regulations.
• We designed our audit procedures to ensure the audit team considered whether there were any
indications of non-compliance by the Group with those laws and regulations. These procedures
included, but were not limited to:
o Making enquiries of management;
o Reviewing board minutes;
o Reviewing legal and professional fees and understanding the nature of the costs and
the existence of any non-compliance with laws and regulations;
o Reviewing RNS publications; and
o Reviewing accounting ledgers for any unusual journal entries which may indicate non-
compliance.
• We also identified the risks of material misstatement of the financial statements due to fraud.
We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from
management override of controls, that the potential for management bias was identified in
relation to the capitalisation and valuation of intangible assets and acquisition of T-Rex
Resources (Trinidad) Limited as described in the Key audit matters section of this report above.
• As in all of our audits, we addressed the risk of fraud arising from management override of
controls by performing audit procedures which included, but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of bias; evaluating the business rationale
of any significant transactions that are unusual or outside the normal course of business; and
reviewing of bank statements during the period to identify any large and unusual transactions
where the business rationale is not clear.
• We obtained sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the group to express an opinion on the group financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial statements or non-compliance with
regulation. This risk increases the more that compliance with a law or regulation is removed from the
events and transactions reflected in the financial statements, as we will be less likely to become aware
of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud
rather than error, as fraud involves intentional concealment, forgery, collusion, omission or
misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
89
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Article 113A of
the Companies (Jersey) Law 1991Chapter. Our audit work has been undertaken so that we might state
to the company’s members those matters we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Nicholas Joel (Engagement Partner) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
90
Consolidated statement of comprehensive income
For the year ended 31 December 2023
| 01.01.2023 | 01.01.2022 | ||
| to | to | ||
| 31.12.2023 | 31.12.2022 | ||
| Notes | £ | £ | |
Administrative expenses | 4 | ( | ( |
Share based payments | 4 | ( | ( |
Total operating expenses | ( | ( | |
Operating loss | ( | ( | |
Finance Income | 3 | ||
Finance expense | 5 | ( | ( |
Loss for the year before taxation | ( | ( | |
Taxation | 6 | ||
Loss for the year after taxation | ( | ( | |
Total comprehensive loss for the year attributable to the owner of the parent | ( | ( | |
Earnings per share basic and diluted (pence) | 8 | ( | ( |
The accompanying accounting policies and notes on pages 94 to 121 form an integral part of these financial
statements.
All items in the above statement derive from continuing operations.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
91
Consolidated statement of financial position
As at 31 December 2023
| 31.12.2023 | 31.12.2022 | ||
| Notes | £ | £ | |
| Non-current assets | |||
Tangible fixed assets | 11 | ||
Intangible assets | 10 | ||
| Current assets | |||
Trade and other receivables | 13 | ||
Cash and cash equivalents | 14 | ||
Total assets | |||
| Equity attributable to the owner of the parent | |||
Share capital | 17 | ||
Reconstruction reserve | |||
| Warrants | |||
issuance cost | 18 | ( | ( |
Share based payments reserve | 18 | ||
Retained deficit | ( | ( | |
Total equity | |||
| Current liabilities | |||
Trade and other payables | 15 | ||
Total liabilities | |||
Total liabilities and equity |
The accompanying accounting policies and notes on pages 94 to 121 form an integral part of these financial
statements.
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
92
The accompanying accounting policies and notes on pages 94 to 121 form an integral part of these financial
statements.
Consolidated statement of changes in equity
For the year ended 31 December 2023
Total
£££ £ £ £
| Attributable to owner of the parent | ||||||
| Share based | ||||||
| Recons tructi on | Warrants | pa yments res erve | Retai ned defi ci t | |||
| Share Capital | reserve | issuance cost | ||||
Balance at 31 December 2021 | ( | ( | ||||
Issue of ordinary share capital | ||||||
Issue of warrants | ||||||
Fair value of share options | ||||||
Transaction costs | ( | ( | ||||
Exercised options | ( | |||||
Exercised warrants | ( | |||||
Cancelled/expired warrants | ( | |||||
Warrants issuance costs | ( | ( | ||||
Total contributions by and distributions to owners of the parent recognised directly in equi ty | ( | ( | ||||
Loss for the year | ( | ( | ||||
Total comprehensive income for the year | ( | ( | ||||
Balance at 31 December 2022 | ( | ( | ||||
Issue of ordinary share capital | ||||||
Issue of warrants | ||||||
Fair value of share options | ||||||
Transaction costs | ( | ( | ||||
Exercised options | ( | |||||
Exercised warrants | ( | |||||
Cancelled/expired warrants | ( | |||||
Warrants issuance costs | ( | ( | ||||
Total contributions by and distributions to owners of the parent recognised directly in equi ty | ( | ( | ||||
Loss for the year | ( | ( | ||||
Total comprehensive income for the year | ( | ( | ||||
Balance at 31 December 2023 | ( | ( |
P
redator Oil & Gas Holdings Plc
For the year ended 31 December 2023
93
The accompanying accounting policies and notes on pages 94 to 121 form an integral part of these financial
statements.
Significant non-cash transactions
The significant non-cash transactions during the year are detailed in notes 17 and 19.
Consolidated statement of cash flows
For the year ended 31 December 2023
Notes
£ £
| Cash flows from operating activities | |||
Loss for the period before taxation | ( | ( | |
Issue of share options | 19 | ||
Finance expense | 5 | ||
Finance income | ( | ( | |
Fair value of warrants | |||
Depreciation | |||
Foreign exchange | ( | ||
Bonus payable in shares | |||
Increase in receivables on acquisition of T-Rex Resources (Trinidad) Ltd | 12 | ||
Increase in payables on acquisition of T-Rex Resources (Trinidad) Ltd | 12 | ( | |
Waiver of loans on acquisition of T-Rex Resources (Trinidad) Ltd | 12 | ( | |
Decrease/(i ncrea s e) i n trade and other recei va bl es | ( | ||
(Decrease)/increase in trade and other payables | |||
Net cash used in operating activities | ( | ( | |
| Cash flow from investing activities | |||
Acqui s i ti on of T-Rex Res ources (Tri ni da d) Ltd | 12 | ( | |
Capitalised costs - Project Guercif - Morocco | 10 | ( | ( |
Net cash used in investing activities | ( | ( | |
| Cash flows from financing activities | |||
Proceeds from issuance of shares, net of issue costs | 17 | ||
Finance expense paid | ( | ( | |
Finance income received | |||
Net cash generated from financing activities | |||
Effect of exchange rates on cash | ( | ||
Net increase in cash and cash equivalents | |||
Cash and cash equivalents at the beginning of the year | |||
Cash and cash equivalents at the end of the year |
01.01.2023 to
31.12.2023
01.01.2022 to
31.12.2022
Adjustments for:
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
94
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
95
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
96
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
97
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
98
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
99
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
100
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
101
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
102
Notes to the financial statements
For the year ended 31 December 2023
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
103
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
104
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
105
2023 2022
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
106
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
107
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
108
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
109
14 Cash and cash equivalents 2023 2022
Group Group
£ £
Barclays Bank Plc 6,417,092 2,967,535
Société Générale 66,940 355,626
6,484,033 3,323,161
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
110
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
111
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
112
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
113
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
114
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
115
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
116
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
117
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
118
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
119
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
120
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
121
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
122
Corporate information
Directors
Paul Stanard Griffiths (Executive Director – Chairman)
Lonny Baumgardner (Managing Director)
Alistair Jury (appointed 12 May 2022)
Carl Kindinger (appointed 24 October 2022)
Company Secretary Oak Secretaries (Jersey) Limited
3rd Floor, IFC5
Castle Street
St. Helier
Jersey JE2 3BY
Registered Office 3rd Floor, IFC5
Telephone+44 (0) 1534 834 600
Joint Broker and Placing Agent Novum Securities Limited
2
nd
Floor
7-10 Chandos Street
London W1G 9DQ
Joint Broker and Placing Agent Optiva Securities Limited
terminated – 6
th
July 2023
118 Piccadilly
London W1J 7NW
Joint Broker and Placing Agent Oak Securities
90 Jermyn Street
LONDON SW1Y 6JD
Corporate Advisor Fox Davies Capital Limited
5 Technology Park
Colindeep Lane
LONDON NW9 6BX
Auditors PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London E14 4HD
Legal advisers to the Group as to
English law
Charles Russell Speechlys LLP
5 Fleet Place
London EC4M 7RD
Legal advisers to the Group as to Jersey
law
Pinel Advocates
One Liberty Place
St. Helier
Jersey JE2 3NY
Predator Oil & Gas Holdings Plc
For the year ended 31 December 2023
123
Competent Person SLR Consulting (Ireland) Ltd
7 Dundrum Business Park
Windy Arbour
Dublin 14, D14 N2Y7
Republic of Ireland
Scorpion Geoscience Limited
Oakmoore Court
Kingswood Road
Hampton Lovett
Droitwich, Worcestershire
WR9 0QH
Registrar
Computershare Investor Services (Jersey) Limited
Queensway House
13 Castle Street
St. Helier
Jersey JE1 1ES
Financial PR Flagstaff Strategic and Investor Communications
1 King Street
London EC2V 8AU
Principal Bankers Barclays Bank Plc
13 Library Place
St. Helier
Jersey JE4 8NE