MOROCCO: Predator Oil & Gas Announces Operations Update

Testing programme

The proposed rigless testing programme has been presented to the Office National des Hydrocarbures et des Mines (ONHYM).

MOU-1 will be the first well in the rigless testing programme to be performed by Energy Consulting Services (ECS) based in France and with a licence to use and operate the Sandjet perforating technology.

Ten individual horizons within the interval 1217 to 1300 metres TVD KB have been selected for perforating.

In the interval 769 to 912 metres TVD KB a further eight individual horizons have been selected for perforating.

Four additional data points between 1397 to 1400.5 and 967 to 991 metres and at 1035 metres TVD KB may be added to provide information that may be potentially useful for the finalisation of the MOU-3 rigless testing programme.

The MOU-1 well will establish Sandjet rigless testing procedures and will adjust the operating parameters to optimise the depth of penetration into the reservoirs of interest if and where required.

Testing individual sands in sequence from the bottom of the MOU-1 well upwards will evaluate the potential for co-mingling different sand intervals on production and help determine if there is a requirement to isolate any interval downhole based on any material water cut.

An alternative to a coiled tubing unit originally sourced out of Tunisia, which is required to run the Sandjet perforating tool, has been now been sourced in France by ECS. This will enable the testing programme to commence at the earliest possible opportunity in September. Shipping logistics from Tunisia, due to competition for vessel cargo space, created uncertainty regarding the exact scheduling of commencement of field operations.

The adjusted schedule for delivery of the Sandjet equipment is currently being put together by ECS and a further announcement will be made when this is finalised..

Future drilling opportunities

 The updip appraisal of the Jurassic target encountered in MOU-4 is a key objective of the Company.

Three preliminary drilling locations are being selected for inclusion in a new Environmental Impact Assessment (“EIA”).

Well design and sourcing of long lead well inventory has commenced.

A field trip is being planned for the autumn to evaluate the reservoir potential of the entire interval of interest in Jurassic surface exposures to the south of the Guercif licence area.

Geochemical source rock quality and maturation studies, including evidence for migrated gas, for the Jurassic section penetrated in the MOU-4 well are expected to be completed in September.

Two other near-term drilling opportunities are also being assessed, one location covered by an existing EIA and the other to be added to the new EIA. Evaluation of the higher pressure shallow gas encountered in MOU-3 and a southwest extension of the MOU-3 structure would be the targets for future drilling.

Paul Griffiths, Executive Chairman of Predator Oil & Gas Holdings Plc commented:

‘The Sandjet rigless testing programme is on track and scheduled to be executed and completed in September.

In parallel with the testing programme agreements for the sale of gas and sourcing and scheduling for delivery of long lead items required for the CNG development and an Environmental Impact Assessment are being progressed.

Company strategy is to develop a revenue-generating business opportunity capable of being monetised under the right market conditions.

Opportunities for further drilling, in particular to evaluate the Jurassic structure partly penetrated by MOU-4, are being developed. The strategy has a clear objective to identify and pursue balanced risk-reward projects where early near-term shareholder value can be delivered through drilling success. Current market dynamics support drilling activity and very near-term value creation.

Subject to rigless testing results, an initial Compressed Natural Gas development can potentially be funded by a debt instrument linked to production thereby freeing up existing cash resources for more high impact drilling.

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