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Look at page 8 of the Corporate presentation of May 23
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2023/05/Proactive-Presentation-18-May-2023-FINAL.pdf
This gives the location of the Morocco Licence and its terms. It confirms that PRD has a licence extended to 9 years being Mar-2028.
At the bottom of page 8, it references the extension to the first extension period (petroleum agreement number 2) and states that PRD: "satisfies drilling equipment 1st Extension period" and there is No increase in the $1.5m bank guarantee that rolls over.
At the start of the Second extension period the bank guarantee increases to $4.5m unless it is negotiated down.
The company states that it has met all its obligations of the licence so far so I don't believe the licence is at risk. The reason as far as I can see is that if they get another extension to the first extension period and declare commerciality within this, they delay the additional bank guarantee, currently $4.5m, that they need to provide when entering the second extension period. The company successfully reduced the bank guarantee required for the first extension period so there is no reason to say that the $4.5m could not be reduced if and when it falls due. Further if commerciality is proved (or CM generates revenue) then this should be covered if indeed it is required. ONHYM have to date been nothing but supportive of exploration companies operating in their country. Sound Energy (in my view) lost a lot of credibility with their proclamation of a giant gas find and golden tickets for shareholders, only to nearly go bust a year or so later , when its claims were seen to be over exaggerated. Further, Sound had tax payment disputes with the tax authority. ONHYM and the Moroccan government have stuck with Sound and have allowed it time to sort out its mess. So IMV I think the worries about the PRD licence extension and ONHYM "doing the dirty" are unfounded.
I'm not normally one for advocating extra cost, but when it is a multimillion dollar a year operation, would 50k on a bit of support help? Or just get in the way and give an extra management burden? On share sales, this could be viewed as transferring wealth from the impatient to the patient.
Jimmy23 just a quick question excuse my ignorance but surely the company should have find out the maximum formation damage rather than the minimum ?
Is now the time for the BOD to bring in help to run the company? Clearly there are too many plates spinning all at once for PG and LB to deal with alone. Delay after delay, setback after setback, deadlines missed. It seems as though a lot of people are not happy with the constant disappointment (yes, not all can be attributed to the BOD, but a hell of a lot can be)
The kind of dumping of shares the last few days is akin to a heavily discounted placing that we've all been victim too.
Personally I think if we get one more delay/setback and there'll be much more dumping than we've ever seen and could see the SP at all time lows. My confidence is waning and I suspect I'm not alone, however I'm hopeful the sandjet testing procedure brings good news and with it a new confidence. Otherwise it could be curtains for PRD.
Liebe Grüße from a cold and wet Germany
“First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you." Nicholas Klein
We are almost there, hold on!
Page 58 concludes
"Perforating beyond the formation damage will be the greatest challenge"
Page 48
"Sandjet allows delivery of a greater number and depth of perforation well suited to thin and finely laminated turbidite reservoir which are not well suited to conventional perforation technologies which deliver a limited number of shallow perforations which can conceivably all line up with shale rather than sands or fail to reach undamaged target formations."
So the fact we knew and still used small guns confirms it was just to satisfy the testing deadline.
I've had a run through sdx and sound rns. There's no precedent of ONHYM being less than helpful and so granting of the 4th extension should be a formality
Although this setback is frustrating a guess its just another delay to sandjet testing as originally planned.
Hi mariachi.
You are correct, they did not go back and test the well.
Chariot will be drilling updip of that well starting in March.
Jimmy
Nidge have gone so should you.
While formation damage is a challenge, it doesn’t necessarily mean the end for a gas well. Operators take several steps to mitigate it:
Optimized Fluids: Carefully select drilling and completion fluids to minimize damage.
Reservoir Modeling: Understand the reservoir’s properties and tailor operations accordingly.
Stimulation Techniques: Use acidizing, hydraulic fracturing, or other methods to enhance permeability.
Well Cleanouts: Periodic well cleanouts can remove accumulated damage.
Production Optimization: Adjust production rates and drawdown to minimize skin effects1.
Case-by-Case Basis:
The severity of formation damage varies. Some wells may experience minor skin effects, while others face more significant challenges.
Skilled engineers assess each situation and decide on appropriate actions.
In extreme cases, if the damage is irreversible or economically unviable to mitigate, operators might consider abandoning the well.
In summary, formation damage doesn’t automatically mean the end for a gas well. Proper management, monitoring, and intervention can help maintain well productivity despite the challenges posed by formation damage12.
My answer is 6.2 pence based on historic traits demonstrated with previous trading patterns of this stock.
Nigel
Thanks, I think that is a compliment!
You equally know I hope I was being tongue in cheek.
Since posting initially, I've often said geology ensures nothing is a slam dunk.
The research of GRH/KeithOz/Methodology and many others do point to possible positives that indicate interesting upside potential.
There is a Bayes centre at the University here - I was more stats and econometrics, when I wasn't being distracted by rugby and socialising.
As far as I can remember, they supposedly learned from their mistake and drilled LMS-2 in 2021. Found "gas reservoir" again, but said they needed to perforate and test.. Not sure that ever happened.
James, you have more than sufficient neurone density to comprehensively understand investment and therefore complex risk. I would prefer the term 'positive but with awareness of future risk'.
There is a turning point in every company, often multi-modal and not always Northwards!
I'm a big fan of Bayes, Huygens and less mathematically, Buffet.
I’m not a big rugby fan but don’t understand the apparent antipathy of so many England rugby fans towards Borthwick; if it wasn’t for one very dodgy decision just before the end against SA we could easily have won the World Cup last autumn!
Just to say: Morocco have been, and are, making every effort to attract international companies to invest in oil and gas. In no way would they wish to rock the boat by any underhand tactics, as implied by at least one person here today. That would scare off every company from having any dealings with them, and there are quite a number besides PRD. Sure, we'll get our permits etc. There will be no problem there. They desperately need the gas internally, and they have that nearby empty pipeline to export the gas. Both Paul and Lonny have built up decades of contacts /friendships/trust within Morocco.
eg https://energynews.africa/2023/09/28/morocco-oil-and-gas-summit-2023/
Ibiza
Was right with you until you evoked the England rugby team to be the one initiating the comeback.
Alas, with Borthwick they couldn't lave their own boots and worry about Saturday (particularly as I live in Scotland when not in London)!
Noting early.even Nigel seems to have turned positive.
Mistakes made but preference for Sandjet clear from outset. So let us see what it produces. May even buy a few more
Well, it’s all pretty clear that PRD’s future in Morocco and shareholders’ wealth hangs on a favourable decision by OHYM re. granting regulatory approval of the Guercif Petroleum Agreement Amendment #4, which is proposing to extend the Initial Period of the Guercif Petroleum Agreement to 5 June 2024. Without it Phase 2 testing ops cannot progress, teams and equipment involved, firm dates etc hang in the balance.
In all probability, imo, the matter will be sorted favourably and we hope quickly. As far as we know PG and LB have to date conducted themselves honourably in the pursuit of business within the Kingdom, built a solid business relationship and are trusted partners. You don’t ditch such agreements without risking your country’s reputation in worldly commercial matters.
And so we await news, patiently, nervously, confidently, whatever, all part of the rollercoaster journey.
Jimmy - did SDX overcome the issue?
I must admit i really do not understand the vitriol and quite frankly vicousness that goes on on these BB;s No one should suffer the abuse that GRH has had to suffer and besides the game is not yet over. If you like in Rugby parlance we are one try 7-0 down coming into the second third of the match. YEs i am down about 1/3 on my investment but that is all 1/3. I have not lost a third just down a third. It will be a loss if i cashed the whole lot in now.
The investors make their own decisions helped on the way by others who know a hell of a lot more about these things that i do but in the end of the day it is my money my decision and me who pushes to buy or sell. Others will advise me and i am far more likely to listen to rationed argument.
There are some on here who if invested in the company are completely bonkers. Those are the ones who think the company is a sham and the directors a bunch of shysters. Why are they bonkers mainly because i see no reason to be invested in a company if i thought it was a sham and the Dirs shysters. So why are they on this board. I do not waste my time or money on companies where i do not trust the directors and think it is a sham. Hence why i sold up on one company and took my medicine and blame myself i had suspicions about the Directors but did not listen to my own jungles drums. My fault my moey. When we hit the end of phase 3 drilling (end of match) maybe even phase two as that i think will decide phase 3 then you can shout about how great you are if you have won the match. Personally i do not go around gloating in other peoples failures. I have far better things to do.GLA, we have not lost yet just 7-0 down on the scoreboard and a lot of try line pressure. Come on England.
Others can read the thread and come to their own conclusions 🤷🏻
Wow!!! What a bargain to be able to buy more shares at this incredibly cheap price. I firmly believe with sand-jetting that the existing wells will flow and with MOU-5 to be drilled in the next few months and Cory Moruga and Ireland we have astounding multiple opportunities to propel the share price to new heights. I continue to add to my holdings.
Thanks Jimmy.
Sandjet will be testing intervals in MOU-3 and MOU-4 where current conventional wireline log interpretation is adversely impacted by possible formation damage caused by the requirement to drill over-balanced with heavy drilling mud to control the wells through highly mobile claystones.It seems that PG anticipated this:
Hi dakad,
The current testing problem seems similar to the SDX experience.
Paul has always stated that he needed to use sandjet technology to overcome the issue.
Page 21 of the ITR shows the thickness of the source rock at mou 1 and 3 so there is a huge amount of gas generated, after nearly three years since mou 1 he needs to get it done asap, and properly, no low cost short cuts,
Jimmy
Someone’s confident… RNS on the way maybe