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(Sharecast News) - Jersey-based Predator Oil & Gas Holdings updated the market on its drilling plans for the Guercif Permits I, II, III and IV, onshore Morocco on Monday.
The London-listed firm owns 75% of the permits and operates Guercif in joint venture with the Office National des Hydrocarbures et des Mines (ONHYM), acting on behalf of the state.
It said its wholly-owned subsidiary Predator Gas Ventures has entered into a rig option agreement with Star Valley Drilling, a Canadian drilling company currently undertaking an extensive drilling programme for SDX Energy in the Rharb Basin west of the Guercif, using its Rig No. 101.
The option was to 31 January, unless otherwise mutually agreed by the parties, to allow for negotiation and execution of a legally binding rig contract.
Predator said the agreement provided for a rig mobilisation date within a window between 15 March and 30 April 2020, also unless otherwise agreed by mutual consent of the parties.
The initial drilling programme would comprise the drilling of the Moulouya-1 Prospect, subject to all regulatory consents and approvals, to a depth of 2,000 metres.
It said the drilling rig mobilisation and drilling operations were expected to take up to 30 days.
Completion of the first well would release $1m of Predator Gas Ventures' $1.5m bank guarantee with ONHYM, subject to final delivery of all the data from the well to ONHYM.
At Predator Gas Ventures' sole option, and subject to ONHYM approval and all regulatory consents being received, Predator said its subsidiary would have the option to extend the drilling programme by the drilling of either an appraisal well, if required, or a follow-up exploration well to a depth of 2,000 metres, to capitalise on "significantly reduced" mobilisation and well services costs attributable to having an active rig available for immediate use.
A further update in 2020 would be given on the progress of the finalising of the commercial terms for the rig contract, which would include Predator Gas Ventures' contribution to mobilisation and demobilisation costs.
"This is another significant step in the company's strategy to develop shallow gas in Morocco adjacent to infrastructure as a greener contribution to reducing Morocco's carbon footprint," said Predator Oil & Gas chief executive officer Paul Griffiths.
"Morocco is re-entering an exciting period of sustained drilling activity for gas, with a 12-well drilling programme having commenced in the Rharb Basin to the west and other potential wells being considered to the south of us, where several companies are hoping to evaluate Triassic Tagi gas potential.
"The company's gas prospects are located at the central core of this activity and the Guercif licence area offers us attractive running room with multiple prospects and leads to test all the gas plays currently being evaluated for drilling around us."
At 0952 GMT, shares in Predator Oil & Gas Holdings were up 10.53% at 5.25p.
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