Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Agree with all that, Rob…
There are a couple of Paul’s comments from the SR podcast which I think are definitely worth us all keeping in mind...
“The way it is for oil and gas companies… your market cap is always going to not reflect what the potential value of the company is… it only takes one well or one agreement to change that value and it will be changed overnight.”
“Morocco’s the focus... but do not underestimate the other potential value in the company [i.e. T&T and IRL] which could crystallise at any time over the next 12 months.”
Morning WB,
I posted this a few weeks back and I think it’s roughly correct:
“… re the issuance of shares owed to Paul and Lonny, by my calcs - taken from p55 of the 2021 Annual Report, p69 of the 2022 AR, and yesterday’s RNS [28/6/23] – the total shares owed to Paul and Lonny is 46,975,280 (500k to Lonny, the remainder to Paul). So, upon returning these shares next month, the TVR will be 473,378,698.”
In essence, you can see from the AR’s how many shares Paul and Lonny previously owned and then, from the RNS on 28th June, the fact that they have pretty much now loaned most of their shareholdings. So the facility for the directors to loan more shares (and so, in effect, to do a placing) is no longer available, hence the need for a prospectus over the coming weeks .
The new shares in issue equates to an ~11% increase which, in the grand scheme of things and considering everything that’s been achieved with the funds (MOU-3, MOU-4 etc), is a pretty acceptable level of dilution, IMO.
As a direct comparison, I think it’s worthwhile reviewing CHAR’s recent placing and OO which will also increase its shares in issue by (yet another) ~11%, principally for its new onshore licences which have significantly smaller potential volumes of gas than we have at Guercif. The total number of shares in issue at CHAR, post placing and OO, will be ~1.07Billion. The phrase GRH often uses is “issuing shares like confetti” – clearly, in comparison, PRD has been admirably frugal in this regard, I think.
O&W,
Just to add to what Jimmy's already said...
Paul mentioned the 1000ft gas column during the Proactive presentation in Sept 22 - see the bottom of slide 11 and also from 24m45s into his talk:
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2022/09/Proactive-Presentation-Final-8-September-2022-LATEST.pdf
https://youtu.be/e25SVlLdo3s
Evening affc21 (and Matt too),
You may be on to something there! I am, at least, very happy to confirm that my real name is not Billy Ray!!🤣
Intriguingly, though, and looking at your own name, affc21... are you sure we're not actually the same person??!🤔😁
Cheers
BRV / Chris 😎
GRH, please scrap my last message...
I've put something up on Twitter #PRD... so hopefully it'll get seen!
👓😎👓
Afternoon Bob...
It's a pleasure! (glad it's useful...)
I'm still 'keeping it in the day' as per your sage advice (thank you for that 👍)
ATB
BRV
Thanks Graham 👍
As for Twitter, would it be more widely seen on your feed, perhaps? (I only have about 2 followers😉!)
So please feel free to tweet it if you think that's a better option...?
ATB
BRV
And just a final thought…. as I think we’ll all agree, it’s been quite a week!
(On the back of quite a few months… and, indeed, quite a few years for many of us!)
We’re not (quite) there yet, of course, but the recent newsflow and Paul’s interview to round off the week does suggest that we’re now well on our way...
There have been a number of superb posts this week from our usual expert posters so many thanks to all. But I’d like to highlight just three in particular which really resonated with me and, IMO, speak volumes about where Predator finds itself at this present time.
I feel that these posts are significant not just because of what is said but - and perhaps most importantly - because of the quality, credibility and backgrounds of the posters themselves…
So particular thanks to Keith, Caterham and GRH...
These posts really do speak for themselves, IMO…
“Over the last few decades, I have used NPV & IRR to evaluate literally hundreds of projects, I would put those with an IRR of around 100% in the exceptional category. The G2P/G2EU example I used to give an NPV12 of £2.5Bn has an IRR of 386%. I have never seen such a high number, nor such a short payback period” [KeithOz]
“That is a very positive RNS. I have worked in O&G Exploration for over 30 years. I think the Jurassic test has potential to be one of the most globally significant discoveries of the last decade. Very pleased to see confirmation in RNS that the Jurassic will be tested.” [Caterham7]
“I cannot recall a more meaningful RNS, in all my investing decades” [GRH, post MOU-4 Update RNS that included the NuTech analysis]
Enjoy the rest of your weekend, all 😎
[cont…from 4m20s onwards]
“Then we moved onto MOU-4, and MOU-4 was more of a speculative well because we wanted to try and test an area of the Moulouya fan that wasn’t part of our original CPR resources and we also wanted to hit the Jurassic in the same well. So it meant that our well location on the Jurassic, our bottom-hole location on the Jurassic, wasn’t optimal, it was right at the edge of the structure. So all we wanted to prove was the validity of the play concept for the Jurassic.
We drilled that well in 7 or 8 days, so we learnt a lot of lessons from our drilling programme this year and how to drill wells quickly. We encountered our target, the Moulouya fan, and another target below the Moulouya fan that we didn’t anticipate was there, and then we went into the Jurassic. We were scheduled to TD the well at 1100m but we hadn’t reached the Jurassic carbonate by then and we decided to drill on until we found it. And we found it just below that at 1125-1130m.
So the significance of that was, it was a bit of a wing-and-a-prayer - the Jurassic - before we spudded that well, everybody liked the concept, but all it was was a concept. So when we completed that well we had VALIDATED THE CONCEPT, we’d VALIDATED THE SEAL, through NuTech we saw RESERVOIR DEVELOPMENT and also NuTech said there was also LIKELY GAS there. Very thin, because we’re right at the edge of the structure. Probably somewhere between 200 and 220m down-dip from the crest of the structure.
So although we’re excited by CNG development, Moulouya fan, and MOU-3 has basically UNDERPINNED OUR INITIAL CNG DEVELOPMENT, we are MORE THAN EXCITED by the Jurassic which is a brand new play, everybody that’s reviewed what we’ve done at present recognises the potential of the Jurassic structure. So, ideally, we’d be looking to appraise that this year, in a relatively cheap well because we can drill these wells in 7 or 8 days at most.
So, in summary… a FANTASTIC result for CNG initial development, but an UNEXPECTED HUGE UPSIDE [in the Jurassic] proven to be capable of being appraised shortly this year. So I’m VERY EXCITED for that. And that would be a gas-to-power project, potentially there’s just TOO MUCH GAS there for the CNG market.”
Morning all,
I’ve transcribed the main section of Paul’s chat with Proactive from yesterday, below for info…
[emphasis my own]
https://youtu.be/thyYwq0VXTA
[From 1m onwards:]
“It’s been a frenetic 6 weeks, or 8 weeks, since we spudded our... second well this year, MOU-3. And the purpose of these two wells we were drilling, MOU-3 and MOU-4, was to prove up what we had found in MOU-1 in 2021, what we had not quite reached in MOU-2 in January, and it’s been VERY SUCCESSFUL.
It’s been a series of surprises to be honest, because the first surprise we got when we started drilling MOU-3 was that we found shallow, high-pressure gas at around about 339-350m, which was never expected. So we had a [challenging?] time to control that in the well because the flow into the well was significant. We managed to do that, Lonny Baumgardner, our excellent drilling manager, Managing Director, managed to get that situation under control and we drilled on. And what was amazing about that well was that [in] every single target we passed through there were some indications of gas, and it confirmed to us that the overall structural picture that we had decided to test in this particular well was valid right from the top of the sequence to the bottom of the sequence. And, importantly, it showed that gas had migrated all the way up to the top of the section to 339m. So anything in contact with that charging system would be charged with gas. It still was a little bit of a difficult well through one particular section so it took us probably an extra 4 or 5 days to drill that well versus our original plan, but we got through it and we learnt a lot and we reached our TD.
Subsequently, we used NuTech in Houston to do the log analysis. And the reason for that is that we look at quite complicated reservoirs in terms of mineralogy in this area, it’s not quite the same mineralogy as Rharb and offshore. That’s not a negative but it just means that it’s a different set of interpretations that you have to introduce for a more sophisticated entity like NuTech. And also, the sands and intervals we were seeing were unconsolidated so were washed out in the well, so it’s very, very difficult sometimes to look at the conventional logs and interpret them, but when you pass it through a NuTech analysis then you get a much better flavour for what is there, which is what we did.
As a result of that we had 44m of likely gas sand based on the NuTech analysis which was FAR IN EXCESS OF OUR EXPECTATIONS. And we also had intervals from the lower part of the section, Moulouya fan, and through the middle part of the section, TGB-4, through TGB-6, also a new sand Ma1, Ma sand and, of course, the shallow high pressure gas. So, a PHENOMENAL well for us in terms of our expectations pre-drill, far out-weighed what we actually ended up with.”
[cont...]
Thanks to FiremanSam for sharing this link on Twitter:
“Shell Signs 12-Year Deal to Supply Morocco with Liquefied Natural Gas”
https://www.moroccoworldnews.com/2023/07/356475/shell-signs-12-year-deal-to-supply-morocco-with-liquefied-natural-gas
A few interesting snippets…
“While not disclosing financial details, the agreement signifies a long-term commitment between the two parties, the statement explains.”
A “long-term commitment” between Shell and Morocco is potentially interesting in terms of our potential M&A partners, especially with Shell’s focus on gas and its new CEO, Wael Sawan, being very vocal on committing Shell’s future to hydrocarbons with much less emphasis (and investment) on renewables. (His recent thinly veiled 'threat' to move Shell's listing to the US was also interesting, IMO, in terms of the UK's current attitude towards the O&G sector.)
“The supplied LNG will enable ONEE to operate two power stations in northern and eastern Morocco that previously relied on Algerian gas transported through the same pipeline.”
I think we’re all aware of another large potential source of (indigenous) gas that Morocco may soon be able to rely upon!😉
“ONEE aims to increase the share of gas in Morocco’s electricity mix as part of its efforts to achieve low-carbon goals. Official figures indicate that renewables accounted for 18% of the country's total electricity production last year, with gas representing only 1.6% and coal accounting for 72%.”
So a focus on gas and lots of capacity to replace the current reliance on coal.
Thanks Keith 👍👍👍
Via Twitter, see slide 21:
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2021/09/29105657/Webinar-Presentation-website-Version-28092021-Corrections-15.40pm.pdf
Note that there's a "MOU-NE Jurassic lookalike"... so there's at least one other potential monster!!!😎
Keith, thanks as ever.
In particular, I’d been pondering the merits of re-entering MOU-2 pre-CPR in order to potentially add extra sand thickness by hitting the basin sweet-spot, so thanks for clarifying that his won’t actually affect the volumetrics calculations. As you say, a nice option to consider for when we’re a bit further down the road…
Regarding drilling the Jurassic updip (point 3), I don’t actually have a comment but, you guessed it… yet another question! So thanks in advance for any thoughts you might have on this.
It was mooted that MOU-4 may be also targeting the Triassic but clearly this didn’t happen. However, with the Jurassic being significantly up-dip at the crestal location, would this imply that the Triassic will also be shallower at this location and hence may Paul and Lonny fancy doing another ‘2-for-1’ well and drilling beyond the Jurassic into the Triassic?
On slide 13 of the May 2023 Proactive presentation, the seismic pic suggests that there may be sands beneath the Jurassic… are these Triassic? (apologies if this is a numpty question… the fact that I’m even attempting to interpret seismic is a laughable concept tbh!).
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2023/05/Proactive-Presentation-18-May-2023-FINAL.pdf
I realise that, considering the stellar results to date from both the Tertiary and Jurassic, we’ve more than enough to be getting on with so I’m perhaps being a tad greedy here, but the prospect of also testing the Triassic prior to any potential M&A is an intriguing one...
Many thanks in advance
Cheers
BRV
Morning all,
GRH’s tweet is quite rightly bringing our attention to the fact that the primary focus of MOU-3 testing will be 43 METRES of sand.
So perhaps it’s worth just taking a step back and reminding ourselves of the flow rates from the off-set LAM-1 well that was highlighted in the September 2021 Proactive presentation (slide 16), this year’s annual report (p31), Methodology’s analysis of flow rates in Rharb basin wells (see table) and also in person by Paul/Lonny to attendees at the most recent Proactive presentation event in May this year.
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2021/09/19204501/PRD-Proactive-Presentation-Final-09.09.2021-1.pdf
https://www.reddit.com/r/PredatorOilandGasPRD/comments/t8ssg0/mou1_the_rharb_basin_net_pay_vs_well_flow_rate/
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2023/04/POGH-2022-Annual-Report.pdf
in summary, LAM-1 had only 1 METRE of net pay and yet flowed at a stabilised rate of 1.9mmcfgpd and 2.1mmcfgpd on an 18/64” choke and, as stated in the AR, “The well test data for the offset reference well confirmed that thinly bedded reservoir sands with poor conventional wireline log resolution and very low apparent gas saturations (35%) based only on conventional log analysis could flow gas at COMMERCIAL RATES for a CNG development. High resolution NuTech log analysis for MOU-1 gives a much truer representation of reservoir properties in the sands encountered in MOU-1 consistent with the gas deliverability achieved in the offset reference well.”
So 1 METRE of sand resulted in what would be COMMERCIAL flow rates for CNG… and, just to reiterate, we’ll be testing (as a minimum) 43 METRES!
GRH is, as ever, correct to stress that there are irreducible risks to any investment in PRD, but the margin of safety here to reach (and probably go well beyond) the minimum threshold for commerciality for a CNG development is staggeringly good, IMO. As per Keith’s recent valuations, the NPV12 for 10mmcfgpd for CNG is ~23p/share (more than double the current share price) with very (very!) significant upside of course.
Yesterday’s RNS reminded me somewhat of the MOU-1 well update RNS of 6/7/21 which the market didn’t like but on the back of which Nutech's analysis resulted in 295Bcf net contingent resources being assigned to the company. So the only thing that’s required now is a bit more patience, IMO - let Nutech, Paul and Lonny do their stuff over the coming weeks and all will be revealed…
The share price might be currently volatile but I’m personally very relaxed about my investment in Predator.
Finally, huge thanks, as ever, to Keith, GRH, Jimmy, Caterham etc for your usual brilliant posts 👍
Hi dickienicholls,
Paul talked about the licence relinquishment issue during the IMC presentation in Feb of this year, which I think nicely clarifies the situation:
https://youtu.be/7xbTMWdGHtQ
From 56m20s
“We already know what 25% we want to hand back. It’s such a big licence, 7500+km2, that there’s plenty of room in that licence to give back what we want to give back. So that isn’t an issue for us. We’d be quite happy to hand back 25% right now or in 3 months’ time, 6 months’ time or whenever.”
There was also another brief mention of this issue from 48m15s:
“We have to relinquish 25% of the licence this year but we have plenty of fallow areas to relinquish.”
Https://www.bbc.co.uk/news/business-66108553
Including a thinly veiled threat to move its listing to the US... which might just get the UK govt thinking more about encouraging O&G investment rather than killing it?
Morning Graham, Keith and all,
Well, I woke this morning thinking it’d be a relatively quiet day for PRD, at least in terms of newsflow (I’m not really taking much notice of the share price movements which, at this level, I consider to pretty irrelevant in the grand scheme of things…)
But all I can say is…. WOW!!!!
Tbh, I didn’t just fall off my chair… I think I may need smelling salts to revive me! 😉
Why? Simply because of this section in your post, GRH….
"If MOU4 is successful in its main objective...it could prove more than helpful to certain negotiations ( my speculation )
If MOU4 is successful in its Jurassic element...it could elevate PRD to levels of success beyond my own dreams
If MOU4 were to be targeting the TAGI
... and if it were to be successful there…
I simply WOULD NOT KNOW WHERE TO START TO PRICE THE EQUITY ."
[my emphasis]
Let’s be honest, if YOU’RE struggling to calculate how much PRD might be worth on a success case, Graham, (Tertiary + Jurassic + Triassic) then it must truly be off the chart… and then some!
And Keith, all your posts are absolutely superb. I honestly feel I should be sending you ‘tuition fees’ for your providing us all with a terrific education in geology...in fact, may I suggest you consider changing your avatar to ‘ProfKeithOz’!🤣
Huge thanks to you both. I’m fully aware that you don’t actually need to share any of the information and insights that you do with us mere mortals on the bb, so the fact that you do means that my simply saying ‘Thank You’ feels very inadequate. But I’ll say it anyway… THANK YOU.
Have a great day everyone
Drill baby, Drill!😎
BRV
MEM, really good point, thanks
Basically, "Too many cooks spoil the broth"...!
ATB
BRV
MEM,
Just a thought… (and I have absolutely no experience in this area, so please take this with a large pinch of salt)
If Guercif reveals itself to be truly Leviathan-esque (and then some) might we be looking at not just one future owner of the licence but, instead, a consortium of some of the world’s major O&G companies. This may have the added bonus of being of great political benefit to the KoM by forging strong allegiances with many different regions of the world.
So, imagine a consortium made up of, for example, companies from the US (Conocco-Phillips), UAE (NOC), Israel (NewMed) and Europe (Repsol). There’s huge financial fire-power in that group, plus extremely significant political benefits for Morocco thrown in for good measure.
(And this doesn’t mean, of course, that the process won’t be competitive… there may be multiple consortia!)
That might just keep everyone happy...?!
As I say, I could be talking utter twaddle… but fun to think about it 😎