Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
@Nick. I can see the change at the north end of the MOU-2 pad, particularly on 25th October - this appears to be independent from the changes in the surrounding landscape caused by rainfall. Assuming everything was working perfectly, it would be possible to drill 200m in a couple of days, plus a few hours each end to move the rig. I don't see an obvious sign that the rig is up, though. It would be a very nice extra to have MOU-2 completed - they did have both Purebore & Ultradrill drilling mud in the Guercif warehouse, so not impossible.
I would have thought that completing MOU-2 would be RNS-able, but with this lot, anything is possible. Guess we will find out in the next 2-3 weeks.
Part 2️⃣.
FINANCIAL
💥 Profitability
“The SLR CPR (January 2022) gives an unrisked NPV per BCF of discovered gas of US$1.99 million. This is based on a large-scale gas-to-power development using a gas price of US$9/mcf and results in a low net-back of just US$1.99/mcf.” and
“The SLR CPR gave an unrisked NPV of US$592 million for the net Best Estimate resources of 295 BCF” (CNG, for just one reservoir structure)
www.lse.co.uk/rns/PRD/drilling-and-operations-update-3dby10znl7nldot.html
and see ranges for multiple scenarios:
pp. 6 & 7, https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2021/09/19204501/PRD-Proactive-Presentation-Final-09.09.2021-1.pdf
💥 Tax environment.
“Fiscal terms in Morocco are attractive. The state royalty for gas production is only 5% and is applied after the first 10.6 BCF of net production to the operator. Corporation tax is levied at a rate of 31%. However, the Moroccan government also applies a 10-year ‘holiday’ before corporation tax is payable and any unused tax losses can be offset against the tax due.”
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2022/03/Predator-Oil-Gas-Corporate-update-7-March-2022-1.pdf
💥 Business environment & stability.
“Not only is Morocco an important market in its own right, it is also becoming the premier commercial gateway to Africa, as well as Africa’s bridge to Europe. Africa presents the single largest growth opportunity in the world”
https://www.gov.uk/government/publications/overseas-business-risk-morocco/overseas-business-risk-morocco
💥 Regulatory.
“Oil and Gas Regulation in Morocco: one of the most attractive schemes in the world”
https://www.cliffordchance.com/content/dam/cliffordchance/briefings/2014/03/oil-and-gas-regulation-in-morocco-one-of-the-most-attractive-schemes-in-the-world.pdf
I await your response - Keith (real person. relevant qualifications, extensive industry experience, both exploration & business development. And you?)
Part 1️⃣ - re-post from September, revised.
This bulletin board provides an environment for sensible adult discussion on all matters relating to PRD. All views should be considered, but nursery school one-line posts calling other posters silly names provide nothing.
I reiterate my view that an offtake agreement, conditional upon flows from two wells, has already been signed; that flow testing of MOU-1 & -3 is underway. I have admitted I was incorrect in my view that an RNS confirming start of testing would be released two weeks ago, and have stated last week why I think this is legally unnecessary - see those posts for details. I now suggest that there will be a 'grand slam' announcement early - mid December.
I do my best to present factual information, usually referenced, and if I speculate based on that, I try to give my reasoning for doing so. I reconfirm I would be delighted to consider alternative views, if you disagree with me, please post in detail your opinions, with the reasonable proviso that you also present the facts on which you base your views, and how you have extrapolated from those facts.
In particular, I would ask you to consider:
RESOURCE
💥 Areal extent.
MOU turbidites 30+km², Ma sands extent of 58km²:
https://www.lse.co.uk/rns/PRD/completion-of-mou-3-drilling-and-logging-77nekzdof9lxnu8.html and
MOU-NE (Titanosaurus) 126km²
p.9, https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2023/05/Proactive-Presentation-18-May-2023-FINAL.pdf
💥 Porosity & permeability.
“At deposition the independent studies indicated that these sediments were likely to have 35 - 40% porosity and permeabilities between 2000 and 5000 Md. Lack of compaction and consolidation suggests that poroperm conditions would not have been significantly impacted through burial and therefore good reservoir quality would potentially be retained, as supported by the post-well NuTech log analysis.“
https://www.lse.co.uk/rns/PRD/drilling-and-operations-update-3dby10znl7nldot.html
💥 Reservoir thickness.
MOU-1 testing of 22 reservoir intervals:
https://www.lse.co.uk/rns/PRD/operations-update-covzavfrw2aj6tq.html
43m in MOU-3:
https://www.lse.co.uk/rns/PRD/completion-of-mou-3-drilling-and-logging-77nekzdof9lxnu8.html
64m in MOU-4, plus Jurassic
https://www.lse.co.uk/rns/PRD/mou-4-update-41ps08lleqbs03n.html
💥 Overpressure
Significant overpressure in Ma sands MOU-4.
https://www.lse.co.uk/rns/PRD/interim-drilling-update-mou-3-a1ahzbsju1a49lu.html
and MOU-1 - chart, right side of p.13
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2021/09/19204501/PRD-Proactive-Presentation-Final-09.09.2021-1.pdf
💥 Flow per metre
In the Rharb basin (continuous with Guercif) reservoir sands of only 1m thickness flowed at more than 1mm cfgd, thicker reservoirs at higher flow rates per vertical metre:
https://www.reddit.com/r/PredatorOilandGasPRD/comment
CNG and petrol distribution companies in Morocco have been accused of anti-competitive activity and price gouging. They have now agreed to a consumer protection framework and paid penalties. Translated from Arabic:
"Nine hydrocarbon companies and their professional organizations managed to reach a conciliatory settlement with the Competition Council, after these companies reached on Thursday the approval of the Competition Council on reconciliation agreements that end the disputed procedures against them....
According to the reconciliation agreements, the companies concerned and their professional organization must commit to a set of commitments regarding their actions, in order to improve the competitive functioning of the hydrocarbon market in the future and to prevent the risks of compromising competition for the benefit of the consumer.
The Competition Council affirmed that the commitments made within the framework of this conciliatory procedure are of a 'mandatory nature', as the Council's services will monitor their implementation.
This involves the establishment of a conformity programme with competition law, which reflects the commitment of these companies, expressed at the highest level of responsibility within them, to respect competition rules, with the establishment of competitive risk maps within these companies and effective internal warning systems, as well as the appointment of an internal official from the managers of the enterprise to develop and monitor the conformity programme.
In order to enable the Council to ensure the competitive tracking of the markets concerned, especially with regard to the correlation between the selling prices of gas and gasoline to the public and the international prices of these refined products, the restorative undertakings provide for the preparation and transmission of a detailed situation that allows tracking the activity of supply, storage and distribution of gas and gasoline by each company separately."
https://anfapress.ma/%d8%aa%d8%b3%d9%88%d9%8a%d8%a9-%d8%b5%d9%84%d8%ad-%d8%a8%d9%8a%d9%86-%d8%b4%d8%b1%d9%83%d8%a7%d8%aa-%d8%a7%d9%84%d9%85%d8%ad%d8%b1%d9%88%d9%82%d8%a7%d8%aa-%d9%88%d9%85%d9%86%d8%b8%d9%85%d8%a7/
Jersy Oil & Gas this morning announced the sale of 30% of their Greater Buchan Area (GBA) to Serica Energy. It's interesting to compare the price / Bbl of this acquisition with the Cory Moruga deal.
JOG receive $19M, and are free carried for development - Serica pay for their own 30% of the field development plan, plus another 6% representing their share of JOG's free carry. The FDP is estimated at $850 - 950 M (this is deepwater offshore). So Serica's costs will total $325 - 361 M. Resource is 70MM Bbl, so 21MM attributable to Serica. Cost per bbl is therefore $15.5 - 17.2.
Cory Moruga is now $2M upfront (RNS 7th November) for 17M Bbl (p.11, 2022 Annual Report). The FDP requires up to 20 wells, at most $4M each. 17MM BBl for $82M is $4.8 per Bbl or less. Sounds like a good deal to me.
Shortshrift - I have read your recent posts here. It would seem to me that you are very keen to present negative information about Predator, and discredit other posters who share useful information, while signally failing to produce anything useful yourself.
I wonder why that might be?
The Cove deal was very interesting. PTTEP (Thai national energy co) won a protracted auction with a bid of $1.9 billion for the 8.5% stake in the Rovuma field owned by Cove Energy, at that time operated by majority owner Andarko. It has been mentioned by London brokers a couple of times as a model for a PRD deal (private correspondence). Cove Chairman at the time was Dr Stephen Staley.
Stephen was the first Chairman of PRD, and is still a shareholder.
So VB have increased their shareholding by 5.74%. Any ideas if this was an on-market purchase (if so why no effect on sp?), exercise of options (TR1 did not state this), or an acquisition of a stake from someone who has yet to submit their own TR1?
Let me fill that out a little, since it was me discussing possibilities with Graham. Please consider this to be thinking out loud, not a statement of fact, or even prediction.
What is considered a price-sensitive event requiring an RNS?
Not commencement of flow testing - it has already been announced that flow testing was to start imminently, and many of us at one stage believed that indeed it had started, despite the absence of an RNS to that effect.
What about signature of an MOU? Again, this has already been notified as being in late-stage preparation. This would be a non-legally binding agreement, almost certainly conditional upon the successful flow testing of two wells. Even though we assume this is in effect a detailed draft contract, it can reasonably be argued that it is not a price-sensitive event until it becomes effective, i.e. until finalisation of flow testing and conversion to a legal contract.
Our proposition is that the next announcement may be both completion of testing and a signed, binding, commercial agreement.
Everyone will now be asking when. I suggest you choose the date on which you believe testing started, allow 10 days for conventional testing of a reduced number of horizons for each well (20 days for those with limited maths skills), and decide if flow test results will be announced one well at a time or both. I have previously suggested testing started on 11/12th November and that at that date the MOU was with ONHYM for approval, but was ridiculed by the usual suspects. If I was correct, and results for both wells will be released together with signed contract details, the 'shock & awe' would occur during the first week of December. But as I said, that's just me thinking out loud. Think your own thoughts!
@Markie / Syd / Porters et al: Of course I would not post inside information even if I possessed it, which I do not. Therefore by definition what I have posted is speculation, for consideration and response by others. That speculation is based upon sensible ongoing discussions with a small group of PRD shareholders whom I conservatively estimate collectively to hold more shares than the PRD board of directors. They are all O & G and/or investment professionals able to make informed consideration of the PRD opportunity, and have taken the decision to back up their views with a substantial amount of their own money. Some of these people post on one or more of the social media, others choose not to.
I welcome opinions of others, and this board is here to encourage debate. However, I am curious as to what weight I should assign to your opinions. I have never seen from any of you an indication that you have specialist knowledge or experience, nor any point of view that is backed by logical analysis such that others can give it due consideration. I also suspect that anyone who consistently posts only negativity is unlikely to be an actual shareholder.
@Markie1970 - I know because people who have made contact with Paul have received a positive response from him. I hope you understand that I cannot make public the details of a private communication. This is nothing to do with inside information, just common politeness.
@Skittish. I have always said the big money will be made on a corporate transaction, not on the slow road to becoming a helium producer. Very impressive research - I hope people here are appreciative. A couple of questions:
* TPDC & HE1 are both looking for a gas in the Eyasi Basin - so it would make sense to pool exploration data, and this may be a simpler explanation. I would be 100% behind your interpretation of events if HE1's licences were changed to add hydrocarbons as well as just the current helium.
* Where do you think NHE fits into all this? Founder & largest shareholder Justyn Wood made his money finding oil further north in the EARS (also where Lorna worked with Tullow). NHE also has some prime ground at Eyasi. If you are correct on the hydrocarbons angle, NHE & HE1 could do some kind of licence area swap, or more likely, join forces. It could be either one large company working up both Rukwa & Eyasi; or else splitting the areas between them as two separate companies; or jointly selling off Rukwa (soon to be a proven play with three successful drills). The LSE/ASX listings could support any of these possibilities.
If pushed, I would put my money on one company, Lorna + Justyn expertise, dual listing to facilitate greater cash raising capability, going primarily after hydrocarbons, and selling off Rukwa to a big player in order to finance exploration at Eyasi. This would happen early next year after a joint Rukwa CPR.
Comments?
Following release of the 7th November RNS, I exchanged opinions with a small group of knowledgeable shareholders. Our views were about 80% in agreement -
* The T&T news had come earlier than expected, an immediate news release was necessitated, and it was thought advisable to mention the status of operations in Morocco, even though this was a little premature.
* If all clearances for testing were in place, and equipment and crews were available, you would not waste time and money leaving things on hold, but be testing at the earliest opportunity. If that were to be more than a week away, you would demobilise and save money.
* The only hold up was stated to be the MOU. Again, you would not be mentioning this in this way unless it was pretty much agreed – our collective view was that it was just awaiting ONHYM sign-off.
The conclusion was that the next RNS announcing an agreed MOU and commencement of testing would be either the same week (ie by Friday 10th), or the following week just ended – all agreed that something would have published by now, and most are perplexed that nothing has been.
After a further round of discussion over the last couple of days, the general view is that the delay is caused by one of two reasons – either ONHYM need to seek higher approval (why? - see my post of 26th October 09.03 - https://www.lse.co.uk/profiles/keithoz/?page=3 ) or that this offtake agreement is now part of a larger and more comprehensive arrangement.
Quite a few folk have contacted the company to complain about the ambiguity of recent news releases, the apparent lack of coherent strategy, and the undefined or missed timetables. I understand that Paul has taken this on board, so I am hopeful of something more definitive being issued shortly – exactly when, I am now reluctant to guess.
In short, it is understood that expectations have not been met, but there is good reason for a delay. To those feeling concerned, may I remind you:
* Paul has more knowledge and experience of Moroccan hydrocarbon geology than anyone on Earth.
* Lonny has more experience of gas sales into the Moroccan market than anyone on Earth.
* Lonny & Moyra have drilled more gas wells in Morocco than anyone on Earth, 85% of which have found gas, which is an extraordinary record.
* Irrespective of testing, there is one whole lot of gas at Guercif.
* The Moroccan & European markets are in dire need of gas supply.
* Paul & Lonny have substantial PRD shareholdings and options, their objectives are aligned with ours.
* The NEDs, who have relevant O&G deal negotiation experience, have options that vest specifically on release of MOU-3 test results.
As always in O & G exploration, a little more patience is required. I do sympathise, being a somewhat impatient person myself 😕.
Some more on X today:
CUBE:
"Another savvy commentator feeling that events in #Guercif #Prd are crescendoing 👇 @PredatorOilGas have alluded in *multiple* rns that an MoU for initial cng off-take is pending/imminent. This will be the ground level catalyst for MOU3+ test and MOU4 appraisal 🦖
This is BIG."
Jasper13:
"#PRD let’s keep this simple …
MoU signed and announced this week, testing commenced.
Share price starts to re-rate. 📈
The size of the prize starts to be revealed.
Exit deal for Morocco. $$.."
Louis10 on lse 8 Nov 2023 20:34:
"I sold yesterday".
Even simpler, and certainly cheaper than flying to Morocco from Australia, is to read the recent RNSs, understand what they are saying, work out what procedures need to be followed, and know how long it takes to get things done. Thinly veiled suggestions of inside information are not necessary, it's all there out in the open. It will be an interesting week.
Cube agrees: https://twitter.com/__The_Cube__/status/1723770676933263444
"Imagine in next day or so #PRD release an rns detailing an MoU with a major Moroccan off-taker of gas.
Imagine the testing of the Moulouya fan/MOU3 is detailed to either have begun already or due to begin immediately.
Imagine the look on the faces of those sold short."
Takes care to be totally anonymous - major red flag. From his biography:
" I studied at University in London and, since then, I've been all over the world."
Which University? Was he actually enrolled on a course? If so, studying hat? Did he get a qualification? Doing what all over the world? Sitting in girlie bars smoking a bong?
"I know quite a bit about leasing mineral rights and obtaining government licences and permits, plus I am very familiar with the process of acquiring seismic, then drilling, completing and placing into production oil and gas wells."
Highly unlikely - all of these are separate specialist jobs. What is 'quite a bit'? What does 'very familiar with the process' mean? Never actually done any of this, but watched a couple of Youtube videos?
"I'm married and live with my wife and our cat".
Me too, but I don't try to fleece people for £1200 a year by telling them to buy on spud and sell before TD. Truly laughable.