Member Info for KeithOz

IJWT - methane burns in air at 2000 - 2700°C. Steel melts at 1370°C. I would guess that a 40ft container would last about 5 minutes.

IJWT - methane has a compressibility of 0.385%, so 10mmcfg would squash to 38,500 ft³. Don't know about Morocco, but the big artic cng tankers here in Oz are 12,000m³, smaller rigid trucks 4,800m³. At 35.4 ft³ to 1 m³, that's only one big tanker every 11 days, or a small one every 4 days. Not that noticeable pulling out from a rural location on to a busy motorway.

@Masterfly - I don't know Tim Wright and have not had professional dealings with Scorpion, so can only comment on the work he has produced for Predator. The Cory Moruga ITR was excellent and comprehensive in its coverage. The Guercif ITR was similarly well written, his methodology for volumetric estimation was extensive. The document construction was clearly designed to be able to drop in further data as it became available, so I would expect an update to follow very quickly after testing is concluded.

I have some reservations about the approach used in the MOU-5 helium estimations, but I am pretty sure that he was given a deliberately general brief - particularly since he was clearly not allowed to reveal data from MOU-3, nor reference earlier ONHYM data about nearby uranium deposits as a potential helium source.

Just spending a few minutes poking the trolls - and it worked.

Perhaps they realised that an EWT potentially nearing conclusion could pay for drilling & testing MOU-5. Just my guess of course.

Surely a huge flame at the top of a pole visible for miles beside the busy main E-W motorway would be an even bigger hint.

A 30-day extended well test at just 10mmcfgd - the lowest number mentioned in the 6th June RNS - at $12 per mcf would be worth $3,600,000. Shame to waste it.

Thank you to the genuinely knowledgeable for comments on my questions about the equipment on the MOU-3 pad. We are indeed lucky to have such a wide range of skills and experience on display in the posts here - long may it continue. It seems to be that the collective opinion is:

* The flare stack pictured is inadequate for flaring high pressure gas.

* The large blue object with both blue and yellow tubing (the latter indicating it is for natural gas) may be a unit for separating any residual gas from sandjet slurries, which is then piped to the small flaring stack.

* This may also possibly be a natural gas compressor.

* There is no large flare stack visible on site, and no flares have been seen. This could mean they have not found any gas / didn't expect any gas so didn't bother with the right equipment / they have done something else with the gas.

* The M.D. of TD tools, the Sandjet company, has kindly confirmed that Sandjet does not use a compressor, nor large pressure tanks, just a triplex pump (which we can see in the photos).

* The only acceptable alternative to flaring that I can think of is to capture the gas using one of the two large pieces of equipment that closely resemble compressors, and store it in the two large light green pressure tanks visible in several photos.

* Gas would then be trucked away as necessary - the photos were taken pre-perforation, hence no gas tankers visible.

I am sure there will be alternative views - if so, please give your detailed reasons for holding those views, otherwise it will be of little value to the rest of us. Thank you and have a lovely weekend.

Different adviserS (note plural) could have requested shares instead of cash based on:

1. "To show their alignment with the Company's strategy regarding the near-term drilling of MOU-5" -this is in the public domain, so any of the company's advisers.

2. "the assessment (which they have seen because they did the assessment) of the potential for helium in a large geological structure", i.e. specifically Scorpion.

3. knowledge already in the public domain that helium had been detected in MOU-3 and that an evaluation for potential of MOU-5 was under way - again, any of the company's advisers.

I don't see why this is an issue to some.

Thank you for the detailed input, Wacky. Cube on X also had a view -

"One answer could be that you are flow testing a well in order to proceed to CNG. Imagine having your CNG compressor lined up in advance might be useful. Of course, might simply be a compressor to keep the lavatory flush in tip top condition... We will undoubtedly find out soon."

Full text:

"Perhaps someone with experience of O & G engineering might take a look at Lonny's photos of 7th & 8th August https://x.com/lonny1971/status/1820865204730916878/photo/1 and https://x.com/lonny1971/status/1820865204730916878/photo/3

and let me know why the flaring stack is so small, and why there appear to be 2 compressors on site. I know one compressor is for Sandjet".

@Jasper - may I add to this. There have been issues with all the other Moroccan hopefuls, not just Chariot. I can use my new favourite emoji again.

😕 SDX, the only actual gas producer in the country, is in a slow death spiral brought on by the small puddles of gas that need constant new drilling, and the creeping takeover of Aleph. Doesn't look good after previous ONHYM support.

😕 Sound, after embarrassing declarations of vast amounts of gas years ago, has yet to produce anything, and has now been rescued by Managem - a mining, not an O & G company, that is owned by the Al Mada group, which just happens to be owned by the Moroccan royal family. There was clearly an instruction from above to save face, I suspect previous supporters at ONHYM were 'spoken to'.

😕 Europa, again backed by ONHYM, originally claimed to have 2TCF of gas in the Inizgane prospect, that was then reduced to 1TCF, then abandoned entirely by Europa.

😕😕😕 Let's not forget the Talsint affair, where Lone Star claimed to have found enough hydrocarbons to make Morocco self-sufficient. King Mohammed VI, newly on the throne, went on national TV to declare this great discovery would change Morocco's place on the world stage. There weren't any commercial hydrocarbons at Talsint, Lone Star were sued for fraud.

Hardly surprising that Predator & ONHYM are proceeding in a cautious and diligent manner, with independent validation of all results.

Paul Griffiths 14 July 2023, Proactive interview:

“I think there will always be misconceptions because in this day and age social media drives the results of all well results, not just ours, everybody. So the feeding frenzy for information quickly, instantly; the danger of that is our geological science, our drilling science, is never like that. You have to take all the data, assess it properly, and not make premature comments or premature decisions..... it takes time, and the danger is if you make too quick a decision it can backfire on you in the development stage.”

Some may remember this announcement on 01 Feb 2022 from SDX:

😕 “Production in Morocco in 2022 will be lower due to a decision not to immediately renew a five-year customer contract until we have better visibility on future gas supply”

They were unable to continue to supply their main customer since the initial gas flows from new wells were over-optimistically forecast and unsustainable, and the contract had a supply-or-pay clause to protect the customer from loss of supply. This major failure lead directly to the aborted merger with Tenaz, then adverse arrangements with Aleph, and ultimately to the current situation where they are only keeping their heads above water with the help of a loan shark.

There are lots of examples of the dangers of early release of results:

😕 Just last week - ASX-listed Elixir Energy extrapolated commercial gas low rates from its appropriately named Daydream-2 well, based on hurriedly-issued results from just one of six potential horizons. When the other five horizons failed to flow as expected, the share price tanked.

😕 In T & T, the what is now PRD's Cory-Moruga Snowcap-1 was drilled in 2011 by Parex Resources – they announced initial flow rates as high as 1,450 b/d and 6.2 Mmcfd gas that dropped quickly to zero. As you now know, that initial number was not sustained due to waxing issues that PRD are now resolving.

PRD are very sensibly working up a comprehensive testing and full flow assurance programme to ensure reliable and sustainable end-to-end performance:

🦖to protect themselves from the possibility of the above problems of early data release;

🦖to give Afriquia Gaz the necessary reassurance that they can supply up to 50mmcfgd on a sustainable basis, which would be a prerequisite for a GSA;

🦖to have comprehensive, independently reviewed data to give the strongest possible hand when negotiating a corporate sale or partial divestment.

If you don't know the specific technical meaning of 'flow assurance', look it up. PRD are doing things correctly. This is in your interests, assuming that you are in fact a shareholder.

Dave - I am sure there is more than enough gas to totally incinerate everybody.

Over 4 times as many posts as trades. Mostly cr@p not worth answering, but I will respond to three points.

* For Pete Brierley / Helpfull / Antivenom, a little knowledge can be a dangerous thing. Your little knowledge, presumably gained from kiddies' parties, is that helium rises. You don't seem to understand that helium is associated with thermogenic gas, which is found in the deeper reservoirs in Guercif, and that this gas has migrated to its present position. It is most likely that the helium has been generated from the radioactive decay of uranium-rich minerals originally of volcanic origin that have been deposited as sediments (therefore derived from elsewhere) in the Triassic, therefore directly beneath the Jurassic. It has been unable to rise further due to thick seals - maybe you know that both a trap and a seal are necessary for a gas reservoir. The shallower levels have biogenic gas, which is formed in situ, and are not associated with helium. Biogenic and thermogenic gas can be distinguished by carbon isotope analysis. The biogenic gas at Guercif does not contain thermogenic gas, so would not be expected to contain helium. So the negative point you are attempting to make has no foundation, since it is based on an incorrect supposition.

*Sandjet hasn't worked. This much-repeated refrain seems to be based solely on the absence of public data so far. A reminder: the LAM-1 borehole in the Gharb Basin happily produces gas from a reservoir analogous to MOU-3's Ma Sands. LAM-1 & MOU-3 were both drilled similarly overweight – an SG of 1.45 and 1.49 respectively, and as a result, both had formation damage. I see no reason why the formation damage should be significantly more extensive in MOU-3, given directly comparable drilling fluid pressures into geologically comparable strata. LAM-1 was conventionally perforated through 12” of formation damage, and produced up to 10 mmcfgd from a 4m thick reservoir. SandJet can penetrate up to 60” of formation damage, and was initially being run over 104m gross, my guess at least a net 30-50m of reservoir, around 10x that of LAM-1. The programme is now being extended - you would have to be very foolish to extend a prigramme that has proven not to work. But let's ignore all this and say Sandjet must be useless.

*IJWT. Lots of people live well beyond their 70's. I know the ages of quite a few investors in PRD, some are indeed 70+, but it is not they who are complaining - they have many decades of investing experience and understand that delays happen. It is the young'uns who are impatient and doing all the moaning. On a similar subject, congratulations on having a job with the most perfect company on earth. I have worked for three major multinationals and a number of smaller and dodgier outfits. I have never known any project, large or small, that has run both on schedule and within budget.

For clarification, I'm not predicting anything, just passing on that there is a lot of whispering going on suggesting an announcement on 8th or 9th. If I post facts, I reference them; if I post calculations, I show my assumptions & workings. This is not inside information, purely gossip, which may be incorrect, so I will not reveal the source(s). I put this on another channel a few minutes ago concerning the possibility of an accretive placing instead of cash from a deal with Afriquia - the latter still being a possibility.

"Even if there was, it would be better than a Novum placing - it is likely that Jerry [Keen, Oak Secs] would invite his chums to take part, some of them are already big PRD shareholders, so there would be little selling down of placing shares. It could actually be a good thing, if it was only for a few £M and the proceeds were applied to drilling MOU-5 straight away, rather than leaving a question mark hanging over operations [until next year]. Some people seemed very happy the last couple of days - perhaps they will turn out to be beneficiaries."

I can't get back to sleep, so:

*I suspect Sefton 82 is rather fond of horses. Google: Sefton / Horse of the year / 1982. Presumably ex B & Rs?

*Spuds has written sense for possibly the first time.

*A little old fox is whispering secrets under the oak tree.

*They say tomorrow never comes, but it is already tomorrow here. C U @ 7.

@Jimmy.

I think you misunderstand, I did not write the Oak Securities note. If you have questions about the content, I suggest you contact Jerry Keen on 0207 488 7964, Jerry.Keen @oak-securities.com.

I tried to address the Oak valuation issue yesterday, let me repeat the bit about valuation per share, then waffle on a bit more how they have applied risking to the valuation.

"Oak Secs have failed to mention that their valuation per share is not a calculation of gas price x gas volume / no. of shares. While many of their numbers are just such valuations of gas in place, the value per share is based upon an NPV10 calculation. As an example, the value of 1 mcf is given as $7, whereas the discounted value (NPV10) is closer to $2. While the NPV10 per share they have given is the correct result from this calculation, a potential buyer will not pay this amount - as I said a couple of days ago here, the buyer is taking on execution risk, financing, and still needs to make a profit. Based on similar deals, I would expect a buyer to pay somewhere in the 25 - 50% of NPV10 range, dependent upon royalties, stub equity, competition from other buyers & Paul's negotiating skills."

Now, what is the effect of risking? They have gone with a 12% c.o.s., based on the original ITR which was issued before further work by PRD on defining source rock & reservoir characteristics, which has raised PRD's internal c.o.s. estimate to 50%. Oak have then halved the overall c.o.s. for helium to 6%, given the greater unknowns. So the value of their P50 recoverable net to PRD has been reduced 8.3-fold (100/12) and their helium P50 recoverable net to PRD has been reduced 16.7-fold (100/6).

In the event of drilling success, the risked value per share has to be multiplied by 8.3 for the methane component and by 16.7 for the helium component. So: a success case gives an UNRISKED value per share of £9.25 for the methane (£1.11 x 8.3), plus £6.00 (36p x 16.7) for the helium, giving a total unrisked NPV10 value of £15.25 per share. Using the likely buyer range from my 2nd paragraph, that gives a purchase price of £3.81p to £7.62p per share, of course just for MOU-5.

Please note all assumptions are Oak's, not mine. I am just trying to translate their poorly-articulated note.

BRV - re T & T, a reminder that in the Interims, under New Ventures, was "Onshore Trinidad - Acquisition of producing fields", contingent upon cash generation from a sale of Morocco assets or cashflow from Cory Moruga.