Member Info for KeithOz

Oh look, SOU have released the SV-101. What's next we all ask?

Paul's inclusion of a mention of a second rig in the last RNS could mean two things:

1. Just a threat to Star Valley to get their act together, or

2. They are seriously considering maximising value of the Guercif licences by using cash flow (from CNG, T & T and possibly an Irish upfront sum) to prove up a few more prospects before selling on. The study on costs of connection to the MEP supports this possibility. I would vote for this.

The question then is how easy is it to bring a new rig into Morocco? A nameless, faceless, person here with posting diarrhoea, assures us from his vast but unknown experience, that this is not practicable. I disagree. Here is the timetable for the importation of the Marriott #16 full-size O & G rig from Chesterfield, UK to Rukwa, Tanzania last year. This required 38 semitrailers (SV 101 uses only 5), and was shipped via the Suez Canal to Dar-es-Salaam. It was contracted to drill just two very shallow wells for ASX-listed Noble Helium, one of 500m, one of 850m.

02 Sep Rig mobilised from Chesterfield, Derbyshire

11 Sep Rig shipped from Hull on the MV Bohwa Tsingtao for 7000+km voyage

23 Sep Vessel queued for Suez Canal (remember there were transit problems)

08 Oct Arrived Dar-es-Salaam port, Customs clearance underway

21 Oct Rig on site, after a 900km journey to Rukwa over less than ideal roads

28 Oct During rigup, noted that mast was damaged in transit - awaiting spare parts

10 Nov Repairs underway

23 Nov Spud of 1st well.

Without the three weeks delay due to damage, everything could have been done in two months from contract signature to spud. Remote Tanzania is a lot more difficult to access than a site just off the main Morocco E-W motorway. Tarifa Spain to Tangier by ro-ro is 31km and takes an hour, Tangier to Guercif is 590km all by motorway, one or two days with a truck convoy. If you use the nearest port to Guercif (125km) you have the added advantage that Nador is a Freeport, jointly run by Spain (EU) and Morocco.

Conclusion - I will trust Paul & Lonny with the logistics - they do this stuff for a living, whereas someone here appears only to write cr@p for a living.

As usual, a deliberately biased view. The BCE RNS stated: "The most likely explanation for the poor performance IS A COMBINATION of residual reservoir damage in the upper section of the Upper PBS reservoir (where the sidetrack remains close to the original well bore which was invaded with drilling fluids) AND POOR PERMEABILITY IN THIS PARTICULAR AREA of the Erfelden field in the Lower PBS reservoir."

BCE has screwed up by drilling the sidetrack too close to the original hole, and into a reservoir section that wasn't going to flow much anyway, but let's not allow the facts to get in the way of a good negative spin.

Each time PRD has entered a new phase of the licence, new requirements have been negotiated. This may be happening again, but the stated requirements are currently as below.

Reference: ITR, p14. https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2024/01/Guercif_-ITR_20240124.pdf

Initial Period & Amendments 1 - 4. Already done:

"The Minimum Exploration Work Programme for the Initial Period was revised by Petroleum Agreement Amendment No. 2 to be replaced by two wells to a minimum depth of 1500 metres MD (satisfied by MOU-1 and MOU-3) and a third well to 2000 metres MD or top Middle Jurassic (satisfied by MOU-4). MOU-2 was an additional well suspended for possible re-entry at 1260m MD."

Next:

1st E.P.

The extension of the Initial exploration period and fulfilment of commitments means the 1st Extension Period will now last 17 months (36 months minus the 19 months already used in the extension of the Initial Exploration period to June 2024). The main focus of the 1st Extension Period is to undertake acquisition and processing of 200 km² 3D seismic over the main Tertiary targets including AVO and Rock Physics evaluations. Gravity and Magnetic modelling will be undertaken using existing data and development options will be assessed for gas discovered in the initial period (MOU-2 and MOU-3)"

So no drilling actually required in the 1st EP, but that does not mean that none will be done - existing plan for MOU-5 is likely to be carried out as confirmed in last RNS "The MOU-5 well will now commence drilling as soon as practical after entry into the First Extension Period ".

2nd E.P.

"The 1st Extension Period can be extended into a 2nd Extension Period of 30 months with an

anticipated commitment to acquire 400 km² 3D covering Jurassic Prospects to include AVO analysis and

the drilling of at least one well to 2750m to test the Jurassic potential. There are also commitments to

undertake Geological studies to integrate and understand PRD findings in a regional context and

determine whether CO2 and Waterflood EOR experience can be applied to boost long term productivity

of discoveries in the Guercif basin."

I would expect that the drilling requirement for the 2nd E.P. may actually be done in the 1st E.P. There are three possible ways to do this.

1. Extend the depth of MOU-5 from the currently-planned 800 - 1100m to 2750m. That would cost more money, but by then this could be obtained from multiple sources, and even if by way of a placing the share price would be much higher after gas flow results. This extended drill would then conveniently appraise the underlying Triassic strata.

2. Assuming MOU-5 had been drilled in the RNS as stated two weeks ago, drill either MOU-5NE or NW down to the Triassic as above.

3. Drill a completely different Jurassic prospect - there is a surprisingly large number of these shown in Fig 12, p.18 of the Feb 2020 SLR CPR, and on p.40 of the ITR.

..but they're not sure of which, or indeed any, gas. That's after 50 years of exploration and $125M spent. So how long and how much before the JAY team (who don't have any O & G experience) find something commercial? Who cares, let's just issue another 80,000,000 shares to enable 3 JAY directors to offload their 40% share of a company whose only synergy with the existing JAY is that it is in Greenland. As for 8.1 Bn boe, which management (without O & G experience) came up with that outlandish number? The only hydrocarbons found so far were in an oil-filled belemnite 😁, and they have the nerve to compare it to Prudhoe Bay & the Anadarko Basin?

O & W - Thanks for picking that up, I am adding confusion to the confusion 😁. The numbers I put in for the TRACS GIIP are the risked estimates, not the unrisked which I should have used for comparison. So:

Under TRACS, delete the line GIIP 23 / 93 / 267, and replace with

GIIP 53 / 212 / 606

The recoverable & net to PRD numbers are correct, as is the calculation of the difference between SLR & TRACS.

Thanks again.

It's a little frustrating to read on here conflicting numbers relating to Corrib South, and for many investors this must be confusing. With the caution that I am far less familiar with the Irish assets than I am with those in Morocco, I will try to explain the issues.

Both the producing Corrib field and the prospective Corrib South are part of the half-graben Slyne Basin, with centres 18km apart. The reservoir is the same for both – Triassic age Sherwood Sandstones. Both are sealed by the Upper Triassic Mercia salt and mudstones. Both have as the source rock Carboniferous age Westphalian coals & shales. Vermilion are operators of the Corrib field, and are very familiar with the local geology, and are the only likely partner for Predator. They not only get revenue for the gas, but extend the life of their fixed assets, thus compounding the value.

The potential confusion here has arisen because there are two CPRs available. Both of these are on the PRD website. The updated SLR CPR was published January 2020. For the purposes of last year's Prospectus, TRACs produced a separate CPR dated July 2023. imho TRACS are extremely conservative in their estimates for both Ireland & Morocco – for example, we have previously discussed here that TRACS numbers for the Guercif Jurassic carbonate prospect assume only a 50m thick reservoir, compared to PRD's estimate of 289m in the latest RNS.

There may also be some confusion over definitions: GIIP (gas initially in place) is the total amount that may be present in the prospect, but much of this will not be commercially recovered. This quantity is calculated by making assumptions on reservoir area & thickness, porosity, charge, etc. Various additional risk factors & assumptions are then applied to this number to come up with Prospective Resources – the volume of gas that could be expected to be commercial.

That is further split into P10, P50 & P90 – P10 is the largest number, and indicates that there is a 10% chance that this number will be achieved or exceeded. Similarly, P90 is the smallest number, representing a 90% chance that this volume will be achieved or exceeded. You have already guessed that P50 is the best estimate.

So what are the numbers? - I refer to p.241 of the SLR, and pp.58, 59 & 174 from the TRACS CPRs. All in BCF – P90, P50, P10

SLR 30% gcos (geological chance of success)

GIIP: 264 / 566 / 1130

Recoverable: 184 / 425 / 945

Net to PRD: 92 / 212.5 / 452.5

TRACS 44% gcos

GIIP: 23 / 93 / 267

Recoverable: 26.5 / 137.8 / 484.8

Net to PRD: 13.25 / 68.9 /242.4

The wider the range between P10 & P90, the greater the number of unknowns (guesses!) used in the calculation – x4.3 difference for SLR, x18.3 for TRACs - this reflects my concerns with TRACS. Take your pick!

... rather curious that SOU opened with the bid higher than the ask.

Sorry, my bad, the deal is with Afriquia Gaz, not Africa Gas as stated. AKWA is a Moroccan company that owns Afriquia, ACWA is Saudi, and unrelated

.

@Pescado - could you please post the link to this article, I believe it is incorrect in a number of respects - ACWA is not the same company as AKWA, and as far as I am aware, Afriquia Gaz (correct spelling) does not have a gas distribution agreement with SOU, but has a heads of agreement with PRD. Thanks.

I agree with Jimmy's comment below - this is a face-saving rescue by the powers that be. They had been trying to do a deal for a couple of years, only came up with Calvalley, which fell by the wayside. In effect SOU have just had their spend returned, valuing the resource at only 12 cents per mmcf. Much of this will be needed to pay down their outstanding debt.

The additional 'money' is conditional upon the Phase 2 going ahead, and is not a payment as some seem to believe, just a part carry on 2 drills & the estimated $330M for the 125km pipeline & associated equipment. They are now left as junior partners with little say in future development. SOU shareholders seem relieved that a deal has finally been struck, but the reality is that they are left with very little, and will still have to come up with substantial funding if Phase 2 goes ahead.

They may get some cash flow next year from the LNG operations, but there must be doubt that this will be enough to fund their Phase 2 obligations. I don't see this as an attractive risk / reward profile. 10-20p? Hmm. I think MunnieTorx got it right earlier - "Suspect see 20% bounce on Monday followed by a lot of confusion and then heavy selling. I'd keep well away from that"

PRD is not in such an unfortunate position. PRD has assets that after a successful flow test should provide rapid cashflow without the need for substantial investment. Full field equity. No debt. Huge upside from big prospects close to the MEP.

SDX - bought by Aleph 2022.

SOU - bought by Managem 2024.

CHAR - will be bought by Energean late 2024?

PRD - Morocco assets bought by ADNOC 2025?

The Hive? Give us a break. The last thing PRD needs is another bunch of traders jumping all over it. Go and play with crypto.

"SJ was (n)ever the primary method of Moroccan perforating when well planning was done, all it does is support the statement that after better understanding of the wells AFTER the damage caused by the drilling method and mud used" (My caps).

Date of presentation I quoted saying they were going to use Sandjet: 18 May 2023.

Completion of MOU-3: 27 June 2023

Completion of MOU-4: 11 July 2023

Yes, who to believe indeed?

A geology graduate of the Royal School of Mines, with 40+ years of subsurface experience, much of it in Morocco, and Executive Chairman of an LSE main market O & G exploration company.

or

A belligerent faceless and nameless individual who posts multiple times a day denigrating the company and its management; insults other posters; then claims is being victimised.

Life is full of difficult choices.

Https://www.youtube.com/watch?v=QdHMex84Utw

Paul Griffiths, 10m30s to 11m30s

"Over the last 12 months we've developed a better understanding of the wells and those particular zones that need testing, and we've found a new testing tool called Sandjet ... we believe we will get much better results than an ordinary penetrating tool, and it allows us to penetrate about 60m a section ... and we can do it at a fraction of the cost"

I assume everyone is aware that Sandjet perforation, based on Nutech reservoir evaluation, is currently under way at Guercif, but possibly do not know why that combination methodology is being used. Firstly, I just want to correct a statement made yesterday, relating to the potential use of Sandjet in the Cory Moruga wells -

"Why do we need SJ in T & T, they are simple re -completions aren’t they or is there well bore and reservoir damage there like in our Moroccan wells. You are aware I assume that SJ is a remedial perforating operation, thought of as the last shot to get HC flow through damaged formation and wellbore, before the only option left is a side track ?"

Sandjet can indeed be used as a remedial perforating option, although calling it the method of last resort is misleading. Sandjet has considerable advantages over conventional explosive perforation in a number of circumstances -

* it avoids compression and plasticization of the reservoir that can be caused by explosives.

* has greater penetration depth of the tunnel, giving better communication between the reservoir and the borehole.

* has greater accuracy, thus can be used to pinpoint thin reservoir intervals.

This was kindly posted here by BlackdogTaff on 29th August 2023, and is a direct quote from TD Tools (our Sandjet supplier) in response to questions that Taff asked them on behalf of PRD shareholders:

"Typically, the length of perforation is more than comparable explosives, but at a minimum, equal in length. The real advantage for sand jet perforating (SJP) is that the diameter of the tunnel increases with distance from the casing, while explosive perforations decrease in diameter with distance. For example, a 0.5” hole size in the casing is very common for both SJP and explosives. In the SJP tunnel the diameter increases in size from 1” to 2” in diameter at the end of the tunnel. In the case of explosives, 0.5” is as large as the tunnel will ever be and it decreases in diameter from there. When calculating contact area to the formation of the larger SJP perf tunnel there is often a factor of 10x more contact. This makes SJP especially attractive in hard or tight formations."

Nutech have devised an advanced system for the interpretation of borehole logs. While more expensive than conventional log analysis, it has much greater accuracy, and in particular can flag up potential producer horizons that may have otherwise been missed - either they are too thin to show up on conventional logs, or may have atypical mineralogy that obscures the petrophysical readings. Here's what the process involves:

https://www.nutechenergy.com/wp-content/uploads/2023/01/NuLook_Process_Outline_85x11.pdf

PRD believe that the existing Cory-Moruga wells have multiple potential reservoir horizons that have been missed by historical log analysis, will be located by Nutech, and will have enhanced flow from Sandjet perforation.

23rd July. King Mohammed's Silver Jubilee. I'm sure His Maj would be delighted to announce to his Nation during the jubilee speech that the progress under his beneficent rule is going to accelerate, now that just a few days before, vast quantities of natural gas have been proven to flow from his Nation's divinely-blessed earth.

I have considered carefully, and will no longer take any notice of GRH's postings. I will only follow the advice of one much beloved and overly frequent Bold poster, who has demonstrated phenomenal recent success with their investments:

15th May - sold a large slug of CHAR at the exact 2½ year low point.

16th May - bought 80,000 SQX @ 178p

23rd May - bought another 20,000 SQZ @ 179p, despite SQZ, solely a North Sea producer, being at risk of political interference, having an unsustainable dividend policy, and running a share 'buy back' scheme that is nothing of the kind - the shares are held in treasury, not cancelled. SQZ price Friday - 147p.

With a loss of £37,000 in just a month, who could fail to be impressed?

Good morning (for me). Don't know if anyone noticed, but SOU's buyer, Managem, is a subsidiary of Al Mada, a business conglomerate owned by Mohammed VI.

I have said on a number of occasions that the PRD share price is irrelevant, it is not related to the price that will be obtained on the sale of the Morocco assets. But for those who are fixated on the share price, it may well go up on Monday as the market realises that deals like this can happen for even relatively unattractive assets such as Tendrara.

Have a great weekend everybody.

Some here seem to have a rather circumscribed view of public relations. Maybe their exposure is via outfits such as Flagstaff, whose rather limited remit is to help promote small companies to small private investors. Outfits such as Camarco have a much more comprehensive function, providing coordinated communications not only with PIs, but with investment institutions; government departments (in multiple countries as required); influencing public opinion - again possibly in multiple countries; other corporate entities who may be interested in partnerships; or even defending the company in the event of a potential hostile acquisition.

This requires a very different approach to a small investor PR company, and greatly expanded skillsets. Camaco, together with their parent APCO, have these qualities in spades. Their appointment indicates that PRD are thinking ahead, and is part of a plan for transitioning from an obscure microcap into a much larger company interacting with a greater number of stakeholders.

As pointed out here earlier, Camarco can afford to pick and choose their clients: " We will only work on situations which fit our values and where we have the specific expertise to execute at the highest level".

Perhaps you recall a similar statement from PRD's new brokers, Fox-Davies Capital: "We actively target companies with strong management teams, high quality assets, and compelling growth potential."

I am delighted to have companies of this quality working as PRD's advisors.

Some of the expenditures being suggested here are clearly higher than reality. I'm not sure if this is ignorance or malfeasance.

RNS 12 Jan 24: "Total estimated gross costs for the workovers and for re-establishing Cory Moruga oil production facilities are forecast by the Company to be £500,000."

💲Not very much to worry about there, especially since it hasn't been spent yet.

RNS 07 Nov 23: "PRD at its discretion can advance the timing of implementation and execution of any or all of the elements of its proposed amended FDP if warranted."

💲So no problems if priority needed to be given to expenditure in Morocco, especially since T & T seems to be running more slowly than originally expected - in fact expenditure so far may just be for 6 month's salary for one manager, which will not be a lot in T & T.

RNS 05 Feb 24: "The majority of the critical long lead items required for drilling [MOU-5] are available from the Company's surplus well inventory stored in its Guercif warehouse, thereby potentially further reducing drilling costs."

💲That's likely to be around half the total cost of the well - they already have pallet loads of drilling mud, lots of casing, and a high-pressure wellhead, not sure about cement.

RNS 06 June 24: "Average well depths to penetrate the entire prospective interval are in the range 800 to 1100 metres Measured Depth. Estimated drilling time is 12 to 14 days."

💲So the actual rig & crew hire will not cost a lot, since it is a shallow drill and Star Valley now owe PRD a big favour after breaking the contract to drill April-May.

RNS 10 April 24: Last year's Admin costs were £3,224,721, but only £1,540,481 excluding share-based payments for options & warrants. This rather small figure included the non-recurring costs for two ITRs/Prospectus - £217,241.

💲PRD might possibly have got through £650K this year in G & A.

I would suggest that the doom & gloom merchants need to recalculate, then will need to move on to a different topic for their collective negativity.