Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Based on the Jan 3rd update the only committed deliverable I’m aware of is MOU-1 testing in Q2. Was originally Q1 but delayed due to Covid:
“MOU-1 testing is planned for Q2 2022 following the anticipated relaxation of COVID travel restrictions in Morocco. The Company is fully funded to carry out an extended rig-less testing programme.“
In terms of Aim admission - was mentioned back in Sept but nothing since. MOU-4/5/NE are all contingent on funding of some kind.
There was a shifting of priorities due to souring of Algeria-Morocco relationship and general energy crisis - testing MOU-1 is all about fastest route to production.
Obviously a lot more has happened to geopolitical landscape since, who knows what twists await us in the next update?
Most of the funding discussion in the past here has been about how best to proceed while minimising field / equity dilution impact.
In the last RNS Paul talked about ‘reversing into an entity wanting exposure’ if it provided ‘guaranteed accelerated exploitation of the full potential of Guercif’, essentially recognising that TIME is increasingly a significant factor due to the energy crisis.
If time was an important factor in January then it’s absolutely critical now. For this reason I think a JV deal is most likely, which will allow us to drill the additional prospects ASAP.
Not sure if this is right approach, but happy to trust the management on this one .
Chelwood, you are a hard man to please. ZPHR was the best performing AIM share of 2021!
In little over a year Zephyr has gone from cash shell to producer from it's non-op portfolio, which is still growing fast.
They've also successfully opened up a new basin with the huge upside potential that brings.
All now fully-funded.
To be fair, PG said in 13th Jan RNS:
“The Company's current public market capitalisation no longer reflects the value of its Guercif asset in terms of its development potential. Guercif represents one of the largest onshore licences in Morocco with gas prospectivity established by MOU-1.“
(Followed by 2-3 weeks of trading sideways).
The message that we are extremely undervalued is consistent. Maybe a few cheeky tweets rather than long, detailed RNS reports is the medium the market wants…
Nu Tech analysis was linked in the 15th Dec RNS
"Post well evaluation studies have now been completed that included state-of-the art log analysis carried out by NuTech in Houston, Texas. This has re-confirmed two zones for perforating and potential gas flow between 1,231 - 1,241 metres TVD KB and 1,276 - 1,300 metres TVD KB. Reservoir characterisation supports the presence of a submarine fan sequence with multiple thin-bedded higher permeability layers."
www.predatoroilandgas.com/loganalysis
I think it's worth pasting the bio from energy summit website here, provides an interesting insight into the current strategic vision (leaning ever greener):
About Mag Mell Energy Ireland Ltd
Mag Mell Energy Ireland Ltd is creating an ambitious floating storage and regasification project for the Celtic Sea which is also designed to include strategic gas storage capacity at Ram Head. The project provides a unique and bespoke essential energy supply to Ireland in the now widely accepted transition period from fossil fuel to green energy. Located beyond the horizon the units would not be visible from land and are designed to be both user and consumer friendly. Proposed storage facilities can convert eventually for use as a green hydrogen reservoir and for CO2 sequestration.
The Mag Mell project reinforces the business objectives of the wider organisation, the publicly listed Predator Oil & Gas Holdings Plc, as it continues to develop its Energy Transition projects in geographic regions emitting higher than average per capita CO2 emissions due to the burning of imported coal and oil for power generation and the production of ammonia.
In the Republic of Trinidad and Tobago a unique pilot project to sequestrate anthropogenic CO2 from an ammonia plant was successfully carried out.
In the Kingdom of Morocco the focus is on gas to replace imported fuel oil and coal and potentially to provide a source of well-site power generation for the production and subsurface storage of green hydrogen. The objective is to progressively substitute green hydrogen for gas consumption to improve and diversify security of energy supply. Low capital investment costs for gas, combined with low operating costs and an attractive fiscal regime, provides the economic case for producing green hydrogen at a competitive price for industry whilst sustaining a profitable business.
This is the pragmatic and practical way forward through the Energy Transition and Mag Mell Energy Ireland Ltd and its parent organisation are already successfully executing sustainable pilot projects capable of being a role model for small- and mid-cap companies to deliver transitional change towards green energy.
More promotional tweeting from Lonny
Predator subsidiary Mag Mell is the 'gold sponsor' of the (Irish) National Energy Summit 2022!
https://twitter.com/lonny1971/status/1488124074874314754?s=20&t=1QEfFDfdyP8iUctacmu97g
https://energysummit.ie/sponsors/
I think it's a bit of schadenfreude, given they screwed us over and are now down 70%.
My guess is that they stopped the PRD JV to save money, not because it was rubbish. Now they've raised fresh cash and are planning on starting up more EOR. But how and who with? PRD have exclusivity over T&T CO2 supply through their JV with Massy...
https://twitter.com/lonny1971/status/1486621236432187392?s=21
Rough start to the day for #CEG being down >70%. Not sure how they will be injecting CO2-EOR? They thought it was so bad that they unilaterally terminated our project. #PRD
Lonny speaks (to The Cube):
https://twitter.com/lonny1971/status/1484239690916110340?s=21
“CNG out of Guercif to industry has the potential to create much more cash in a much shorter period of time than G2P.“
A few people have suggested that Lonny needs to buy shares to show some faith in the stock.
A director cannot purchase shares while in possession of material non-public information.
Predator have explicitly told us they are involved in multiple discussions:-
- "The Company is currently negotiating a Memorandum of Understanding with a significant entity in the downstream marketing of gas" - 15th Dec RNS, in relation to Ireland
- "During the latter part of 2021 the Company has been reviewing a number of interesting options with local operators. The Company has presented a commercial model for partnering on CO2 EOR operations to each of these operators based on a sale of Predator Oil & Gas Trinidad Ltd into a new dedicated in-country CO2 EOR services operator. Discussions will continue during the early part of 2022." 15th Dec RNS, in relation to T&T
- Regarding Guercif, the latest RNS hint of "reversal into an entity wanting exposure to the Guercif opportunity", not to mention any industry offtake discussions that may be underway
I doubt that Lonny will be able to buy in the market anytime soon (unfortunately for him).
I'm pretty sure the tens of thousands of professional fund managers are and the thousands of sharp hedge fund and private equity players are not interested in this segment of the market - both because of ESG restrictions (yes, this is a pragmatic transition energy play, but ESG rules not that nuanced) and because the market cap is too small (they could not invest a meaningful amount close to current price, and equally could not then exit easily).
Therein lies the great opportunity for the retail investor right now, generally across Oil and Gas and more specifically in PRD.
(oops, ctd...)
In terms of optimising the shareholder returns on a time-weighted basis, partnering up with bigger player to explore the licence area more aggressively seems like PG's favoured route.
How much do you think they could sell their 75% interest in Guercif for outright?
I'll bet it's more than the current market cap.
MOU-4 , -5 and -NE are all mentioned in the RNS link for future work programme:
https://wp-predatoroilandgas-2020.s3.eu-west-2.amazonaws.com/media/2021/12/schedule.pdf
Revised plan (subject to potential JV) is to drill MOU-4 in May 2022 and test in June 2022;
Then drill MOU-5 or MOU-NE in June (labelled as contingency only)
Just an observation - pharma company Open Orphan (ORPH) are following this path of carving out their non-core assets into separate companies to better realise value (1 down, 3 to go). Their CEO, Cathal Friel, was previously the founder and Chairman of Fastnet Oil and Gas where he worked with Paul.