TIDMPRD
RNS Number : 9056Z
Predator Oil & Gas Holdings PLC
20 September 2022
FOR IMMEDIATE RELEASE
20 September 2022
Predator Oil & Gas Holdings Plc / Index: LSE / Epic: PRD /
Sector: Oil & Gas
Predator Oil & Gas Holdings Plc
("Predator" or the "Company" and together with its subsidiaries
"the Group")
Report and Interim Financial Statements for the 6 months to 30
June 2022
Financial highlights:
-- Loss from operations for the 6 months period is GBP599,789
(2021: full year Loss of GBP1,398,821).
-- Cash balance, at period end of GBP1,549,434 (2021 year end: GBP1,523,035).
-- A further GBP1,235,107 (US$1,500,000) held as restricted cash
and GBP654,073 by way of a loan to FRAM Exploration Trinidad Ltd.
for the investment in the Pilot CO2 EOR Project .
-- GBP1,035,000 (before expenses) raised through one Placing.
-- 8,855,486 share options issued exercisable at GBP0.0566.
-- No debt.
Operational highlights:
-- Geological desk-top studies for MOU-1 confirm potential for
unconsolidated sandstone reservoirs.
-- MOU-1 perforating programme revised to include new shallow gas interval.
-- Potential for biogenic in addition to thermogenic gas established.
-- Integration of MOU-1 drilling results with post-well seismic
mapping defines the "Moulouya Fan" covering over 30km(2).
-- MOU-2 drilling location finalised.
-- Environmental Impact Assessment for up to three new well
locations received regulatory approval.
-- Exclusivity over surplus liquid CO2 supply in Trinidad maintained until 2023.
-- Discussions advanced with Trinidadian operator for an
investment in the CO2 EOR business.
-- Mag Mell Floating Storage and Regassification Project
("FSRU") for the import of LNG from non-fracked gas presented at
Ireland's National Energy Summit and in the form of a "White Paper"
for circulation within the Irish Government as a contribution to
the security of energy supply debate.
-- Directorate changes resulted in Dr. Stephen Staley (Chairman)
and Mr. Louis Castro stepping down from
the Board and Mr. Tom Evans and Mr. Alistar Jury being appointed
as Non-executive directors. Mr. Paul Griffiths moved to Executive
Chairman and Mr. Lonny Baumgardner to Managing Director.
Post reporting date:
-- On the 12 July 2022, Novum Securities Limited ("Novum")
exercised the 24 May 2018 (which had the expiry date extended to 24
May 2023) and 17 February 2020 warrants issued by the Company,
whereby by the Company have allotted and issued a total of
4,149,210 new ordinary shares following the receipt of GBP143,253
relating to the subscription price.
-- On the 17 August 2022 GBP3,300,000 (before expenses) raised
through one Placing with the issue of 60,0000 Ordinary Shares of
5.5 pence each. 15 million existing shares along with voting rights
were loaned to the Company by a director Paul Griffiths under a
Stock Lending Agreement. The Company did not have sufficient
headroom to enable the issue and admission of all of the 60,000,000
Placing Shares which are required to be issued pursuant to the
Placing without the production of an FCA approved prospectus. The
Stock Lending Agreement ensured that the Company is fully funded
for its near-term Moroccan drilling programme and can meet its
proposed drilling schedule.
-- In connection with the fundraising, 3,600,000 warrants,
exercisable at 5.5p per new ordinary share with a 3 year expiry
from Admission were issued to Novum Securities Limited or their
nominees.
-- MOU-2 drilling programme progressed through the placing of
orders for long-lead well inventory and surveying of the drilling
location.
-- Preliminary MOU-2 drilling prognosis completed for well planning purposes.
-- Potential for up to 168 metres of gross reservoir section
identified at the MOU-2 drilling location.
Predator Oil & Gas Holdings Plc (PRD), the Jersey-based Oil
and Gas Company ("Predator" or "the Company") focussed on
near-term, high impact drilling for gas in Morocco is pleased to
announce its unaudited interim results for the six-month period
ended 30 June 2022.
Executive Chairman's Report
Dear Shareholder,
The first six months of 2022 has continued to be a busy period
for the Company as we concentrate the vast majority of our
resources on the high impact drilling for gas in Morocco to extend
the MOU-1 gas structure that we successfully established in 2021
with our first-ever operated well in Morocco.
2022 thus far has been dominated by the ramifications of the
Ukraine -Russia crisis which, in addition to the indefensible and
devastating humanitarian impact, has created an Energy Crisis of
epic proportions not seen ever before. As a result, reduction in
CO2 emissions to address climate change concerns have suffered a
set-back as several economies return to burning carbon-intensive
fuels such as coal and oil as gas supply is reduced and/or
re-directed through infrastructure location and capacity that was
never intended for its current purpose.
The security of gas supplies has been highlighted for many years
yet, due to failure to recognise the importance of an Energy
Transition focussed on "greener gas" and investing in
infrastructure, gas storage and the development of secure
indigenous gas and LNG entry points to provide diversity of supply
at times of high winter demand, policy makers and governments have
erroneously chosen to treat gas as another "dirty" fossil fuel and
obstruct investment in the natural gas business. Whilst this has
achieved short-term political advantage in addressing climate
change concerns it has created a previously unimaginable cost of
living crisis which will negatively impact hundreds of millions of
people. Let's make no mistake this is not due to the Ukraine-Russia
crisis but rather had its origins in a poor, ill-informed
understanding of the requirement for gas as the fuel of choice for
the Energy Transition to allow time for the roll-out of renewables
to totally fulfil the seasonal demand for energy and for unplanned
shocks created by global market forces and geopolitics.
Through its long-established activities the Company is well
positioned to help contribute to ameliorating the near-term impact
of the Energy Crisis in Morocco and Ireland.
In Morocco we have matured our plans for drilling MOU-2 to
appraise the Moulouya Fan, the distal edge of which was penetrated
by MOU-1 in 2021. Timing of drilling is coincidental with the sharp
rise in European wholesale gas prices. The option to develop
Compressed Natural Gas ("CNG") is ideally suited to the scattered
nature of the Moroccan industrial gas market, which lends itself to
deliveries by truck rather than fixed gas pipelines. Low
development costs, high gas prices and low taxation combined with
potentially large gas resources in the Moulouya Fan has the
potential to accelerate "First Gas" and to provide a sustainable
and secure indigenous source of gas. This will create excellent
profit margins whilst maintaining an affordable price for industry
that allows Moroccan industrial products to compete in the export
market represented by the European Union, where energy costs have
risen dramatically.
The Company decided to maintain control of its operations in
Morocco by not farming out before the drilling of MOU-2 and funding
its proposed drilling operations itself. Farming out would have
delayed the timing of drilling operations and would have resulted
in a disproportionate loss of potential shareholder value as
potential farminees used funding the well as leverage to secure
better commercial terms for themselves.
Ireland has been left particularly exposed by the developing
Energy Crisis. The country has no gas storage facilities; declining
indigenous gas production with a ban on new licences for gas
exploration; no LNG import terminal; and a reliance on one source
of imported gas through interconnectors with the United Kingdom.
For security of gas supply Ireland is now reliant on the generosity
of the United Kingdom Government placing it alongside the
requirements of its own population in an emergency where shortages
of winter gas may occur.
During the six months to date the Company has promoted its
options to address security of gas supply in Ireland by presenting
and sponsoring the National Energy Summit and through the issue of
a "White Paper" on the FSRUP LNG import option of non-fracked gas
("Mag Mell Project") which has been circulated to Government
Coalition Ministers, Gas Networks Ireland, EirGrid and the
Commission for the Regulation of Utilities amongst others at
national and local level. The Minister for the Department of the
Environment, Climate and Communications ("DECC") has acknowledged
receipt of the Mag Mell Project. Government Policy relates to the
import of fracked gas and does not mention non-fracked gas.
The Company has satisfied all requirements to advance the
development of its Corrib South and Ram Head assets offshore
Ireland, which include an undeveloped gas field, discovered gas and
a potential gas storage facility, to demonstrate that there are no
reasons why the successor authorisations cannot be awarded now.
Furthermore, the Mag Mell Project has been shown to be a viable
LNG import option that could be delivered in the near-term to
alleviate security of gas supply by using the existing Kinsale gas
pipeline to shore. The Company is liaising with Hoegh LNG on
technical solutions for Mag Mell and its downstream gas buyer to
better understand potential seasonal market volumes. It would be an
act of reckless ideological vandalism to decommission the Kinsale
pipeline to shore at this time of national energy emergency. The
Company continues to progress the regulatory process to advance the
Mag Mell Project through a cautious deployment of minimal cash
resources and personnel time. The Company takes the view that the
DECC criteria and rationale for delaying these projects any further
is fundamentally flawed and, in some cases, based on
misinformation. As a result of the potential consequences of this
the Company will clearly maintain its visibility in Ireland to be
in a position to take advantage of any action other operators may
or may not consider.
In Trinidad, the Company has focussed on seeking a local
in-country operator for an investment in its CO2 EOR expertise and
know-how. We are still the only company in Trinidad capable of
initiating CO2 EOR projects at this time. There is a recognition
that well productivity can be increased in mature onshore oil
fields by injecting CO2, as was the case for the Inniss-Trinity
Pilot CO2 EOR Project. The burden however of operating in Trinidad
needs to be shared with a local company to ensure an alignment of
commercial interests.
We await the publication of FRAM Exploration Trinidad Ltd.'s
parent company 2021 Audited Accounts to provide further due
diligence input into the background to the parent company's
rationale for prematurely terminating the Inniss-Trinity Pilot CO2
EOR Project. The comments of their auditors in respect of how this
event is described and treated in the published audited accounts
for 2021 will be extremely helpful.
Operational overview
Morocco
Following an assessment of the 2021 MOU-1 drilling results SLR
Consulting (Ireland) Ltd. ("SLR") provided a new Competent Persons
Report ("CPR"). The CPR comprises of an independent re-assessment
and valuation of the "Guercif MOU-4 Prospect" which is now
designated the Moulouya Fan. The distal edge of the Moulouya Fan
was penetrated by MOU-1 and now the proposed MOU-2 well will test
the core area of the fan where a gross reservoir section of up to
168 metres is potentially developed.
The gross Best Estimate resources, based on a conservative 66%
gas recovery over 13 years, is 393 BCF (295 BCF net attributable to
Predator's 75% interest). SLR indicate a High Estimate of 708 BCF
net attributable to Predator's 75% interest based on a higher GIIP
estimate for thicker reservoirs potentially to be encountered at
the MOU-2 well location.
The CPR has moved the pre-drill Prospective Resources to
Contingent Resources and defines the Best Estimate of 295 BCF net
to the Company's 75% interest to be "potentially recoverable from a
known accumulation by the application of a development
project".
The definition of Contingent Resources has resulted in an ENPV
of US$148 million based on 25% of the 295 BCF (74 BCF) of the net
resources attributable to the Company's 75% interest. The 25%
chance of proceeding to development reflects the remaining
production, transport, legal, contractual and environmental issues
relating to a large-scale gas-to-power development. Unrisked ENPV
is US$592 million. The CPR states that "the chance of commerciality
for a pilot Compressed Natural Gas ("CNG") development supplying
lower volumes of gas to industrial markets is likely to be
considerably higher", based on a higher reported average gas price
to the Moroccan industry of US$11.40/mcf in 2021.
Post-MOU-1 geological studies have now been completed. These
have helped calibrate and understand better the conventional
wireline logs acquired at the time of drilling MOU-1, which were
influenced by poor borehole conditions, and the NuTech higher
resolution petrophysical logs interpreted at a later date. The
potential for excellent reservoir quality in thinly laminated,
unconsolidated sands has been recognised. A previously over-looked
shallow section in MOU-1 has been interpreted as probably
gas-bearing and will now be included in the MOU-1 perforating and
testing programme.
Geochemical analysis of MOU-1 well cuttings have established a
thermogenic gas source but also a potential additional biogenic gas
source.
Post-well evaluation of the MOU-1 data has been important for
re-evaluating the MOU-1 drilling programme to revise the drilling
mud system to be used for MOU-2 to minimise the effect on
unconsolidated sands and reduce the impact of high mud weights to
control higher than anticipated formation pressures. Potentially
these are related to the presence of a significant gas column in
over-pressured reservoirs.
Integrating the desk top studies with the MOU-1 well results has
created a high degree of confidence in delineating the extent of
the Moulouya Fan over an area of at least 30km(2). As a result, the
combination of the gas flow rates to be potentially confirmed by
the MOU-1 testing programme and a possible MOU-2 testing programme
should be sufficient to initiate a pilot CNG development to supply
gas by road to the Moroccan industrial centres.
Ireland
During the period under review the Company has mainly focussed
on raising the public and Irish Government's awareness of the Mag
Mell FSRUP LNG gas import option. This was to demonstrate how Mag
Mell could address Ireland's security of gas supply.
The Company presented its alternative gas import option at the
National Energy Summit in Dublin in April 2022. A "White Paper" was
issued and circulated to politicians and all significant
stakeholders in the energy sector in Ireland. It demonstrated how
gas was needed to seasonally support the national electricity grid
when renewable energy was curtailed by weather conditions. This was
followed up by lobbying members of the Irish Dail in a series of
one-to-one meetings.
No further responses have been received from the DECC regarding
the Company's applications for successor authorisations for Corrib
South and Ram Head. The Company has satisfied all regulatory
requirements for the award of the successor authorisations.
The Company continues to make submissions to the DECC to delay
the decommissioning of the Kinsale gas pipeline to shore. Currently
the Minister for the DECC has not signed off on the decommissioning
of this vital piece of gas infrastructure, which if decommissioned
would further weaken Ireland's security of energy supply. The
Company's proposed Ram Head gas storage facility would be dependent
upon the Kinsale gas pipeline to shore remaining in place to
advance the date for the commissioning of such a storage facility.
Ireland has no gas storage facility and is clearly not contributing
at present to the wider energy security of the European Union
despite having the infrastructure and facilities to help with
ameliorating the Energy Crisis.
Trinidad
During the period under review the Company has focussed on
collecting and analysing data for a mature onshore producing oil
field and an undeveloped oil field with a view to assessing their
suitability for CO2 EOR operations.
A commercial proposal has been submitted to one local operator
for CO2 EOR operations in one of their fields involving an
investment into the Company's CO2 EOR business.
Separately, the Company has made a proposal to the Ministry of
Energy and Energy Industries ("MEEI") to develop miscible CO2 EOR
if awarded a production licence over an undeveloped oil field. It
is likely that this particular asset will be the subject of a Bid
Round in 2023. The Company will be well-placed to succeed in the
Bid Round as CO2 EOR forms an important consideration for future
agreed work programmes with the MEEI. The preference is to joint
venture with a local in-country operator to apply in a 2023 Bid
Round.
The Company's strategy in Trinidad is to defer any potential
participation in new projects until after the Moroccan drilling
programme has been successfully completed and the wells tested to
establish potential gas flow rates. At that time, the Company will
have numerous options to further develop its business supported by
potential near-term cash flow from a pilot CNG development. One
particularly attractive opportunity has been identified in Trinidad
and may be pursued through the MEEI if it becomes available after
the completion of Moroccan drilling.
Financial review
The Company reported an operating loss for the period to 30 June
2022 of GBP599,789 (GBP758,128 for the period to 30 June 2021). The
decrease in operating loss is mostly attributable to a positive
foreign exchange movement for the period to 30 June 2022 which was
GBP243,530 (loss on foreign exchange rate of GBP61,826 for the
period to 30 June 2021).
Administrative expenses for the period to 30 June 2022 also
included GBP131,297 (GBP86,730 for the period to 30 June 2021) fair
value adjustment to warrants and share options.
The Company is finishing the reporting period with cash reserves
of GBP 1,549,434 (GBP1,523,035 for the period to 30 June 2021) and
restricted cash of GBP 1,235,107 (GBP1,083,298 for the period ended
30 June 2021) in the form of the security deposit for the Guercif
Bank Guarantee in favour of ONHYM. The balance outstanding of the
loan by the Company to FRAM for the investment in the Pilot CO2 EOR
Project was GBP654,073 (GBP487,477 for the period to 30 June 2021)
at the end of the period to 30 June 2022.
During the period to 30 June 2022, we have completed one Placing
to raise GBP1,035,000 (before expenses) . As a result of these
transactions 11,500,000 new shares have been issued and the issued
share capital increased to 304,446,267 by the end of the period to
30 June 2022. Also, during the period, the Company received an
exercise notice from Novum in respect of warrants whereby Novum was
exercising the warrants issued on 24 May 2018 (which had the expiry
date extended to 24 May 2023) and 17 February 2020. On the 12 July
2022, following this notice, the Company allotted and issued the
total of 4,149,210 New Ordinary Shares following receipt of the
aggregate GBP143,253 subscription price from Novum.
Placing funds were to provide the working capital to fully fund
the Company's well planning operations in Morocco.
As a result of the transactions successfully concluded during
the period under review, the Company is well-capitalised, free of
debt and is in a position to deploy prudent levels of
administrative expenditure focussed on enhancing and promoting the
potential of the Company's portfolio.
COVID pandemic and Energy Crisis
The Company took all commensurate steps during the period under
review to minimise unnecessary capital expenditures and operating
costs in the event that COVID restrictions might be re-imposed at
some future date. The Energy Crisis is impacting the industry's
business operations worldwide as a result of rising inflation and
rising costs in respect of well services and well inventory. The
Company's management has managed this situation through continuing
to apply negotiating skills to reduce costs and by eliminating
unnecessary expenditures.
Maintaining adequate cash reserves and delivering a high impact
drilling programme in Morocco focussed on the opportunity to supply
gas to the Moroccan industrial market is a prudent risk-reward
proposition for our shareholders. Reducing expenditures in the
short-term in Trinidad and Ireland is also prudent in order to
focus resources on delivering this key value proposition in Morocco
for shareholders. This does not reduce the Company's strategic and
competitive advantages in Trinidad for CO2 EOR operations, where
exclusivity of liquid surplus CO2 supply has been maintained, nor
Ireland, where the Company currently offers a viable gas storage
project and a FSRU LNG gas import option. Continuing with
demonstrating the capability of delivering CO2 sequestration using
CO2 EOR technology in Trinidad is an important contribution to
helping to reduce CO2 emissions during the Energy Transition. These
strategic objectives are allowing the Company to demonstrate to
potential partners and investors its ability to perform and create
exciting business development opportunities compatible with the
requirements for an effective Energy Transition. This is even more
important to demonstrate now during the onset of the Energy Crisis
and the realisation of the practical requirement for a planned
Energy Transition.
Summary
During the period under review, the Company has successfully
achieved key well planning progress in Morocco within our strict
budget guidelines to maintain the ability to drill a high value
drilling target for gas in 2022.
De-risking the gas potential of the Guercif Basin in 2021 after
35 years without drilling activity, has set up a timely opportunity
in the context of the Energy Crisis to appraise, develop and
deliver gas to the Moroccan industrial gas market on very
favourable commercial terms and with manageable capital
requirements for a Company with our current market capitalisation.
Partnering with downstream off-takers of gas is a sensible solution
to reducing our financial requirements for developing and scaling
up our proposed CNG business model. The overriding objective of the
Company in 2022 is to deliver the MOU-2 drilling programme and the
perforating and testing of MOU-1 and MOU-2. Successful gas flow
rates at even a modest level from both wells would be sufficient to
initiate a pilot CNG project with the potential to deliver
operating revenues within 12 months of project inception.
In Trinidad we are firmly established as the country's only CO2
EOR services provider following the technical and operational
success of the Inniss-Trinity pilot CO2 EOR project and the
important lessons that have been learnt. The establishment by the
Government of Trinidad and Tobago of the Steering Committee for
Carbon Capture and CO2 EOR supports our efforts to partner with
indigenous, well-financed, onshore producers to provide ESG support
and credentials through CO2 sequestration and to provide secondary
recovery technology, expertise, and experience to increase profits
from mature fields. Our services will need to be funded by the
producers either with profit sharing arrangements or, preferably,
through a direct investment in our CO2 EOR business.
In Ireland we have an environmentally aware technical and
commercial solution to Ireland's lack of security and diversity of
gas supply. Regulators are aware of what the Mag Mell FSRU project
has to offer Ireland. Sentiment is being forced to adapt to the
realities of the Energy Crisis, spiralling energy costs and the
seasonal volatility in energy markets. The requirement for gas in
Ireland is a necessity for years to come and the Company is
well-positioned to seek partnerships with indigenous companies in
the Irish energy sector where our assets, expertise and specific
Irish offshore experience can be traded for a strong balance sheet
that allows us to close out opportunities with multi-nationals to
develop our niche strategic position in Ireland. This position has
been nurtured through unfashionable times to a point where the
"Energy Crisis" makes gas fashionable again. There is however no
guarantee that the current Minister for the DECC in Ireland will
address the current Energy Crisis in a pragmatic way and in the
public interest, preferring to make the case for greener renewable
energy that currently and in the near-term cannot resolve the
Energy Crisis.
During the period under review we have taken the opportunity,
when possible and advisable to do so, to raise funds in the public
markets. This is necessary for us to maintain our projects in good
standing and to strengthen our hand in commercial negotiations with
well services and well inventory suppliers and with potential end
users of gas in Morocco. Our management is under-valued in the
public markets based on what it has achieved with limited financial
resources. We have three strategically important projects on three
continents, managed by a small team of experienced professionals.
Post period, on 14 September 2022 the Company was trading at a 190%
premium to its original IPO share price despite COVID, Brexit, the
Energy Crisis and financial market volatility and after investing
prudently in value-creating projects and operations.
On behalf of the Board, I would like to thank our shareholders
for their patience and continued support of the Company through
what has been a turbulent period dominated by the emerging "Energy
Crisis". We look forward over the next 6 months to continue to make
positive progress in Morocco towards realising our objective of
executing high impact/high value drilling for gas and early
monetisation through an innovative pilot CNG development to supply
gas to Morocco's industrial users.
Paul Griffiths
Executive Chairman
Paul Griffiths, Executive Chairman of Predator, commented:
"As we have predicted for several years, security of energy
supply, particularly in relation to gas and its requirement for a
smooth and fair "Energy Transition", has become a critical
strategic issue for governments around the World as a consequence
of the Ukraine-Russia crisis. We had therefore built our asset
portfolio primarily based on "greener" gas in the knowledge that
pragmatism and practical realisation of the role of gas in
supporting the roll-out of renewable energy during the Energy
Transition would eventually prevail. Therefore, it comes as no
surprise to us that fossil fuels are back at the forefront of
helping to address the Energy Crisis. What is disappointing is that
many governments have turned back to carbon intensive fuels such as
coal and oil because the investment in additional gas
infrastructure and indigenous gas production was actively
discouraged.
We are excited to be progressing drilling for more gas in
Morocco to establish a near-term CNG development case. Revenue
generation will create the opportunity to upscale our proposed CNG
project with organically sourced funding from cash flow. The
anticipated high profit margins will give us flexibility and a
balance sheet to maintain our strategic presence in Ireland and
Trinidad and to expand to acquire other gas assets where we may be
able to add significant value by applying our same management
philosophy that we have applied to date."
This announcement contains inside information for the purposes
of Article 7 of the Regulation (EU) No 596/2014 on market abuse
For more information, please visit the Company's website at
www.predatoroilandgas.com :
Enquiries:
Predator Oil & Gas Holdings Plc Tel: +44 (0) 1534 834 600
Paul Griffiths Executive Chairman Info@predatoroilandgas.com
Lonny Baumgardner Managing Director
Novum Securities Limited Tel: +44 (0) 207 399 9425
Jon Belliss
Optiva Securities Limited Tel: +44 (0) 203 137 1902
Christian Dennis
Flagstaff Strategic and Investor Communications Tel: +44 (0) 207 129 1474
Tim Thompson predator@flagstaffcomms.com
Mark Edwards
Fergus Mellon
Notes to Editors:
Predator is operator of the Guercif Petroleum Agreement onshore
Morocco which is prospective for Tertiary gas in prospects less
than 10 kilometres from the Maghreb gas pipeline. The MOU-1 well
has been completed and a follow-up testing programme is being
finalised to coordinate with a further drilling programme beginning
in 2022.
Predator is seeking to further develop the remaining oil
reserves of Trinidad's mature onshore oil fields through the
application of CO2 EOR techniques and by sequestrating
anthropogenic carbon dioxide to produce "greener" oil.
In addition, Predator also owns and operates exploration and
appraisal assets in licensing options offshore Ireland, for which
successor authorisations have been applied for, adjoining
Vermilion's Corrib gas field in the Slyne Basin on the Atlantic
Margin and east of the decommissioned Kinsale gas field in the
Celtic Sea.
Predator has developed a Floating Storage and Regasification
Project ("FSRUP") for the import of LNG and its regassification for
Ireland and is also developing gas storage concepts to address
security of gas supply and volatility in gas prices during times of
peak gas demand.
The Company has a highly experienced management team with a
proven track record in operations in the oil and gas industry.
The interim management report and interim results are set out in
the following pages.
The Directors present their report and the unaudited
consolidated financial statements together with related notes, of
Predator Oil & Gas Holdings Plc and its subsidiaries ("the
Group") for the six months ended 30 June 2022. The statements have
been prepared in accordance with IAS 34 Interim Financial
Reporting. They do not include all the information required for a
complete set of IFRS financial statements. However, selected
explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in the
Group's financial position and performance since the last annual
consolidated financial statements as at the year ended 31 December
2021. The results for the period ended 30 June 2022 are unaudited.
These statements are in agreement with accounting records which
have been properly kept in accordance with Article 103 of the
Companies (Jersey) Law 1991.
Responsibility Statement
We confirm that to the best of our knowledge:
- The Interim Report has been prepared in accordance with
International Accounting Standards 34, Interim Financial Reporting,
as adopted by the EU and applicable law
- The condensed set of financial statements, which has been
prepared in accordance with the applicable set of accounting
standards, gives a true and fair view of the assets, liabilities,
financial position and profit or loss of the issuer, or the
undertakings included in the consolidation as a whole as required
by DTR 4.2.10
- The Interim Report includes a fair review of the information
required by DTR 4.2.7R of the Disclosure and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
set of interim financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year and
- The Interim Report includes a fair review of the information
required by DTR 4.2.8R of the Disclosure and Transparency Rules,
being the information required on related party transactions.
The Interim Report was approved by the Board of Directors and
the above responsibility statement was signed on its behalf by
Executive Chairman
COVID statement, Energy Crisis and global outlook
The six-month period ended 30 June 2022, has seen a significant
relaxation of COVID restrictions to the extent that they are no
longer having the same impact on travel, restrictions on
operations, commodity prices, financial markets and overall
investment sentiment. We must however remain vigilant in the event
that there is a further outbreak of COVID in the future. Businesses
have learnt now how to adapt to any potential COVID restrictions in
order to navigate through the challenges it poses.
The Energy Crisis has created new challenges in the form of
rising demand for services and equipment from the fossil fuel
industry after a period of COVID constrictions and down-sizing and
in response to climate change concerns and the Ukraine-Russia
crisis. This has led to acute cost inflation as the pool of
services and equipment has contracted. Supply chain delays for key
well equipment are to be expected as manufacturing output has been
curtailed by the loss of steel-making plants in Russia, through
sanctions, and in the Ukraine, through war and surplus inventory
being used up. Maintenance of key equipment is likely to have been
postponed and time will be required to make such equipment fully
operational again.
Public awareness of climate change concerns and unsustainable
accelerating levels of CO2 emissions is now fully developed. The
fossil fuel industry has been the primary focus of attention during
this time, given its high-profile current and historical
contribution to generating CO2 emissions through use by, largely,
third parties of its products. This has created a difficult
environment for attracting equity and debt finance as banks and
institutions react to pressure to disassociate themselves from
fossil fuel investments. This has resulted in reduced investment in
fossil fuel infrastructure, field development and exploration
drilling (needed to replace declining reserves). However, the
Energy Crisis created by the Ukraine-Russia tensions has changed
this landscape in the near-term with the result that investor
sentiment for the fossil fuel sector is returning as gas price
rises dominate the energy market. The Company is protected as it
may potentially become a near-term gas producer.
The Energy Transition has a key role to play in navigating the
way to lowering of CO2 emissions by gas replacing coal and oil. The
wind does not always blow, the sun does not always shine and large
amounts of electricity cannot yet be stored! It is therefore
inevitable that gas will be required for years to come as a back-up
energy supply when renewables cannot meet the demand. The fossil
fuel industry produces gas. The fossil fuel industry has the
knowledge and expertise to develop indigenous gas resources, LNG
import options, and the underground reservoirs for CO2
sequestration and gas storage. Investment should be focussed on
these aspects of the industry to address the "Energy Crisis" and
the Energy Transition.
The Energy Crisis has created volatility in the foreign exchange
markets with notably a significant depreciation of the value of
sterling versus the United States Dollar. The Company is required
to minimise as far as possible its exposure to spending United
States Dollars until revenues are established. This exposure will
be unavoidable for the Moroccan drilling programme and the Company
has allowed for this in its drilling and testing budgets.
Predator Oil & Gas Holdings
Plc
Condensed consolidated statement of comprehensive
income
For the 6 months to 30
June 2022
01.01.2022 01.01.2021 01.01.2021
to 30.06.2022 to 30.06.2021 to 31.12.2021
(unaudited) (unaudited) (audited)
Notes GBP GBP GBP
------------------------------ ------ --------------- --------------- ---------------
Administrative expenses 3 (599,789) (758,109) (1,398,802)
Operating loss (599,789) (758,109) (1,398,802)
Finance expense - (19) (19)
Loss for the period before
taxation (599,789) (758,128) (1,398,821)
Taxation - - -
Loss for the period after
taxation (599,789) (758,128) (1,398,821)
------------------------------ ------ --------------- --------------- ---------------
Other comprehensive income - - -
Total comprehensive loss
for the period attributable
to the owner of the parent (599,789) (758,128) (1,398,821)
------------------------------ ------ --------------- --------------- ---------------
Loss per share basic
and diluted (pence) 4 (0.2) (0.3) (0.5)
Condensed consolidated statement of financial
position
As at 30 June 2022
30.06.2022 31.12.2021
(unaudited) (audited)
Notes GBP GBP
---------------------------------------- ------- ------------ ------------
Non-current assets
Tangible fixed assets 6 4,666 5,884
Intangible asset 5 2,857,991 2,687,026
---------------------------------------- ------- ------------ ------------
2,862,657 2,692,910
Current assets
Trade and other receivables 7 1,905,811 1,737,258
Cash and cash equivalents 8 1,549,434 1,523,035
---------------------------------------- ------- ------------ ------------
3,455,245 3,260,293
Total assets 6,317,902 5,953,203
---------------------------------------- ------- ------------ ------------
Equity attributable to the owner
of the parent
Share capital 9 12,460,061 11,425,061
Reconstruction reserve 2,302,522 2,386,321
Warrants issuance cost (376,820) (376,820)
Share based payments reserve 860,997 729,700
Retained deficit (9,055,867) (8,456,078)
---------------------------------------- ------- ------------ ------------
Total equity 6,190,893 5,708,184
Current liabilities
Trade and other payables 10 127,009 245,019
---------------------------------------- ------- ------------ ------------
Total liabilities 127,009 245,019
---------------------------------------- ------- ------------ ------------
Total liabilities and equity 6,317,902 5,953,203
---------------------------------------- ------- ------------ ------------
Condensed consolidated statement of changes
in equity
For the 6 months to 30
June 2022
Attributable to owner of the parent
Warrants Share
Share Reconstruction issuance based Retained
Capital reserve cost reserve payments deficit Total
GBP GBP GBP GBP GBP GBP
(restated)* (restated)*
----------------------------- ----------- --------------- -------------- ---------- ------------ ----------
Balance at 31 December
2020 6,832,564 2,797,421 (208,887) 458,840 (7,054,229) 2,825,709
----------------------------- ----------- --------------- -------------- ---------- ------------ ----------
Loss for the period - - - - (758,128) (758,128)
Total comprehensive loss
for the period - - - - (758,128) (758,128)
----------------------------- ----------- --------------- -------------- ---------- ------------ ----------
Issue of ordinary share
capital 3,292,497 - - - - 3,292,497
Fair value movement of
share options - - - 62,364 - 62,364
Fair value of warrants - - - 195,327 - 195,327
Warrants issuance costs - - (170,961) - - (170,961)
Listing costs capitalised - (229,100) - - - (229,100)
Total transactions with
owners 3,292,497 (229,100) (170,961) 257,691 - 3,150,127
----------------------------- ----------- --------------- -------------- ---------- ------------ ----------
Balance at 30 June 2021 10,125,061 2,568,321 (379,848) 716,531 (7,812,357) 5,217,708
----------------------------- ----------- --------------- -------------- ---------- ------------ ----------
Loss for the period - - - - (640,693) (640,693)
Total comprehensive loss
for the period - - - (640,693) (640,693)
----------------------------- ----------- --------------- -------------- ---------- ------------ ----------
Issue of ordinary share
capital 1,292,503 - - - - 1,292,503
Listing costs capitalised - (182,000) - - - (182,000)
Fair value of share options - - 13,169 - 13,169
Exercised warrants 7,497 - 3,028 - (3,028) 7,497
Total transactions with
owners 1,300,000 (182,000) 3,028 13,169 (3,028) 1,131,169
----------------------------- ----------- --------------- -------------- ---------- ------------ ----------
Balance at 31 December
2021 11,425,061 2,386,321 (376,820) 729,700 (8,456,078) 5,708,184
----------------------------- ----------- --------------- -------------- ---------- ------------ ----------
Loss for the period - - - (599,789) (599,789)
Total comprehensive loss
for the period - - - - (599,789) (599,789)
----------------------------- ----------- --------------- -------------- ---------- ------------ ----------
Issue of ordinary share
capital 1,035,000 - - - - 1,035,000
Fair value movement of
share options - - - 131,297 - 131,297
Listing costs capitalised - (83,799) - - - (83,799)
Total transactions with
owners 1,035,000 (83,799) - 131,297 - 1,082,498
----------------------------- ----------- --------------- -------------- ---------- ------------ ----------
Balance at 30 June 2022 12,460,061 2,302,522 (376,820) 860,997 (9,055,867) 6,190,893
----------------------------- ----------- --------------- -------------- ---------- ------------ ----------
Condensed consolidated statement of
cash flows
For the 6 months to 30 June 2022
01.01.2021
to 30.06.2021
(unaudited)
01.01.2022 01.01.2021
to 30.06.2022 to 31.12.2021
(unaudited) (restated)* (audited)
GBP GBP GBP
----------------------- ---------------------- --------------- --- --------------- ---------------
Cash flows from operating activities
Loss for the period before taxation (599,789) (758,128) (1,398,821)
Adjustments for:
Fair value of share options 131,297 62,364 75,534
Fair value of warrants - 24,366 24,366
Finance expense - 19 19
Depreciation 1,218 1,118 2,338
Foreign exchange (295,419) 318,285 (244,281)
Decrease/(increase) in trade and other
receivables 18,450 (29,523) (6,059)
(Decrease)/increase in trade and other
payables (118,010) 239,488 161,527
Net cash used in operating activities (862,253) (142,011) (1,385,377)
----------------------------------------------- --------------- --- --------------- ---------------
Cash flow from investing activities
Loan advances - (25,940) (115,881)
Capitalised costs - Project Guercif
- Morocco (170,965) (1,672,671) (2,687,026)
Purchase of computer equipment - (2,629) (2,629)
Net cash used in investing activities (170,965) (1,701,240) (2,805,536)
----------------------------------------------- --------------- --- --------------- ---------------
Cash flows from financing activities
Proceeds from issuance of shares, net
of issue costs 951,200 3,055,900 4,173,900
Proceeds from issue of convertible
loan notes, net of issue costs - 7,497 7,497
Finance expense paid - (19) (19)
Net cash generated from financing
activities 951,200 3,063,378 4,181,378
----------------------------------------------- --------------- --- --------------- ---------------
Effect of exchange rates on cash 108,417 (287,311) 206,819
Net increase in cash and cash equivalents 26,399 932,816 197,284
Cash and cash equivalents at the beginning
of the period 1,523,035 1,325,751 1,325,751
Cash and cash equivalents at the end
of the period 1,549,434 2,258,567 1,523,035
----------------------------------------------- --------------- --- --------------- ---------------
Notes to the condensed consolidated interim financial
statements
For the 6 months to 30 June 2022
General information
Predator Oil & Gas Holdings Plc ("the Company") and its
subsidiaries (together "the Group") are engaged principally in the
operation of an oil and gas development business in the Republic of
Trinidad and Tobago and an exploration and appraisal portfolio in
Morocco and Ireland. The Company's ordinary shares are on the
Official List of the UK Listing Authority in the standard listing
section of the London Stock Exchange.
Predator Oil & Gas Holdings plc was incorporated in 2017 as
a public limited company under Companies (Jersey) Law 1991 with
registered number 125419. It is domiciled and registered at IFC5,
3rd Floor, Castle Street, St Helier, Jersey, JE2 3BY.
Basis of preparation
The condensed consolidated interim financial statements are
prepared under the historical cost convention and on a going
concern basis and in accordance with International Financial
Reporting Standards and IFRIC interpretations adopted for use in
the United Kingdom ("IFRS").
The condensed consolidated interim financial statements
contained in this document do not constitute statutory accounts
under Companies (Jersey) Law 1991. In the opinion of the directors,
the condensed consolidated interim financial statements for this
period fairly presents the financial position, result of operations
and cash flows for this period.
The condensed consolidated interim financial statements have not
been audited, however, they have been reviewed by the Company's
auditors in accordance with the International Standard on Review
Engagements 2410 issued by the Auditing Practices Board.
Statutory financial statements for the year ended 31 December
2021 were approved by the Board of Directors on 28 June 2022. The
report of the auditors on those financial statements was
unqualified, however, it contained an emphasis of matter paragraph
in respect of the recoverability of the loan receivable from FRAM
(note 7) and the capitalisation of exploration costs.
The Board of Directors approved this Interim Financial Report on
20 September 2022.
Statement of compliance
The Interim Report includes the consolidated interim financial
statements which have been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting'.
The condensed interim financial statements should be read in
conjunction with the annual financial statements for the year ended
31 December 2021, which have been prepared in accordance with IFRS
as adopted by the United Kingdom.
Going Concern
Notwithstanding the operating loss incurred during the period
under review and following a successful placing to raise a total of
GBP1,035,000 before expenses and a further successful placing post
the reporting period to raise GBP3,300,000 before expenses, the
Directors have a reasonable expectation that the Group will not
need to raise funds to continue with its operational commitments
and to meet all of its current contractual liabilities for the
foreseeable future.
The planned major initiative for 2022 is the drilling of the
MOU-2 well in Morocco. The costs for this well are currently based
on the final MOU-1 well costs. Whilst the cost of well services and
equipment has gone up and the United States Dollar has strengthened
significantly against sterling this has been largely offset against
savings made in the drilling programme based on the MOU-1 learning
curve. Furthermore MOU-1 drilling costs included a large element of
VAT that cannot now be recovered until production is established.
Sufficient time exists prior to the execution of the MOU-2 drilling
programme to ensure that all VAT exemption claims are processed
before contracts are executed, unlike for MOU-1 where there was a
very short lead time to mobilising the Start Valley Rig 101 from
the Rharb Basin. A negotiation with ONHYM is to take place with
respect to the timing of the return of US$1,000,000 of the
US$1,500,000 Bank Guarantee versus entry into the First Exploration
Period of the Guercif Petroleum Agreement.
The Company is planning a discretionary drilling programme in
Guercif in 2022 which is subject to funding potentially at the
project level via a farmin or other form of financial arrangement
for project equity. If successful, the Company will enter the next
phase of the Guercif Licence at which time the discretionary work
programme completed in 2022 will contribute towards the work
programme agreed for the next phase of the Guercif Licence and the
Bank Guarantee may be rolled over too.
CO2 EOR in Trinidad has not required any additional working
capital other than a small allotment of funds for care and
maintenance. The Operator of the Inniss-Trinity Incremental
Production Services Contract ("IPSC"), FRAM, unilaterally elected
to terminate the Inniss-Trinity CO2 EOR Pilot Project without
informing the licence holder Heritage Petroleum Trinidad Ltd.
("Heritage"). As a result, no further funds are being invested in
the project and there are no residual liabilities to be incurred by
the Company. The Well Participation Agreement ("WPA") with FRAM and
all accrued entitlements due to the Company arising from the WPA up
until the time the project was unilaterally terminated by FRAM's
parent company currently remain due, as does the Loan advanced to
FRAM, which is repayable from the profits of the sale of enhanced
oil production. Negotiations with FRAM and its parent company to
amicably find a solution to the situation based on the proposal
submitted previously to the parent company by the Company did not
elicit a response. Given the uncertain financial status of the
parent company of FRAM, the Directors have made provisions in the
Going Concern forecast that the Loan may never be recovered and no
profits from enhanced oil production in Inniss-Trinity will be
forthcoming. This provision was only reflected in the Going Concern
forecast to ensure that the Company had sufficient resources to
continue operating for the foreseeable future even on a worst-case
scenario. It was decided by the Directors that the loan was not to
be provided for until legal advice, which has been sought by the
Company, has been reviewed following the publication of the parent
company's 2021 Audited Accounts by 30(th) September 2022. At this
time the preferred legal option to exercise may be implemented
taking into account the parent company's auditors' description of
the dispute with the Company and the ability of the parent company
to pay any potential compensation claim.
For the Going Concern if there were to be a projected working
capital shortfall within the next 12 months, then the directors
will institute a programme of cuts to directors' and consultant's
remuneration and other third-party corporate costs until such time
as US$500,000 of the Guercif Bank Guarantee is returned after
delivering to ONHYM the data from the seismic reprocessing and
desk-top studies. This would be extended to include the return of
the US$1,000,000 of the Guercif Bank Guarantee. If either or both
of these events were delayed then the Directors would seek to raise
additional funds in the equity markets, assuming that no farmout of
project equity had occurred by such time as additional working
capital was required.
The Company has no debt.
The Directors do not believe that either a resurgence of COVID
or Brexit will adversely influence the Group's business development
strategy. Operations in Morocco can be maintained if that were to
occur based on the operating practices established for the drilling
of MOU-1. Brexit will only create more uncertainty for Ireland's
security of gas supply, thereby enhancing the Company's LNG import
project for Ireland by creating an alternative source of gas not
tied to the UK-Ireland gas transmission infrastructure.
Relaxation of COVID restrictions may create more opportunities
for the Company to divest assets if required to do so as the
appetite for gas assets and ESG credentials increases as a result
of the "Energy Crisis" and investors' concerns regarding aligning
investment with ESG credibility.
The directors having made do and careful enquiry, are of the
opinion that the Group has adequate working capital to execute its
operational commitments over the next 12 months given that current
spending commitments will prevail. The Group will therefore
continue to adopt the going concern basis in preparing the Interim
Report and Financial Statements.
Cyclicality
The interim results for the six months ended 30 June 2022 are
not necessarily indicative of the results to be expected for the
full year ending 31 December 2022. Due to the nature of the entity,
the operations are not affected by seasonal variations at this
stage.
New Standards adopted at 1 January 2022
There are no accounting pronouncements which have become
effective from 1 January 2022 that have a significant impact on the
Group's interim condensed consolidated financial statements.
Significant accounting policies
The accounting policies applied by the Group in these
half-yearly results are the same as those applied by the Group in
its consolidated financial information in its 2021 Annual Report
and Accounts.
Areas of estimates and judgement
When preparing the Group's consolidated interim financial
statements, management undertakes a number of judgements, estimates
and assumptions about recognition and measurement of assets,
liabilities, income and expenses. The actual results may differ
from the judgements, estimates and assumptions made by management,
and will seldom equal the estimated results.
The judgements, estimates and assumptions applied in the Group's
consolidated interim financial statements, including the key
sources of estimation uncertainty, were the same as those applied
in the Group's last annual financial statements for the year ended
31 December 2021.
Foreign currencies
The functional currency of the Group and all of its subsidiaries
is the British Pound Sterling.
Transactions entered into by the Group entities in a currency
other than the currency of the primary economic environment in
which it operates (the "functional currency") are recorded at the
rates ruling when the transactions occur. Foreign currency monetary
assets and liabilities are translated at the rates ruling at the
date of the statement of financial position. Exchange differences
arising on the retranslation of unsettled monetary assets and
liabilities are similarly recognised immediately in profit or loss,
except for foreign currency borrowings qualifying as a hedge of a
net investment in a foreign operation.
1 Financial risk management
The Board continually assesses and monitors the key risks of the
business. The key risks that could affect the Group's medium-term
performance and the factors that mitigate those risks have not
substantially changed from those set out in the Group's 2021 Annual
Report and Financial Statements, a copy of which is available from
the Group's website: www.predatoroilandgas.com. The key financial
risks are market risk (including cash flow interest rate risk and
foreign currency risk), credit risk and liquidity.
2 Segmental analysis
The Group operates in one business segment, the exploration,
appraisal and development of oil and gas assets. The Group has
interests in three geographical segments being Africa (Morocco),
Europe (Ireland) and the Caribbean (Trinidad and Tobago).
The Group's operations are reviewed by the Board (which is
considered to be the Chief Operating Decision Maker ('CODM')) and
split between oil and gas exploration and development and
administration and corporate costs.
Operating segments are disclosed below on the basis of the split
between exploration and development and administration and
corporate.
Europe Caribbean Africa Corporate
GBP GBP GBP GBP
-------------------------------------- ---------- ---------- ---------- ----------
Gross Loss
Administrative and overhead
expenses (118,621) (40,945) (420,341) (19,882)
Share option and warrant expense - - - -
Finance expense - - - -
Loss for the year from continuing
operations (118,621) (40,945) (420,341) (19,882)
========== ========== ========== ==========
Addition to intangible assets
Total reportable segment assets 2,717 659,621 4,103,413 1,552,151
Total reportable segment liabilities (7,191) - (28,129) (91,689)
There are no non-current assets held in the Group's country of
domicile, being Jersey, Channel Islands (2021: GBPnil).
30.06.2021
30.06.2022 (unaudited) 31.12.2021
(unaudited) GBP (audited)
3 Administrative expenses GBP (restated) GBP
---------------------------------- ------------ ------------ -----------
Technical Consultancy fees 64,504 70,524 360,484
Listing costs 56,971 78,255 303,281
AIM listing costs 40,488 - -
Project costs 23,472 12,467 -
Directors' fees 182,699 222,460 229,165
Share based payments - options 131,297 62,364 75,533
Share based payments - warrants - 24,366 24,366
Administration fees 55,946 42,732 84,957
Bank charges 26,224 36,035 49,263
Legal and professional fees 69,722 22,820 52,197
Travel expenses 76,166 32,502 41,137
Non-executive director fees 60,830 44,998 89,996
Computer/system costs/IT support 2,130 3,904 4,249
Design, publishing, presentation
and printing fees - 1,036 1,036
Insurance 33,415 19,373 58,545
Sundry expenses 1,369 2,539 3,817
Annual return fee 665 669 1,125
Depreciation 1,218 1,118 2,338
Website costs 2,203 2,371 4,117
Foreign exchange (243,530) 61,826 (14,304)
Audit fee 14,000 15,750 27,500
599,789 758,109 1,398,802
---------------------------------- ------------ ------------ -----------
30.06.2021
30.06.2022 (unaudited) 31.12.2021
-------------------------------------- ------------ ------------ ------------
4 Loss per share (unaudited) (restated) (audited)
-------------------------------------- ------------ ------------ ------------
Weighted average number of shares 272,377,468 244,534,481 266,433,024
Loss attributable to ordinary equity
holders of the company (599,789) (758,128) (1,398,821)
Total basic and diluted loss per
share attributable to the ordinary
equity holders (pence) (0.2) (0.3) (0.5)
-------------------------------------- ------------ ------------ ------------
Diluted loss per Ordinary share equals basic loss per ordinary
share as, due the losses incurred in 2022 and 2021, there is no
dilutive effect from the subsisting share options.
5 Intangible asset Project
Guercif Total
----------------------------- ---------- ----------
Gross carrying amount
Balance at 1 January
2022 2,687,026 2,687,026
Additions, separately
acquired 170,965 170,965
Balance at 30 June 2022 2,857,991 2,857,991
------------------------------ ---------- ----------
Depreciation and impairment
Balance at 1 January - -
2022
Depreciation - -
Balance at 30 June 2022 - -
----------------------------- ---------- ----------
Carrying amount 30 June
2022 2,857,991 2,857,991
------------------------------ ---------- ----------
All costs relating to Project Guercif have been capitalised and
will be depreciated once gas discovery is declared commercial and a
Plan of Development has been approved.
The Directors have undertaken an assessment of the following
areas and circumstances that could indicate the existence of
impairment:
-- The Group's right to explore in an area has expired, or will
expire in the near future without renewal;
-- No further exploration or evaluation is planned or budgeted for;
-- A decision has been taken by the Board to discontinue
exploration and evaluation in an area due to the absence of a
commercial level of reserves; or
-- Sufficient data exists to indicate that the book value will
not be fully recovered from future development and production.
Computer
6 Property, plant and equipment equipment Total
--------------------------------- ----------- --------
Gross carrying amount
Balance at 1 January 2022 11,181 11,181
Additions - -
Balance at 30 June 2022 11,181 11,181
---------------------------------- ----------- --------
Depreciation and impairment
Balance at 1 January 2022 (5,297) (5,297)
Depreciation (1,218) (1,218)
Balance at 30 June 2022 (6,515) (6,515)
---------------------------------- ----------- --------
Carrying amount 31 December
2021 5,884 5,884
---------------------------------- ----------- --------
Carrying amount 30 June
2022 4,666 4,666
---------------------------------- ----------- --------
30.06.2021 30.06.2021 31.12.2021
(unaudited) (unaudited) (audited)
7 Trade and other receivables GBP GBP GBP
----------------------------------- ------------ ------------ -----------
Current
Security deposit (US$1,500,000) 1,235,107 1,083,298 1,111,111
Loans receivable (i) 654,073 487,477 591,066
Prepayments and other receivables 16,631 31,571 35,081
1,905,811 1,602,346 1,737,258
----------------------------------- ------------ ------------ -----------
The Company's subsidiary, Predator Gas Ventures Limited, on 19
March 2019, provided a bank guarantee of US$1.5 million to Office
National des Hydrocarbures et des Mines, who act for the Moroccan
State, as a condition of being granted the Guercif exploration
licence. Predator Gas Ventures Limited was required to lodge a
security deposit of US$1.5 million with Barclays Bank Plc to secure
the guarantee facility. The restricted access cash balance of
GBP1,235,107 represents the aforesaid security deposit and is
denominated in US Dollars. These funds are refundable on the
completion of the Minimum Work Programme set out in the terms of
the Guercif Petroleum Agreement and Association Contract. All other
receivables are denominated in Pound Sterling.
(i) As at the year ended 30 June 2022 GBP654,073 (2021:
GBP487,477) comprises of:
-- USD$360,096 (2021: USD360,096) advanced as cash in line with
a loan agreement signed and dated 24 July 2019 and subsequent 5
addendums (2021: 5 addendums); and
-- USD$402,120 and GBP26,461 (2021: USD402,120 GBP26,461)
advanced as equipment.
The loans are in place to provide FRAM with funds for the
purpose of meeting current and future expenses.
The loans balance are unsecured, interest free and repayable at
the discretion of Predator Oil & Gas Trinidad Limited provided
not less than a notice of 7 working days is given.
On the 7 June 2022, The Company announced an update on the
Company's position with regard to the loan receivable (the "FRAM
Loan") from FRAM Exploration Trinidad Ltd. ("FRAM"), a wholly owned
subsidiary of Challenger Energy Group Plc ("Challenger"), in
respect of the Inniss-Trinity CO2 EOR Project (the "CO2 EOR
Project"). The CO2 EOR Project was prematurely and unilaterally
terminated by Challenger on 1 August 2021.
In the absence of receiving a response to the Company's
correspondence to Challenger dated 23 March 2022 and in the light
of FRAM and Challenger refusal in writing to comply with a request
for information from the Company via its auditors that was
necessary for its financial reporting of the FRAM Loan, the Company
has elected to initiate a litigation process.
The scope of the litigation process involves the Company seeking
recompense in relation to the following matters:
1. The FRAM Loan outstanding to the Company of GBP591,065 as of 31 December 2021.
2. The Company is seeking full repayment of its project costs
(the "Project Costs") invested in the CO2 EOR Project under the
terms of the Inniss-Trinity Well Participation Agreement (the
"WPA"), which remains in place.
3. The Company is seeking substantial consequential losses from
Challenger under the WPA and arising from Challenger's failure to
facilitate the execution of Phase 3 of the CO2 EOR Project as
defined in the approved Inniss-Trinity CO2 EOR Project Proposal
PRD25092019.
Based on an average WTI spot price of US$100, the Company is
attributing an undiscounted value to the potential 853,000 barrels
of oil resources in the AT-4 Block to have potentially been
developed under Phase 3 of the CO2 EOR Project of US$30/barrel. The
Company therefore determines that the potential claim for estimated
consequential losses against Challenger, based on 50% of net
profits under the WPA, could be up to US$12,800,000 but may be
revised upwards depending on forward oil price projections.
4. Phase 4 of the approved Inniss-Trinity CO2 EOR Project
Proposal PRD25092019 allows for the application of the CO2 EOR
Pilot learnings to be applied within new areas of the
Inniss-Trinity field for upscaling CO2 EOR.
The SLR Consulting Ireland Ltd Independent Competent Persons
Report for the Inniss-Trinity field published 19 February 2020
gives Best Estimate recoverable CO2 EOR resources for the entire
Inniss-Trinity field of 6.8 million barrels.
Based on 50% of net profits under the WPA and US$30/barrel this
would amount potentially to estimated undiscounted consequential
losses of up to US$102 million but may be revised upwards depending
on forward oil price projections.
The Company notes the Challenger RNS dated 8 June 2022 but does
not accept its conclusions. The Company will not elaborate further
at this time so as not to prejudice any future legal process
Pending the outcome of commercial negotiations to settle the
dispute with FRAM the aforesaid loan may or may not be
recovered.
30.06.2022 30.06.2021 31.12.2021
(unaudited) (unaudited) (audited)
8 Cash and cash equivalents GBP GBP GBP
----------------------------- ------------ ------------ -----------
Pound Sterling 1,023,352 360,977 848,339
Euros 1,059 - 2,910
United States Dollar 516,162 1,842,736 631,522
Moroccan Dirham 8,861 54,854 40,265
1,549,434 2,258,567 1,523,035
----------------------------- ------------ ------------ -----------
Number of Nominal
9 Share capital shares value
----------------------- ------------ -----------
Issued and fully paid
Opening Balance 292,946,267 11,425,061
26 March 2021
Share issue 5,000,000 450,000
18 June 2021
Share issue 6,500,000 585,000
304,446,267 12,460,061
----------------------- ------------ -----------
30.06.2022 30.06.2021 31.12.2021
(unaudited) (unaudited) (audited)
10 Trade and other payables GBP GBP GBP
----------------------------- ------------ ------------ -----------
Current
Trade payables 127,009 322,980 245,019
127,009 322,980 245,019
----------------------------- ------------ ------------ -----------
11 Share based payments
Share options
The Group operates a share option plan for directors. During the
period the below share options were issued:
On 31 January 2022 both Lonny Baumgardner and Louis Castro were
granted share options of 7,855,486 and 1,000,000, respectively. The
share options granted were exercisable at 5.66p each being the
closing mid-marked price on 28 January 2022 and had a vesting
period of 6 months ending 31 July 2022.
For the six months ended 30 June 2022, the Group has recognised
GBP131,297 of share-based payment expense in the statement of
profit or loss (2021: GBP62,364).
Warrants
During the period, the Company did not grant any warrants (2021:
1,620,000).
12 Investment in subsidiaries Principal activity Country Ownership
of
incorporation interest
Predator Oil and Gas Licence options in
Ventures Limited offshore Ireland Jersey 100%
Profit rights for
production revenues
Predator Oil and Gas from a CO2 enhanced
Trinidad Limited oil recovery project Jersey 100%
Predator Gas Ventures Exploration licence
Limited onshore Morocco Jersey 100%
Licence application
Mag Mell Energy Ireland to import liquified
Ltd natural gas Jersey 100%
13 Financial instruments
The Group's financial instruments comprise cash and items
arising directly from its operations such as trade receivables and
trade payables.
30.06.2022
(unaudited)
Categorisation of financial GBP
instruments
-------------------------------------------- ------------
Financial assets measured
at amortised cost:
Trade and other receivables 1,905,811
Financial assets that are debt instruments
measured at amortised cost:
Cash and cash equivalents 1,549,434
3,455,245
============
Financial liabilities measured
at amortised cost:
Trade and other payables (127,009)
(127,009)
============
14 Related party transactions
Transactions with key management personnel
Key management of the Group are the board of directors. Key
management personnel remuneration includes the following
expenses:
30.06.2022 30.06.2021 31.12.2021
(unaudited) (unaudited) (audited)
GBP GBP GBP
--------------------------------------- ------------ ------------ -----------
Executive and non-executive directors
including bonuses 243,529 267,458 545,853
Share option scheme 131,297 62,364 90,013
374,826 329,822 635,867
--------------------------------------- ------------ ------------ -----------
The average number of personnel
(including directors) during the
period was:
Management - (Executive Directors) 2 2 2
Non-management - (Non-executive
Directors) 2 2 2
4 4 4
======================================= ============ ============ ===========
Four Directors at the end of the period have share options
receivable under long term incentive schemes. The highest paid
Director received an amount of GBP107,350 (2021: GBP116,667). All
individuals are engaged as service providers.
15 Subsequent events
On the 12 July 2022, the Company received an exercise notice
from Novum Securities Limited ("Novum") in respect of warrants
issued to it pursuant to warrant agreements with the Company:
-- Dated 24 May 2018 (which had the expiry date extended to 24
May 2023) (in connection with the Placing carried out by the
Company in May 2018 on admission of the Company to the Official
List (standard listing segment) of the London Stock Exchange's main
market for listed securities) to subscribe for 1,892,960 new shares
of no par value each in the Company ("New Ordinary Shares") at 2.8p
per share, and
-- Dated 17 February 2020 (in connection with the Placing
carried out by the Company in February 2020) to subscribe for
2,256,250 new shares of no par value each in the Company ("New
Ordinary Shares") at 4p per share.
The Company has therefore allotted and issued the total of
4,149,210 New Ordinary Shares following receipt of the aggregate
GBP143,253 subscription price from Novum
-- On the 17 August 2022 GBP3,300,000 (before expenses) raised
through one Placing with the issue of 60,0000 Ordinary Shares of
5.5 pence each. 15 million existing shares along with voting rights
were loaned to the Company by a director Paul Griffiths under a
Stock Lending Agreement. The Company did not have sufficient
headroom to enable the issue and admission of all of the 60,000,000
Placing Shares which are required to be issued pursuant to the
Placing without the production of an FCA approved prospectus. The
Stock Lending Agreement ensured that the Company is fully funded
for its near-term Moroccan drilling programme and can meet its
proposed drilling schedule.
-- In connection with the fundraising, 3,600,000 warrants,
exercisable at 5.5p per new ordinary share with a 3 year expiry
from Admission were issued to Novum Securities Limited or their
nominees.
As at 31 July 2022, the share options issued to Lonny
Baumgardner and Louis Castro on 31 January 2022 have vested.
16 Ultimate controlling party
In the opinion of the Directors there is no ultimate controlling
party as no one individual is deemed to satisfy this
definition.
17 Restatement of prior period
During the preparation of the financial statements for the year
ended 31 December 2021, it was decided by the Directors that the
Company was to restate the warrant issue costs shown in prior
periods.
The restatement was implemented to bring prior years' warrant
costs to be aligned with IFRS 2 in the oil and gas industry,
whereby any warrants issued for services provided, are to be fully
recognised with the equity section of the Company.
The impact on the prior interim financial statements is shown on
the table below:
Effect Effect Effect
on period on period on period
ended 30 ended 30 ended 30
June 2021 June 2020 June 2019
GBP GBP GBP
Loss for the year (929,089) (784,156) (512,263)
Reclassification of warrants
issue costs 170,961 100,451 81,385
Restated total loss for the
period (758,128) (683,705) (430,878)
=========== =========== ===========
Warrants issuance cost reserve
balance brought forward (208,887) (108,436) (27,051)
Warrants issuance cost (170,961) (100,451) (81,385)
Restated Equity attributable to
the owner of the parent (379,848) (208,887) (108,436)
=========== =========== ===========
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR KZGMLRLVGZZG
(END) Dow Jones Newswires
September 20, 2022 02:00 ET (06:00 GMT)
Predator Oil & Gas (LSE:PRD)
Historical Stock Chart
From Mar 2024 to Apr 2024
Predator Oil & Gas (LSE:PRD)
Historical Stock Chart
From Apr 2023 to Apr 2024
