Predator Oil & Gas secures rig contract extension for strategic drilling in Morocco

In a significant development for the oil and gas sector, Predator Oil & Gas Holdings Plc (LSE: PRD), headquartered in Jersey and with operations focused on Morocco and Trinidad, has announced an extension of its 2022 rig contract. This extension pertains to the use of the Star Valley Rig 101 in Morocco, a critical move for the company’s near-term operational strategy.

The contract extension is poised to facilitate the drilling of the MOU-5 well, aimed at evaluating the 177km² Jurassic structural closure in a crestal location, previously penetrated by MOU-4 in 2023. With a drilling window set between 1 April to 31 May 2024, the operation seeks to leverage in-country well services post the completion of the company’s rigless testing programme, aiming at cost reduction for mobilisation of well equipment and services.

Predator Oil & Gas Holdings Plc’s strategic approach to drilling MOU-5 involves using surplus well inventory from its Guercif warehouse, potentially further reducing drilling costs. Notably, the MOU-5 drilling operation is expected to avoid over-balanced drilling with heavier mud, a significant shift from previous wells due to the absence of problematic mobile clay formations.

The primary objective of the MOU-5 well is to tap into the early Jurassic carbonate reservoirs, anticipated to be thick, porous, and permeable, sealed by overlying claystones. This drilling initiative is fully funded, leveraging the company’s uncommitted discretionary cash, emphasizing Predator Oil & Gas Holdings Plc’s robust financial readiness for this venture.

Paul Griffiths, Executive Chairman of Predator, expressed enthusiasm about the contract extension, highlighting the cost-effective and fully-funded nature of the drilling operation. Griffiths underscored the potential of a successful MOU-5 drilling, testing, appraisal, and development programme to exploit proximity to the Maghreb Gas Pipeline, a strategic advantage for future gas development endeavors due to reduced capital infrastructure costs and shortened lead time to “First Gas.”

The extension also comes on the heels of a successful planning trip to Trinidad, marking significant progress in establishing operational and administrative presence, alongside identifying additional workover and well re-perforation opportunities using Sandjet testing technology.

Predator Oil & Gas Holdings Plc’s commitment to generating activity and news flow in the coming weeks and months indicates a strategic push to elevate the company’s position through continued drilling success. With the Guercif Petroleum Agreement onshore Morocco, the company is well-positioned to further explore the Tertiary and Jurassic gas prospects, closely located to the Maghreb gas pipeline.