Predator Oil & Gas strengthens Moroccan position with MOU-5 drilling success

Predator Oil & Gas Holdings Plc (LSE: PRD) has reported a significant milestone in its Moroccan operations with the successful completion of the MOU-5 drilling results on the Guercif Licence Morocco. The findings have reinforced the company’s long-term exploration strategy, confirming the presence of key geological formations and opening new opportunities in its Jurassic Project Morocco.

With Morocco emerging as a key player in Africa’s gas market, Predator’s latest drilling success positions the company at the forefront of the region’s evolving energy landscape. The discovery of additional gas-bearing intervals and an unexpected sandstone reservoir below the Domerian carbonate highlights the potential for further hydrocarbon resources within the basin.

What Do the MOU-5 Drilling Results Reveal?

The MOU-5 drilling results have validated pre-drill geological models, demonstrating that the Domerian carbonate formation extends deeper than initially projected. The unexpected depth of this target, attributed to the presence of mobilized salt, has improved the integrity of the overlying top seal, an essential factor in hydrocarbon accumulation.

Encouraging data from wireline logs show a 50-metre carbonate section with strong resistivity and sonic responses, supporting the presence of hydrocarbons. Additionally, helium traces measuring 1,557 ppm were recorded above the carbonate structure, indicating a potential connection to salt diapiric activity—an aspect that warrants further study through 3D seismic analysis.

Perhaps the most surprising result was the discovery of a 30-metre good-quality sandstone reservoir beneath the Domerian carbonate. This is the first time such a formation has been encountered in the Guercif Licence Morocco, introducing a new exploration target for Predator Oil & Gas.

How Will the MOU-5 Findings Impact Predator’s Exploration Strategy?

The MOU-5 well has been temporarily suspended, allowing for a future re-entry, while the company focuses on the next phase of seismic data acquisition. Predator Oil & Gas is now advancing its Jurassic Project Morocco, a targeted initiative to further investigate the Domerian carbonate structure, particularly in the northwest region of the well.

To finance additional exploration, the company is preparing to initiate a farmout process, seeking a strategic partner to fund and participate in the 3D seismic program. Seismic data will play a critical role in characterizing the reservoir, ensuring that future drilling targets are precisely mapped to maximize the chances of commercial success.

Why Is Morocco an Attractive Market for Natural Gas Development?

Morocco has become a highly attractive destination for oil and gas companies due to its favorable fiscal terms and high domestic gas prices. Unlike many other African nations, Morocco does not have significant domestic gas production, making it largely reliant on imports. This presents a unique opportunity for companies like Predator Oil & Gas, which can leverage the local demand and competitive pricing environment.

The company is also advancing its MOU-3 well, where rigless testing is being conducted on previously untested shallow sand formations. If successful, the MOU-3 well could support a compressed natural gas (CNG) development strategy, providing an alternative monetization route that circumvents the need for extensive pipeline infrastructure.

How Has the Market Responded to Predator’s Drilling Update?

Investor sentiment toward Predator Oil & Gas Holdings Plc (LSE: PRD) has been cautiously optimistic following the MOU-5 drilling results. The company’s stock saw a 16.67% increase, closing at 3.50 GBX on March 21, 2025, up from 3.00 GBX the previous day.

Despite this positive movement, the stock remains down 55.70% year-over-year, reflecting broader market challenges. Over the past 52 weeks, Predator’s shares have fluctuated between 2.50 GBX and 12.00 GBX, indicating high volatility.

From a technical standpoint, the stock is currently trading below its 50-day and 200-day moving averages (5.60 GBX and 7.92 GBX, respectively), signaling a long-term bearish trend. However, with a Relative Strength Index (RSI) of 32.56, the stock is approaching oversold territory, suggesting that a potential rebound could be on the horizon if future drilling updates continue to provide positive catalysts.

What Are the Next Steps for Predator Oil & Gas?

The Jurassic Project Morocco remains a top priority, with Predator Oil & Gas actively seeking a farminee to support further seismic acquisition and development efforts. The company’s 75% interest in the Guercif Licence Morocco, alongside state-owned ONHYM, provides a solid foundation for future growth.

Beyond Morocco, Predator is maintaining its Trinidad oil production operations, leveraging low-cost extraction techniques and existing tax advantages to enhance profitability. With ongoing expansion efforts, the company is balancing exploration potential in Morocco with stable cash flow from Trinidad, ensuring a diversified energy portfolio.

While challenges such as geopolitical uncertainty and market volatility persist, Predator’s ability to execute efficient drilling operations within budget is a positive indicator of its operational strength. The MOU-5 drilling results have provided valuable geological insights that will shape future exploration efforts, and with a strategic farmout partnership, the company aims to accelerate the transition from exploration to commercialization.

As Predator Oil & Gas moves forward, investor focus will remain on securing funding for its Moroccan projects, advancing seismic exploration, and delivering tangible production milestones in both Morocco and Trinidad. The company’s ability to capitalize on these opportunities will be a key determinant of its long-term market position.