Predator Oil & Gas Holdings (LSE:PRD) — Investor Presentation

0:01 Good morning, ladies and gentlemen, and welcome to the PREDATOR OIL and GAS HOLDINGS PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so.

0:31 Before we begin, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. I'd now like to hand you over to CEO, Paul Griffiths. Good morning, sir. Good morning, Jake. Good morning, everyone. Thank you for all attending. Let's dive straight into this. So this is an update on the MOU to GAS HIT Morocco drilling, which we RNN's just recently within the last week. So you can appreciate that we've had just a few days to put what we think is a good good representation of the results of the well so far. So let's move on straight to slide three. And this sorry. Sorry. Yes. Okay. Right. Just summary.

1:20 So MOU two, as we announced the market, was suspended above the private target, and we needed to reevaluate the drilling rate and how optimum that was simply because the mud that we used for this well wasn't working in the deeper section. The second thing, you know, obviously, prudently, we wanted to reduce drilling costs. We didn't want to be making one meter an hour progress indefinitely or for longer than we actually had to and using up money and cash simply by not making sufficient progress. The initial indications, though, from what we did manage to collect from the well are very positive for thicker reservoir development, and that was the reason for drilling the well in the first place, obviously, to find gas, and we're not quite there yet, but also to give some indication that we were in the right place for the thicker sand development relative to MOU one.

2:14 The presence of a a very thick, highly effective seal overlying the primary target confirmed the seal integrity, which is very important because, obviously, we're looking at bigger gas here in this anomaly fan covering over 30 square kilometers. So it's important that, you know, we confirmed, although we didn't set out with that intention initially, we confirmed that we had a very, very good seal, an effective seal on this. The next step is rigorous testing of MOU one. The information we've already gathered from MOU two in a very short length of time gives us a lot of encouragement for testing MOU one, and that's the next priority in the order of sequence of things.

3:00 The predrill contingent CPR resources are completely unaffected by what we found to date in the sense that we have not yet reached the target. Nothing we found in the well undermines the the resource potential of of the target below where we suspended. And the Moroccan industry remains a prime target for industrial gas, that's a sale of gas to industry. And the five wells since MOU one that have been drilled in Northern Morocco, none of them had contributed PLC significantly to making a change to that potential gas market. So GAS still is in a prime position to impact the gas market. The forward plan is essentially one to rigorous test MOU one and then effectively to deepen and test MOU two, and then ultimately to drill another well, MOU a, in a sweet spot that has now been defined by the results of MOU two to date and taking into account what we now know about MOU one with the additional information from MOU two. So that's a brief summary of where we're at.

4:12 The next slide is a before and after, and I put this slide in because I think many of you will not appreciate what it takes to put a single well drilling campaign together as an operator, a 100% operator in onshore Morocco or anywhere else in the world, for example. So on the left hand side, you can see the site as we constructed the well pad. On the right hand side, you can see what's almost like a small village at tents, cabins, etcetera, around the rig. So to put that together is quite a huge exercise, logistical exercise for a single well operation. The other thing, there's a little map below that that shows effectively the the where we source materials from. So that's been Canada, Dubai, Turkey, even some in Romania, Egypt, UK, and it demonstrates the big change in the industry over the last year. After COVID and because of the Ukraine Russia war, everything has become tighter in terms of the supply chain, in terms of manufacturing, everything that was easily accessible off the shelf is now being used up. So you have to scour several different jurisdictions to get what you want, and that creates an issue with logistics because you've got effectively there eight different centers to transport materials from and to Morocco.

5:39 You're relying on eight different shipping companies, for example, in terms of vessels. And right now, what happens is your load is about to be dispatched, say, for example, from Tunisia, and then you get a text message saying it's been offloaded to take someone else's cargo, and it will be three weeks before another vessel can come to Tunisia and take your cargo. That's just a fact of life. The industry now is so dominated by supply and demand issues. The demand is outstripping the supply. So you would have seen perhaps what McKinsey say that global oil and gas discoveries in 2022 drove exploration to the highest value creation in ten years. I think that's a bit of a a stretch to some extent because, obviously, there were high oil and gas prices during 2022.

6:32 But more importantly, Reisdat Energy has stated that the services sector is set to grow to $1,000,000,000,000 by 2025, and that just demonstrates the pressure on the service sector, the equipment sector to supply drilling equipment and personnel, etcetera. So, you know, we we achieved what we achieved, which was to drill a well and and pre purchase equipment. So in that sense, we've operationally, from that perspective, we're happy with the result of that. If we look at the next slide, this basically gives a summary of MOU two in in terms of the results to date. And bearing in mind, we we TD'ed not TD'ed, we suspended at 1,260 meters to log the well after going through this very difficult geological formation.

7:32 So in the shadow section, we found the markers that we were expecting to find, like the m one sands, the first marker, which were thicker than in MOU one. The MA sand was as forecast but thinner and tighter compared to MOU one. And the TGP six sand was present, but again tight and thinner compared to MOU one. Now the important thing to note about all these sands, including the next one down, TGB four, which was not present, these were not targets realistically in the well because we didn't see any closure on them. Thought there potentially might be a stratigraphic pinch out, but what we proved now is the stratigraphic pinch out and the closure is to the left of that section, to the left of MOU 2, and that was tested in MOU one in in the shallow section where we had very good formation gas shows.

8:26 The top of Melulia Fan came in as forecast at just around 1,014 meters, but it was in a different kind of fasces, the top part of it. It was in a very unexpected geological formation that turned out to be 240 meters thick. It was unexpected because of the chemistry of that formation. It had a lot of potassium in it because it was derived from the East from volcanic rocks, for example. Now that potassium reacts with our silica based mud, and that's what was unpredicted before we we drilled the well. And I'll talk about that a little bit more in a in a second. So the idea then when we dropped to about one meter a day drilling rate, which was not sustainable commercially from our perspective, we wanted to suspend the well and then log it to see what this the nature of this section that we penetrated.

9:24 So our primary target was not reached. It's still there below the level of where we reached, maybe somewhere between twenty and sixty meters, maybe a bit more. You know, it's difficult to predict without logs. So probably about two days drilling with the right kind of mud. Now what we did find in this unusual geological unit was a great big block of transported primary reservoir. We've had the characteristics of the reservoir that we saw in MOU one, except it was much thicker, much cleaner, and it had the characteristics of the Antwerp 1 reservoir that was drilled by Repsol in 2009. So very, very, very I'd like to use the word excited, but you can't get excited by a well that is suspended tantalizingly above your your reservoir target. But very, very pleased to have encountered that evidence, that potential reservoir then in MOU 2.

10:29 So as we drilled down, if we look at drilling performance, as we drilled down through this section, we changed the mud when we spudded this well to what we call silica pure bore. And that actually drilled much more quickly or significantly more quickly than MOU one through the shallow section and through the difficult section in MOU one where we had a number of problems with washouts of sands, etcetera. So from that point of view, everything was going brilliantly well. Gamma log acquired while drilling was beautiful compared to MOU one, and then at 1,010 meters or just below that, everything changed. The rate of penetration slowed eventually to less than one meter hour, and the decision had to be made to suspend the well so we could log and figure out what was going on in that section.

11:22 And also, we knew that we didn't want continue drilling at that rate and burning up money. We were burning 8,000 liters of oil a day just to keep the rig going, drilling through that that very slow drilling section. But when the logging tool when the logs were run, we got very, very good logs down to the top of this unorthodox formation for for want of a better word, and then we couldn't penetrate below into the formation because of these sticky clays. And the risk was that no matter what we tried to do, we might have got the log logging tools stuck in the hole. If that had happened, that would be in a huge expense, and we might have had to kill the well because if we got something stuck in the well, it might have been impossible to get out. So the safest thing to do was to spec suspend, set as temporary plug, and then go back to the lab and reevaluate the mud system in that particular interval.

12:19 Moving on to the next slide. The unexpected geological formation. The the thing about this formation is that it actually based on drilling and rate and the rate of penetration of drilling breaks, we got up to a 100 meters of sand in this formation, but it's all derived sand that's reworked from somewhere else. But it demonstrates the fact that there's a huge amount of sand in the system here in the East compared to where we drilled in the West, MOU 1, just eight kilometers away. So that was a fantastic result from a geological perspective because we now know that we've got the potential for much thicker reservoirs here, and we've got a source of sand for these reservoirs.

13:07 However, much of the clays between the sands, in fact, most of them, are very rich in potassium. So you get very, very high gamma response, which has nothing to do with organic content or anything like that. It's to do with the potassium in the rocks, both in the sands, some of the sands, and in the clays. And it's that potassium chemistry that is reacting with the silicate based mud, and that was not predicted. There is not a formation like this anywhere in Morocco that you could have used as a yardstick in your preplanning, so this was completely unexpected. Not the slump unit per se, but the chemistry of the slump unit. As we got towards the base, we got into cleaner sands, and these were derived also derived sands. They're not in situ. They're transported.

13:54 And these had a very good gamma characteristic, very similar to the Antwera sands and also very similar to the edge of the sands that we saw in MOU one. Remember, we always said that that we we penetrated only the very edge of this thirty, forty square kilometer fan. And in MOU two, we've effectively proved that up indirectly with with part of this fan being incorporated in debris slide. So to give you a feel what how geologically complex this is and what what the challenges of drilling through it is, on the top left hand corner, you can see a picture of an analog gravity slide in the same similar age sequence in the the Tortonian in Sub East Southeastern Spain. So not a million miles away and then in the same geological providence for for this particular formation.

14:48 And you can see on the bottom of that picture effectively all the contorted and contortions of the clays because the clays are very soft and mobile. Below that, you see the seismic expression of this now, which is a big gravity slump effectively on top of the milieu fan at the base margin, but the high amplitude events, which are the target for the milieu fan, outlined in yellow, are still there. They're completely sealed by this massive sediment that is sat on the top of the fan. And then you can see on the bottom right hand corner some of the problems. The clays within this unit are very soluble, very sticky. They stick to the logging tool.

15:33 They stick to the drill bit. And when you're trying to make progress into into a formation, the drill bit just isn't biting on the formation. So you're just it's a bit like drilling a a pile of treacle and not making any progress. So that's the geological explanation as well as the drilling explanation. So when we move on now to why we obviously, the key was to secure safely for reentry the MOU two well whilst we worked out how to overcome this drilling mud problem. And we've left the well in a safe condition. The rig is over the well at no cost to us for the next couple of months, And we sent samples off to laboratories in Aberdeen, and and we're waiting on a quote for analysis of of the mud in the in in our system, in our drilling mud versus the chemistry of the formation to determine how best to proceed with a mud suitable for drilling this formation.

16:37 Again, at best, we've got maybe 240 meters to drill to to the bottom of the section we originally wanted to penetrate, and that, you know, with with the ideal mud solution based on all the other wells, that would take us just two days rig time to drill. So we're not a million miles away from the target, but it is a million miles away when you're drilling one meter or less a day. All the casing and other equipment we need is already purchased, so there's there's no additional purchasings of equipment here. The well shut services have been slowed down for the time being to avoid unnecessary standby costs. So, obviously, the key here is to maintain and sustain as much cash as we can until we're ready to move on to the next phase.

17:25 On the positive side of things, there's no change to the pre drilled contingent gas resources. We have not reached the target. On the left hand side, you see kind of the pre drill forecast of why we drilled MOU two. It's still in the right place in terms of where we want to drill. It still has it's proven up additional sand potential, which was one of the main objectives of the well already. And then as we move to the middle of those slides, we've proved up this what we didn't intend to prove up, but we found this big geological slump, which is centered over the eastern area of of a big alluvial a big fan, submarine fan.

18:10 And then on the right hand side, you can see the predrilled amplitudes, and we can see a dull area around MOU two because effectively the the amplitude response is subdued by this big slop sitting on top. So effectively nothing has changed in terms of contingent resources. The price is the same. It's just we have to get to the top of that price to realize the contingency resources. What it does mean also is the MOU one rigorous testing has assumed even greater priority, and we're going to push ahead with that now ahead of anything else simply because we think now from what we've learned from MOU two already is that the MOU one sand could communicate with significantly bigger area of around 20 square kilometers up to the edge of MOU two in the area that is not affected by this slump feature.

19:11 So, positively, we we are now encouraged that the testing will actually demonstrate potentially more connectivity with this wider area. What we also know now is, obviously, the reentry and rigorous testing of MOU two will need to be done to validate the primary target. At present, MOU two, as I keep reminding everybody, has no impact on contingent gas resources. Effectively, probably the chance of success has increased because of our evidence now of better sand development in this eastern area and also because we have an excellent gas seal confirmed by MOU two.

19:59 And then coming close to the end now, you'll be glad to know, from the technical side, is that the MOU two initial results and ceiling potential has set up another area defined by the MOUA potential well there on the right hand side, which will test or can test not only the main primary target as well, but also all the shallow targets right up to probably the TGV six SAN. So it includes, for example, the SANs that were part of the original CPR done in '2 before 2020 for the shallower sands, middle sands.

20:47 So that well would be potentially a very high value well, which ultimately has to be drilled after we completed the current program as we see it present. When we look at what this has done to the gas market, well, again, nothing has changed. The gas market in Morocco remains, as we always said, remained pre drill. Nothing has changed in that respect. There's been five wells drilled since MOU one, and they haven't impacted the gas market whatsoever. Industry still needs gas. Global gas prices have come down a bit, but you'll remember that we always set our price at $16 an MCF pretty much maximum at this time simply because it's about what people can afford to pay.

21:34 There's absolutely no point in having a huge gas price that industry can't pay, whether it be in Morocco, UK, Ireland, wherever, because that just is not sustainable for that particular industry, particularly in Morocco. So the price doesn't change even if gas prices come down further, which may happen in the next three or four years. We set our price at a very conservative level initially so that we can effectively get a very good return, but without putting putting our customers out of business. Okay. So that's the technical aspect. And the reason why I've labored the technical aspect is because when you drill a well and you get an initial result, whether that what whether it's win, lose, or draw, the the temptation is to make an immediate judgment. Well, we didn't make an immediate judgment as similarly on MOU one. We were forced into making an immediate judgment based on the desire to get by somebody that we work with in Morocco wanted to to get an r s RNS out as quickly as possible.

22:42 In this case, we spent our time on the RNS making sure that we delivered the message correctly. But more importantly, now we've taken the time to explain, you know, the RNS in terms of what we actually saw in the well. So I guess I can move on to questions now, Jake. Paul, absolutely. And thank you very much indeed for your presentation this morning. If I may just give you a moment there. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while Paul takes a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

23:30 Paul, we did receive a number of presubmitted questions ahead of today's event. I mean, as you can see there in the q and a tab, we have also received a number of questions throughout your presentation this morning. So firstly, thank you to all of those on the call for taking the time to submit their questions. And, Paul, if I could just hand back to you to respond to those where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Yeah. I I would I would just hasten to add that the question is actually more important than the technical presentation. The the presentation is for background to to answer any questions. So the first question I I noticed was something related to the latest timelines for testing MOU one and whether this requires a rig in country. And can the testing of MOU one go on at the same time, therefore, as MOU two? Well, firstly, it doesn't require a rig, so it's irrelevant where the rig is for the testing of MOU one.

24:26 In terms of a a timeline, we're going to move that head as quickly as possible, and that means we're relying on effectively getting feedback, hopefully, within the next week or so of when the testing equipment can be moved to Morocco. And we have two different for testing, one coming from United States and one coming from somewhere else. So I can't tell you it's going to be today, tomorrow, or next week. All I can say, it'll be as soon as we can confirm when we can get that equipment into Morocco. So that's our priority at present working on that. Another question said that the present drill cannot go ahead. Is sidetracking or drilling a DVD way too well possible?

25:16 Yes. That's always possible, but that's not our preference. Our preference is just to deepen the current well and test it. We believe we can get the solution to the mud problem in terms of the chemistry of the mud that we need. So we don't see a sidetrack or at present as as a viable option for us. Our priority is to get to TD in the vertical straight pole.

25:45 I've just seen there there's another question on MOU on testing. Well, I think I've addressed that, so I can't add any more color to that right now, but we will add color color to that immediately. We get confirmation of the delivery date for the testing equipment into Morocco. Then there's a bit of a diversion on one of the questions regarding moving to Trinidad. I'll deal with this, and there's a question, I think, on Ireland following that, simply just to get them out of the way. The main focus is Morocco. So the question was, what's the time scale before revenue is expected in Trinidad And a corporate presentation of Challenger 03/16/2022 stated current negotiations with ministry could see this license for forfeited or restructured. This doesn't sound very positive. What did you see that Challenger didn't?

26:37 Well, the background to that is that in 2017, we made a bid for Massey's, who are our current c o two partner, in Trinidad for Cori Maruga, a field that adjoined sorry. For Maruga West, a field that adjoins Cori Maruga and extends into into into Cori Moruga. So as a result of that, we got a lot of information and a lot of geological understanding. And then as we developed the c o two EOR capability in Trinidad, the ministry is very

27:09 keen to pursue c o two EOR. Now the value of Corimaruca, as we see it, both geologically and strategically, is that it's an undeveloped field. So that means that the reservoir pressure is near virgin, very much higher than all the old mature fields. So it's the only example that I know of at present in Trinidad where you could do miserable c o two EOR, and you could get significant increases in potentially producing oil. There are several wells that could be worked over to gather data and to get primary production. The ministry is keen to get c o two EOR done. We're the only party that can do c o two EOR in Trinidad. They set up a steering committee in 2021 to develop c o two EOR.

28:00 They're in constant contact with us, that committee, about c o two EOR development and rollout in Trinidad. So that's what we add to the situation that Challenger couldn't add. That is no criticism of Challenger. They inherited the asset from Columbus, inherited it from a local company in Trinidad. So we just see things differently geologically and in terms of applying c o 2 EUR. We see it as a fantastic opportunity. Yes. There's a negotiating negotiation to be had with the ministry, but we will we will be quite happy to get involved with that with Challenger, and we're very comfortable that a result will be positive but will take some time, you know, with states and ministries. You you can't actually give a timeline to anything as as probably most of you know.

28:53 So that's my answer to that. The next question refers to Ireland. What was the catalyst to spend money on a data room? Well, we have the party we've selected to continue negotiating with have recently told us they might have an answer for for us during q one. The thing that I would say is that there is a rumor that Ireland might try and enforce a 75% windfall tax on various energy companies in Ireland, and that compares with, like, European average about 33%. That won't be a great signal to investors in Ireland from the industry side, but, hopefully, there will just be a one off. But so from the point of view of the data room exercise and and the time we've spent on that, it's been very valuable.

29:44 And we've now got one party that that will give us a decision, they say, before the end of q one.

29:55 Not preempting whether that's decision will be positive or negative because there are other strategic factors like the windfall tax, for example, that would have to be taken into account. Regarding MOU 2, another question, did this encounter clay and associate does the encountered clay and associated logs change the predrill resources expectations? Absolutely not. They're not in the in the target formation. They're above the target formation, so nothing's changed there. There's another very important question here, which is very a good question is why do you believe no gas shows in the shallow zones at MOU 2? Was there gas, but was it held back by the drilling mud specified for high pressure? More information if possible, please. No.

30:41 I don't believe it was held back by the the heavy drilling mud. We believe, and now it's confirmed by what we have today, is that the gas couldn't get into the shallow section here because of that thick 200 plus meter seal on top of our fan. So we have no faults here that actually penetrate through the seal. We can't get through 240 meters of seal to actually charge the the shallow part of the section in MOU one. And the other factor here is the background gas and and and a couple of little small anomalies we've got are not the same gas signature as MOU one. MOU one was clearly dry gas right from the base of the section all the way up to virtually the top of the section. And the difference between MOU one and MOU two is that MOU one, there's a major fault up against the reservoirs in the shallow section that has charged everything with dry gas.

31:43 In MOU two, all the faults terminate below this fantastic seal, so everything should be trapped underneath the seal at our target level. And that's what makes us so encouraged. If we had seen gas in the shallow section, then we would be concerned that gas had leaked up. But here, clearly, the gas is trapped right below this thick seal in these bright amplitude events covering over, as I say before, 30 to 40 square kilometers. That's a fantastic opportunity that we always thought that opportunity was there, but it's been reinforced by what we found geologically. The frustrating and annoying thing, and believe you me, as the larger one of the largest shareholders, if not the largest shareholder, and a geologist, and having put so much time and effort into this well, and Lonnie too in terms of putting the operation together. There is nobody on this planet or even in this universe, if aliens exist, in this universe who who are more gutted than I and, Lonnie, that we didn't quite get to the target. But we will get there, and whatever it takes, we will get there because the last thing on Earth we are going to do is to leave this for somewhere else to follow-up and take on. We will get this done one way or the other.

33:00 So next question is, given the excellent seal of our v m o two primary target and based on the logging data so far, would you consider raising or lowering chance of success? And in both for the MEH primary target, and in both cases, given the geology of surprise, please explain the rationale. So I think I've done that. We we've increased in house the chance of success because we now have a perfect seal model that we didn't have before because gas was escaping all up the section in MOU one. We have evidence of far better reservoir development and lots more sands here. So from that perspective, we see the chance of success has increased.

33:45 How much? I won't would put a judgment on it because weighed against that operationally, we have to get to this target. Another question, are there any costs incurred for the Star Valley rig currently MOU 2? Will the drill at MOU 2 be completed with the predicted drill budget? No. There are no costs right now for for the next couple of months, at least, for keeping the Star Valley rig on-site. That that's just a safe location for it to be in a secure area that we have effectively cut by security guards. In terms of where we are in in in cash remaining cash, etcetera, we have quite a lot of accounting to do on this well. We also have to cost out the mud in particular that we will need to purchase because it'll be new mud to reenter MOU two. So we can't do that until we know the composition of the mud and where we can source it source it from and how much it will cost to take there. So that's still work in progress. As soon as we get more clarity on that, we'll we'll update the market, but that will take a little bit of time. As you imagine, I think we're up to a 114 invoices as of today.

35:00 Most of them are small, some are larger. So it's a huge accounting exercise for us as a small company, but we're we're pretty much on top of things now. So we're we're comfortable about the well costs, but there's still a bit of work to do before we decide where we're at in in in what we do next and what we prioritize next, which will be MOU one testing. With only 250 meters to go in the drilling of MOU two, are you concerned that no GAS HOS been found so far? Well, I think I've dealt with that. We're not concerned. We're actually encouraged because the seal potential on a on a bigger gas accumulation has been confirmed. You know, there was always a risk, as we said predrill, that you could have a massive gas column, and we couldn't understand how a massive gas column or a massive gas discovery could be supported just solely by the the overpressured clays that we saw in MOU 1.

36:01 Well, now we know. Now we now we know we've got at least two hundred and two hundred and forty meters of seal, and nothing will get through this this unorthodox geological slide with all the mud and and and the rubbish in it. It's hard enough to get the drill bit through, let alone gas, and this thing would have slid in place before any gas migrated from the deeper section. So it slid in place very early right on top of the reservoir, so very early in the development of of the system we're trying to test here. So that meant that once it was in place, there wasn't a hope in hell of getting gas through it into the shallower section. Okay. There's another question on providing some guidance as to structure of any potential corporate corporate actions available to the company, would you sell the whole license, etcetera, to monetize?

36:57 It's a bit premature to say that, but what I would say is and we haven't really discussed it, so the the specifics of this. But given that any kind of corporate transaction would require government approval if you were disposing of a license or a part of a license, for example, and government consent, which could take a long time, one of the, you know, preferred options could be in the early stages of developing this opportunity and and realizing the potential would be to sell potentially an interest in the in the shares in the subsidiary, in the Moroccan subsidiary. Not a controlling interest, but a certain a certain interest that eventually could lead to an option, say, to to buy the entire company in a success case.

37:48 So that would make more sense because it would not require any government consents, but it would also give the company comfort that whoever might come in on that basis would be sufficiently large enough to take out the whole thing if if we prove up what we think we're gonna prove up over the next in 2023. So that's probably my preference at present. We haven't discussed it in detail with financial advisers, so this is just basically something that that looks to me to be more doable than a corporate transaction that would involve lots and lots of government consents and possibly even regulatory consents because the well, definitely regulatory consents because the materiality issue would would come into play in terms of a a disposal.

38:44 So that answers that. It's a nice question to have because it's people are thinking some people are thinking positively like us. If we look at another question here is about the CPR and MOU Northeast. Is it currently being worked on, and when do you expect to update shareholders with findings? It is all the technical work for it is being completed to put into the CPR. In terms of a timeline for it, well, we have to update the CPR on Morocco anyway with this new well eventually, and we also have to do a CPR for Trinidad because for Corie Maruga. So we're trying to roll all those CPRs into one new c one new CPR.

39:33 And the other issue for us is that previous provider of CPRs, SLR, no longer had the capacity at present or in the very near future to do the CPR. So we're sourcing maybe another party, which we're in discussions with, to do the CPR. So there's gonna be a bit of a time delay on the CPR. I I don't know how long yet. Depends when we complete our discussions with the new party. But it would make more sense for us to do a CPR on everything rather than just MOU Northeast. But we will obviously update the market as soon as, know, we get progress on that. Okay. Another question. Do you agree that the effect I like this question. I hadn't actually thought of this, but I really do like this question. Do you agree that the effective seal suggests that the gas cloud is due to a fill and spill situation?

40:32 And if so, do you think this indicates that gas volumes are more likely to be at the p 10 rather than the p 50 levels? So firstly, I hadn't thought about the gas cloud in this context, but, yes, absolutely right. And apologies to that person who asked the question that I didn't think of it before him or her. But in terms of the gas volume, it's more likely to be p 10 than p 50. Well, yes, if in some respects, but the the thing is that the p 10 versus p 50 really depends wholly on reservoir thickness. The area doesn't change at present. Area is is confirmed, but reservoir thickness is is the key. To to get to p 10, you've got to have 40 odd meters or 50 meters of reservoir net reservoir.

41:27 And probably, I say we're we're we're at p 50, what can anticipate reservoir thickness to be. But we don't think we're actually in the main reservoir fairway yet that the piece of reservoir we've got in this debris flow came from probably slightly more marginal to the main axis. The main axis is what we're actually drilling, and that looks on seismic to be particularly good. But what we have noticed as well is that at this new sweet spot location for the future, just to the west of MOU 2, there are probably three cycles of sands which are not all gas bearing at MOU 1. But in this particular location, all the seismic indicates that they potentially could be. So if we look at a little bit about what's being published on Antarct two, you'll note that effectively in the cartoon that that shows Antarct two, that looks as though there's seven seven different gas water contacts in different sands. So we're working on the basis that everything will have a every single cycle will have a separate gas water contact.

42:40 So that's positive because you can then stack up resources to get closer to the p 10 if these other cycles come in as we think they could do at this new potential MOU a location. Another question is, do you think that the unexpected lithology result will result in a deeper than expected reservoir, which in turn will get greater gas volume? Well, we had a section a whole column had potential reservoir over 500 meters down to sorry, 400 meters down to 1,500 meters, which was the original TD. So we're not yet out of our column. So true to say that the the the top of the reservoir will be deeper still within this this this structural closure and then this closure of the amplitude fan. And because it's deeper by probably a 100 meters at least than predrill expectations of where we will find this good sand is, then there will be a bigger volume of gas based on gas expansion factor. But it will be still approximately approximately at the same depth or a little bit deeper than MOU one.

43:56 So, yes, then they might be a bit more volume, but I don't think you're talking about a huge increase in volume. It's the reservoir thickness that is the key driver for volumes. Okay. There's another question here about have the adverse clay reactions damaged the wellbore in any way or the ability to get clear wireline volume results or or or ability to potentially flow? If yes, can this be remedied by redrilling section with the new mud? We don't expect to redrill the section. We expect that the new mud will address the issue. We can't be totally 100% certain of that until we've done the chemistry on the mud and see and analyze how that will react to a new mud or react in the section the the mechanics of actually doing this. But, certainly, the wellbore isn't we don't believe is damaged and and certainly doesn't impact eventually getting wireline logs down. We can do another wiper trip. We've got new mud, etcetera.

45:01 We we can eventually get, I suspect, logs down and perforate, but I'm not gonna prejudge that until we've done the the analysis of the chemistry of the mud and convinced ourselves that that can find the right solution. And the right solution will be found. Lonnie's Lonnie knows who's very experienced in drilling in Morocco knows, you know, what what we need to do to find a solution. It's just annoying. It's always annoying. You know? Okay. Next question is here. You mentioned the third well-being drilled between MOU 1 and MOU 2. What is the realistic timing for this to happen post MOU two completion?

45:47 Well, we have preordered some equipment for that well. There's more equipment that needs to be ordered if it were to be drilled in the time frame of what which we would like, which would be certainly probably maybe end h one this year after we complete all our other bits and pieces. There will be a time gap potentially between completing and testing that well, though, because the casing that we need to test that particular well, if it were drilled, would take sixteen to eighteen weeks to deliver currently. So you can work back from that. You can drill the well earlier, but the the there is the issue of completing it at the same time based on the long lead items.

46:37 And that's the worst case worst case long lead item is the completion casing. You state well, I've dealt with that question. You stated the rig wasn't costing any money in. What does that mean indefinitely until the back of the news? No. It's not indefinitely. Certainly, for over the next couple of months or when, you know, we want to be able to be in a position to to to move the the next stages of the operations along. So we're we're comfortable in terms of where we're at for the next couple of months with with the rig. Another question, Baraka, next phase, are we still obliged to acquire three d seismic? If so, what are the costs, and how do we intend to pay for it? Yes. In the next phase, we don't we will have to shoot three d seismic. That's part of the commitment.

47:25 However, we've got at least eighteen months to two years to do that. We do not see that as being a key objective for us. We see the possibility on the back of what we're doing now on on the the gas there are parties who are more interested in the oil potentially, one or two parties at least that are more interested in the oil, it would be advantageous to us them to shoot the three d over that part of the license for equity in Jurassic oil, basically, and we will focus on initially focus on the gas. We have MOU Northeast, but we're developing a number of other prospects on the license. We have to relinquish 25% of license this year, but we have plenty of areas, fallow areas to relinquish. So I would prefer we found a partner to progress the three d and the Jurassic.

48:24 Simply don't have the capacity as a small entity to do both things at the same time. And I would prefer to focus on the high value gas initially, which is easier to get to market than oil. Morocco doesn't have a refinery, so that'll be you you know, know, it it's it's going to be a bigger company play. Yes. We can kick start the exploration, but we don't want to do that at the expense of pushing the gas. Then I've got a question here. Are we still fully funded for the remainder m a u two drill and the testing of m a u one? Well, as I said before, we are going through the exercise of accounting for the well, costing out the the additional things we need, such as mud, etcetera. And when we've completed that exercise, we will know exactly what we can do in the short term, on the medium term, and what what extra equipment we need, etcetera. It's premature to say anything about funding other than the fact that we are pushing ahead, obviously, with the MOU one testing program.

49:31 Okay. Now I've gotta go back up to right. Okay. So okay. We've dealt with that question. There's a lot of questions coming here, which I think are repetitive. I'm looking at yeah. So there's a question from Mike n here, which is quite technical, about the shale, about the reservoir, appears to be more problematic. Is this due to higher than expected high sensitivity swelling? Well okay. No. It's it's quite different, actually. It's related to the potassium content and the fact that potassium is is, we think, reacting with the silica in the mud.

50:28 Do we have a program on MOU one, David? So he's right to say it's a year since MOU one has been drilled. Yes. We've always had a program, but that program for testing has been evolving as we've got more information and particularly now from MOU two. There are a number of zones we could test in in MOU 1. And the idea originally was to test as much as possible, including everything up in the shallow section. However, you know, there's a cost in doing that. And the idea would be if you could test two or three wells at the same time, then the cost of testing comes down. So that was why, you know, we we kinda delayed. We wanted effectively to be able to test all these wells at once similar to what SDX do for for most of their wells often in in the Raab Basin.

51:23 So it'll perforate them all in one go. So we can't afford to wait any longer now. So, you know, obviously, now we're we're relooking at MOU one testing program, but there's a very specific zone which we want to maximize flow from. And because of that, you know, we're gonna do a little bit more work very quickly to determine what we need to do to do that in in the perforating layer. And, also, we need to be cost conscious because we're gonna have to come back and perforate the next well and the next well after that. So we don't wanna be loading up too much cost on just one well. So we we might be more selective in the in the perforating program, we're very happy now that we've got a zone, the zone, the prime zone laid out, and we're gonna focus on that and not we think that can deliver what we want it to deliver. We're not gonna add in anything shallow at this stage.

52:22 Right. What else I got here? So there's a question here about funding a new well MOUA. Yes. That's for the future. It's it's not something we're gonna do right now, obviously. Right now, the the focus is on testing MOU two and preparing for reentry of sorry, testing MOU one and preparing for reentry of MOU two. So there is the possibility still of getting revenues from Trinidad, but, realistically, I don't think given the the way ministries work, I don't think, you know, this is going to happen before we would like necessarily to drill MOU a.

53:19 However, you know, as I said, our focus is MOU one testing and MOU two reentry, but we'll keep MOU a available as a well to drill subject to determining way of financing that particular well and only that particular well. There's a talk here about high dilution to push for a full asset sale. Yeah, that's a good comment, actually. I I think, you know, we we would would have would have loved to push for an asset sale this year, but the reality is we might have to take a step back and do a gradual process, as mentioned before, taking an interest in a shareholding interest in the subsidiary and and and moving the gas along and proving up more volume, which is one of the intentions of MOUA down the road before the asset sale. The danger here is is is quite a person at points is that if if we pursue pursue everything too quickly, we might be leaving too much value on the table. There's a balance here that we have to look at.

54:27 But our priority right now is not this. It's about testing MOU one and getting back into MOU two. Based on the current slide, are we assuming maximum 10,000,000 cubic feet a day from MOU one and MOU two? No. The 10,000,000 is is effectively a figure used to for our project economics on CNG. You know, wells can do more than that. Wells can do less than that. This is a particularly good reservoir. So where you do find gas in it, you will get a good flow rate, but you have to get that flow rate initially to getting your end users in the market. So 10,000,000,000 is is what we're using as the initial, you know, step one to get to a CNG development, and and 10,000,000,000 is actually 25% more than Raab Basin was producing at its peak. So it is quite aggressive, but the difference is that we've got a very big structure here with potentially good deliveries from good gas deliveries from the sands that we have encountered and that we will encounter in MOU 2.

55:44 Okay. I'm waiting down through these questions. I've given you a there's a question here on what updates are there on Trinidad and Ireland. Well, I've mentioned where we are in Trinidad, and I've mentioned where we are in Ireland, and there's nothing else I can add to that at this stage that I haven't said. There's a question here on do we have an expectation of extension of time decide which 25% to hand back to the on the Moroccan license? It's kind of irrelevant. We already know what 25% we want to hand back.

56:32 It's such a big license, seven and a half thousand plus square kilometers, that there's plenty of room in that license to give back what we want to give back. So that isn't an issue for us. We'd be quite happy to hand back 25% right now or in three months' time or six months' time or whenever. What is the view of the analogue SANS and MOU two? And please comment on lack of gas shows in the sands. Well, I've already explained why that is. We don't because the thick seal, we don't expect any gas to get into the section within or above the seal. So another question on the 25%. We've dealt with that. So there's a question here. Kelly c, I'm a little confused. If the original plan was to test MOU one, then why isn't the testing equipment already in country in readiness?

57:36 So if you if you mobilize test equipment, you pay from it pay for it from day one. If you keep it sitting there, you pay standby. If there's no other work for it, like, there's no originally, we would have used maybe something that SDX had, but STX hasn't, you know, been testing anything recently. So you don't mobilize something and bring it in country just to sit there for one test. The cost of that would just be pretty exorbitant. So you only want to mobilize the testing equipment, and and you have to get it through customs and do all these other things when you're ready to test. And that, you know, is when you've got a bigger program. In this instance, we're gonna bypass the bigger program because we've waited long enough and moved just to test MOU one.

58:29 But it all comes down to cost. Yes. You can bring anything in country you like, and you can bring people in country too that you like, but you're gonna be paying for them every minute of the day until they leave the country. And you don't really want them to leave the country too early if you've got two or three whales to test, and you want to keep your costs down and manage your costs. Do you know the seal will not be even thicker than expected and impact the size of the reservoir? We're pretty confident it's not gonna be there's a limit to how thick it's going to be, and we're pretty confident. We're almost at that limit. So we're not concerned about that right now. And and I don't believe that that's a serious risk that the seal will be thicker than much thicker than than what we need.

59:28 So there's more questions about why the the required testing equipment is not on-site. I just explained that, like, every it's cost. You know? You can't mobilize testing equipment on-site until you're absolutely like, for MOU two, we wanted to be absolutely certain what we had to test. And we have two different systems now for testing. One would give us the option to test more section, and the other gives us, because it's a very expensive option, gives us the option to test only a limited amount of section. If m r u two had reached its its objective, then we will go for the first system that would allow us to test much more section, and that would not be much more cost effective. So in our business, you don't make premature decisions about testing equipment or services or rigs or anything because everything you do has a charge, has a cost.

1:00:27 And in this climate at present, those costs are escalating both for personnel, labor, transport, freight. So it's you have to control your costs. If you don't control your costs, just gonna get blown away in this this competitive market. How long it will take to crack the mud? Well, I don't know for sure. It shouldn't take that long from the the analysis that will be done in The UK. But the the bigger issue is until that analysis is done, we don't know how easy it is to get the ingredients, if you like, to that mud that we need to get in Morocco. And the point at present is that there is no drilling onshore going on at present in Morocco for for quite some time. You know, ours was the last the only well for for a few months now since since earlier earlier last year. So there are no services in Morocco. There are no equipment, you know, suitable for what we wanna use.

1:01:27 Everything has to be imported, whether it's testing equipment, whether it's a rig, everything. I noticed we're up to an hour, Jake. Paul, absolutely. Thank you very much indeed for being so generous of your time there. And, of course, we'll be able to give you back all of the questions that were submitted today as well as any further ones that do come through immediately after the presentation has ended for you to review. To then add any additional responses, of course, where it's appropriate to do so, and we'll publish all those responses where on the platform. But, Paul, perhaps before redirecting those on the call to provide you with their feedback, which I know is particularly important to you and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great. Okay. So I think the the first point to make is contingent resources are unchanged since the the predrilled resources are unchanged.

1:02:18 The chance of success is, we think, elevated, slightly higher, simply because of the effective seal that we needed for a very big gas con a very big gas accumulation. The predrill reservoir thickening concept is is is proven to date by all the sand we're finding in the in in the section. The geological understanding has advanced now with this new information to create another drilling opportunity just to the to west between MOU 1 and MOU 2, which we already had, but this has been upgraded now by the new information on sealed and and sand distribution potentially. The industrial gas market remains unaltered. It's still a vibrant market waiting for for the first party to try and get gas more new gas into that market.

1:03:05 MOE one rigorous testing is is now, obviously, was an objective, but in context of testing all the wells at the same time, now it's a standalone objective because we can't delay any longer on the testing on that waiting for for results of MOU two or any future one. Yes. There are questions about why did we do this? Why didn't we do that? That's great. You know, if you're BP or if you're a shell or if you're a large company, you have many different options because you have a balance sheet to support it. We don't have all those options. We our job is to try and get the best result we can for shareholders with the capital that we have, available to us.

1:03:52 And, you know, as a larger shareholder, I'm more concerned about getting that value and driving to get to that value. I said before in during this presentation, you can count on the fact that, Lonnie and I are working to get this done. And I say that I don't say that flippantly. I say that because there's so much value here both from the from the geological perspective, geologists and geophysicists, also from the commercial perspective and for also from the strategy perspective. So we will get this done. On that basis, I think I'll just leave you with that message. It will be done. Paul, that's great. And thank you once again for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations?

1:04:46 This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of PREDATOR OIL and GAS HOLDINGS PLC, we would like to thank you for attending today's presentation. That concludes today's session. So good morning to you all.