Introduction

The Guercif area is located approximately 200 kilometres east of the producing Rharb Basin gas fields and approximately 100 kilometres northwest of the Tendrara gas project.

In Dec,2018,Predator Oil & Gas Holdings announced that their application for an exclusive licence for hydrocarbon exploration and appraisal onshore northern Morocco has been accepted by the Office National des Hydrocarbures et des Mines (ONHYM). The agreement emphasises the renewed support for the sector off the back of rising oil prices.

The exclusive licence covers an area of 7,269km² which will allow Predator to explore the area for gas. Predator will be operator through its wholly-owned subsidiary Predator Gas Ventures Ltd. onHYM has the right to “back-in” for up to and including 25% equity in the event of a hydrocarbon development by paying its share of forward costs.

The work programme for the Initial Period will include 250 kilometres of reprocessing of existing seismic data and the drilling of one well to test a large seismic anomaly interpreted as being indicative of the presence of shallow Tertiary gas.

The initial target for gas lies just 9 kilometres north of the Maghreb – Europe gas pipeline, which has spare capacity in the event of a major gas discovery, which is the desired objective of Predator’s exploration planning.

Following an analysis of existing 2D seismic and well data in conjunction with an appraisal of the gas market and the Company's project economics, Predator retained SLR to carry out a third party prospective resources audit (CPR) of the potential in-place hydrocarbons initially in the first tier Moulouya Prospect and the Triassic Prospect, in the Miocene Tortonian and Triassic TAGI reservoirs respectively.

SLR has reported that the Miocene Tortonian reservoir in the Moulouya Prospect has a Best Estimate gross gas in place of 646 BCF with recoverable Best Estimate prospective resources of 320 BCF net to Predator using only a 66% recovery factor (High Estimate 659 BCF net to Predator based on higher in-place gas).

SLR report that similar gas plays to the Moulouya Prospect are commercial in the Rharb Basin where the discovery rate is "remarkably high". An active hydrocarbon-generating system is confirmed in Guercif for biogenic and thermal gas and is supported by the presence of numerous credible seismic amplitude anomalies.

SLR indicate that use of the 48" Maghreb-Europe gas pipeline ("MEG") to export gas is technically feasible and that there are no existing capacity, market or technical reasons why Predator could not utilise the MEG to commercialise any gas discovery in Guercif.

The in-country gas market includes the potential to sell to cement plants and local power generators. The Office National de l'Electricité ("ONE") is encouraging private operators to build and operate power plants to satisfy rising domestic demand and a number of such plants are to be constructed along the MEG, including Oued Al Mekhazine (2 x 400 MW capacity). Electricity transmission capacity is to be raised by a further 2,100 MW to reflect increasing demand.

Additional prospectivity is referenced by SLR, including an updip appraisal of possible logged gas-bearing intervals in GRF-1. SLR postulate undefined gross resources of 10 to 200 BCF for this target.

SLR also refer to 9 prospective Triassic and Jurassic leads, developed previously by ONHYM, with mid case recoverable volumes stated by onHYM to range from 18 to 366 million BOE. There is a large surface oil seep around the TAF-1X well adjacent to one of the Jurassic leads. Seismic reprocessing and new seismic acquisition will be required to further evaluate and better define the additional prospectivity.

Operator

National Office for Hydrocarbons and Mining(ONHYM)(Morocco): 25% interest

Predator Oil & Gas(United kingdom): operator with 75% interest