Predator Oil & Gas (LSE:PRD) said that preliminary testing of its MOU-6 well in Morocco recovered only completion fluids, with no gas inflow recorded. The well has been suspended for potential deepening, and the company said its emphasis will now move to partner negotiations.

What Predator Oil & Gas announced on MOU-6

The MOU-6 well was perforated over 19.8 metres of the gross upper TGB-6 Fan interval, between 825.7 and 845.5 metres, using larger 4.5-inch tools. Nitrogen lift recovered diesel and brine attributable to completion fluids, with no gas inflow reported.

The company said a downhole tool recorded a "formation pressure of 1195 psi at 813.27 metres depth", which was "not fully stabilised". It added that "Shallow gas shows (up to 2.69%) have been sampled for compositional analysis." The release stated that "MOU-6 has been suspended to allow for potential deepening of the well to the TGB-4 interval."

Chief Executive Paul Griffiths said: "We are naturally disappointed that MOU-6 has not delivered in line with pre-drill expectations." He added: "However, the first successful perforation of the target formation and the well data collected is invaluable" in helping calibrate gas potential interpreted by independent technical log analysis in MOU-1, MOU-3 and MOU-4.

Possible reasons for the result

Predator listed four potential explanations for the lack of inflow. It rated "Extreme low permeability of the Rock Formation at this location" and "Mechanical Blockage Downhole if the perforating tunnels collapse in relatively unconsolidated formations" as possible, and "Severe Formation Damage (High Skin Factor)" as unlikely. Its preferred explanation was "Combined low permeability with low gas saturations – more likely." Post-well desktop and laboratory studies will examine the causes, although no timetable was given.

Strategy in Morocco and Trinidad

The company said it intends to align with a partner capable of taking exploration forward, and Mr Griffiths stated: "Emphasis will now concentrate on partner negotiations." The announcement did not name a partner or describe deal terms. Further work set out includes evaluating the potential for unconventional gas through well interventions, an independent study of the area tested by MOU-1, MOU-3 and MOU-6, and "Costing a programme to deepen MOU-5 to the Trias to assess a potential for thermogenic gas and associated helium."

Attention is also shifting to Trinidad. Mr Griffiths said "the operating team is in the process of transferring to Trinidad, where the Snowcap-3 well is the focus of drilling preparations." He also confirmed that the first of two instalments of deferred consideration for the 2025 Acquisition of the Trinidad Business and Assets has been completed.

Risks for shareholders

The update matters for followers of LSE stocks in exploration because MOU-6 did not meet the company's pre-drill expectations. Any further Moroccan work depends on partner negotiations whose outcome and terms are unknown. The announcement did not disclose the company's cash position or funding plans, and studies into the cause of the result have no stated timing. Exploration and drilling outcomes in Trinidad are also uncertain.

What investors may watch next

Investors may look for the findings of the post-well studies, any announcement on partner negotiations, decisions on deepening MOU-6 or MOU-5, and progress towards drilling Snowcap-3 in Trinidad.

Predator’s shares are admitted to the London Stock Exchange’s Main Market. The MOU-6 outcome shifts the immediate emphasis towards Moroccan partner negotiations, further technical studies and drilling preparations in Trinidad.