(Alliance News) - President Energy PLC on Monday reported the completion of the LB-1001 well in the Las Bases field in Argentina, which has validated robust gas production.
The Latin America-focused oil and gas firm also separately reported a swing to loss for the first half of 2020 on declining oil prices.
For the six months to the end of June, President reported a pretax loss of USD3.5 million compared with profit of USD249,000 the year before.
This was on revenue that declined by 41% year-on-year to USD13.7 million from USD23.3 million. Although average daily production increased by 14% to 2,747 barrels of oil equivalent per day from 2,461 barrels, the average realised price per barrel dropped by 43% to USD31.2 from USD54.4.
President Energy said the price fall was the "most sudden peacetime fall in living memory".
Looking ahead, the company expects average production for 2020 as a whole to be between 2,800 to 3,000 barrels, reflecting a 16% to 24% rise from 2,414 barrels the prior year.
Concerning LB-1001, President Energy said the first interval of two metres was tested at the bottom of the well, and flowed gas at 50,000 to 100,000 cubic metres per day. However, since this was a thin interval, President noted that it would deplete in a short time, so it tested the next zone above of eight metres.
The interval has been tested, and has demonstrated that on production it would flow initially at 100,000 cubic metres a day with good pressure, the company said.
LB-1001 will be prepared to be placed in production by the end of November, to coincide with the coming online of 75,000 cubic metres per day of new output from the Estancia Vieja field workovers.
"The concentration on our core businesses, margins and the strategic decision taken to pro-actively materially reduce debt in times of sustained lower prices have resulted in a sound financial and trading platform on which sustained growth can be developed. In particular it would be wrong to overlook the organic potential of our producing and exploration portfolio," said Chair Peter Levine.
Shares in President Energy were up 4.2% at 1.54 pence on Monday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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