PPC.L Share News (PPC)

(Sharecast News) - President Energy announced testing success at the old shut-in well 'LB-1', at Las Bases field in Rio Negro, Argentina on Thursday, reporting that workover and testing of the shallow Centenario interval in the old shut-in well was a follow-on from the successful newly drilled well LB-1001.
The AIM-traded firm said gas "freely and continuously" flowed to surface in commercial quantities during the test, at choke sizes ranging from 4mm to 16mm.

It said there was the potential to "materially increase production" by performing artificial stimulation.

President said the test represented the first time any hydrocarbons had been tested and flowed by the company from the previously-undrained Centenario interval within its concession areas.

The commercial production of the shallow Centenario would open up the potential to cost effectively drill the prevalent shallow interval elsewhere in the company's licences, the board explained.

It said the Centenario formation would make a positive addition to President's end-of-year reserves, given no reserves of any category were currently booked for the formation.

The well would be placed on production before the end of the year.

"This is an encouraging result," said chairman Peter Levine.

"Whilst in the context of our growing Group production, the expected pre-year end initial production can be said to be more incremental than material, the testing success has a potential impact of somewhat greater significance.

"Taking into account the now proven produceability of the reservoir, the shallow depth thereby meaning modest costs for drilling new wells, the potential to materially upscale production levels by artificial stimulation and in particular the prevalence of this Centenario interval over areas in our concessions, it is a potentially new play opener in at least Las Bases and perhaps others of our Rio Negro fields."

Levine said that accordingly, the result, following on from the two successful drilled wells in the last two months, demonstrated the continued potential for organic growth in the firm's onshore short cycle, high return conventional oil and gas assets, as well as the maturing capability of its teams in handling multiple work streams simultaneously.

"Step by step may seem a trite expression, but it underlines the clear and obvious positive rate of climb that President is achieving in its business."

At 1030 GMT, shares in President Energy were broadly flat, losing 0.007% to 1.5p.