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14 Apr 2020 07:00
14 April 2020
Phoenix Global Resources plc
("Phoenix" or the "Company" or "Group")
Operations Update
Petrolera El Trebol S.A., Grecoil y Cía S.A., Kilwer S.A. and Ketsal S.A., subsidiaries of Phoenix Global Resources plc (AIM: PGR; BCBA: PGR), the independent Argentine focused upstream oil and gas exploration and production company, have received notice from YPF Sociedad Anónima ("YPF") that YPF is temporarily suspending the purchase of oil until further notice.
The notice from YPF states that the pandemic outbreak has led to a significant reduction in the demand for oil, which has forced YPF to reduce and/or stop production at its refineries and discontinue the reception of crude oil at the point of delivery. Whilst the Company is currently reviewing its position, it is faced with no option but to shut-down production of crude oil from its operated licences Puesto Rojas, Atamisqui and Tupungato.
On licences operated by third parties, production at Rio Cullen and Las Violetas has been significantly reduced and the Company is currently seeking to clarify with YPF the position on the Chachahuen licence.
Whilst the negative impact on the business is expected to be temporary, the Company continues to explore possible mitigating actions it can take but no definitive conclusions have yet been reached.
Furthermore, following an announcement made on 11 June 2019, a subsidiary company of the Group ("PETSA") was notified that the Province of Mendoza had issued a decree terminating the extension to the exploitation licence for the Chañares Herrados block that had previously been granted to Chañares Energía S.A. The notification was given as a result of non-compliance by Chañares Energía S.A. in relation to commitments under the concession. PETSA held an interest in some existing wells in the block through a joint venture agreement in place with Chañares Energía S.A., which established that the latter would be the only license holder of the block. The Company has recently become aware that the Province of Mendoza rejected Chañares Energía S.A.'s administrative appeal for revocation. PETSA has therefore given Chañares Energía S.A. notice of termination of the joint venture agreement with effect from 9 April 2020. This block produced on average 499 boepd in 2018 and had 2P reserves of 2.3 million at 31 December 2018, both net to the Company's interest.
For further information, please contact:
Phoenix Global Resources plc | Kevin Dennehy, CFO
| T: +54 11 5258 7500
|
Shore Capital Joint broker and nominated adviser
| Antonio Bossi David Coaten | T: +44 20 7408 4090 |
Panmure Gordon Joint broker |
Daniel Norman Atholl Tweedie |
T: +44 20 7886 2500 |
Camarco Financial PR |
Billy Clegg Owen Roberts James Crothers |
T: +44 20 3757 4980 |
About Phoenix
Phoenix Global Resources is an independent oil and gas exploration and production company focused on Argentina and listed on both the London Stock Exchange (AIM: PGR) and the Buenos Aires Stock Exchange (BCBA: PGR). The Company has over 1.8 million licenced working interest acres in Argentina (of which over 0.7 million are operated), 57.1 million boe of working interest 2P reserves and average working interest production of 10,249 boepd in 2018. Phoenix has significant exposure to the unconventional opportunity in Argentina through its approximately 700,000 working interest acres with Vaca Muerta and other unconventional potential.
The Company's website is www.phoenixglobalresources.com
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