12 Mar 2018 07:00
12 March 2018
Phoenix Global Resources plc
(“Phoenix” or the “Company”)
Unconventional Oil & Gas Regulations in Mendoza Provinces
Phoenix Global Resources plc (AIM: PGR; BCBA: PGR) is pleased to announce that the Government of the Mendoza Province issued its Unconventional Oil & Gas Regulations on 9 March 2018.
The Unconventional Oil & Gas Regulations are the result of several month’s work by the province and its advisers and, in the view of the management of Phoenix, they are in line with industry best practice and the expectations of the Argentine oil & gas industry. Phoenix welcomes the new regulations, which balance the mutual objectives of the industry, local communities and the protection of the environment.
The new regulations pave the way for Phoenix to accelerate the permitting process to complete our drilled but uncompleted wells in the Puesto Rojas licence area. These wells target both the Tight Agrio and Vaca Muerta formations. Phoenix applied for an unconventional licence for the Puesto Rojas area in 2017 and we look forward to this being granted in the near future.
The new regulations will also allow Phoenix to proceed with its unconventional exploration and development plans elsewhere in the Mendoza Province, which together with plans for the Puesto Rojas area, are important elements of the Company’s accelerated 2018 business plan. The responsible development of unconventional resources in Mendoza by Phoenix and others in the industry will bring further investment and job creation to the Province of Mendoza.
Accelerated 2018 Business Plan
2018 represents the first full year of Phoenix following the Reverse Takeover in August 2017.
As announced on 16 February 2018 and reproduced below, the Company plans to accelerate its drilling and completion programme in 2018 and based on results obtained from its exploration and development activities during the coming year, it expects to double its capital expenditure from approximately US$90 million in 2017 to up to US$190 million.
Neuquina basin
The 2018 planned drilling programme is focused on accelerating the appraisal and development of Phoenix's significant Vaca Muerta and other unconventional resources in the Neuquina basin. The Company plans to spend up to US$120 million of total budgeted 2018 capital expenditure on developing these unconventional resources in the Neuquina basin. This activity is expected to de-risk a significant portion of its unconventional acreage and also provide the basis for robust production growth going forward.
In the Mendoza Province, during 2017, the Company drilled nine vertical wells in the Puesto Rojas area, of which five wells were designed to appraise the unconventional Vaca Muerta and Tight Agrio formations. Further unconventional exploration and development activity can now recommence post the finalisation of the new unconventional oil and gas regulations in Mendoza Province.
The Company's 2018 business plan focuses on the drilling and completion of further vertical development and exploration wells in the Puesto Rojas area, targeting additional prospects in the unconventional Vaca Muerta and Tight Agrio formations, as well as drilling selected conventional targets. The drilling plan for the Company's unconventional assets, together with the acquisition and processing of additional seismic data in the southern Puesto Rojas and La Brea concessions, is designed to prepare these assets for large scale unconventional development.
In the second half of the year, the Company plans to drill and complete its first horizontal well in the Puesto Rojas area, following appraisal of its vertical wells to identify which horizons are likely to deliver the best rates and economic return.
In the Neuquén Province, the Company intends to move forward with its investment plans on its Mata Mora and Corralera licences. The Company plans to drill and complete unconventional horizontal wells under its existing agreement with GyP and hopes to commence the drilling of its first horizontal well on its Mata Mora block in the first half of 2018.
In addition, the Company plans to continue to invest in the Chachahuen development, with our operating partner YPF, participating in approximately 80 new wells in the year. Chachahuen should continue to deliver low risk and low cost production growth.
Approximately 85% of the 2018 planned capital expenditure is focused on the Neuquina basin, of which the majority will be deployed in Phoenix operated assets.
Cuyana and Austral basins
In 2018, Phoenix plans to invest in additional exploration and development wells in its Cuyana basin licences to increase oil production and its Santa Cruz Sur licences in the Austral basin to increase gas production.
Approximately 15% of the 2018 planned capital expenditure is focused on the Cuyana and Austral basins.
Anuj Sharma, CEO said:
“I am delighted that the Province of Mendoza has today announced the new regulations for unconventional oil and gas development. These new regulations provide a clear and balanced framework for the responsible development of unconventional oil and gas and represent a significant step forward in realising the full potential of the Neuquina basin in the Mendoza Province. Importantly, the regulations also provide the foundation for further investment and the creation of new jobs in Mendoza.
The announcement of these new regulations will allow Phoenix to recommence and accelerate our unconventional development programme and enable us to play our role in this exciting new chapter for the oil and gas industry in Argentina.”
For further information, please contact:
| Phoenix Global Resources plc | Anuj Sharma, CEO Philip Wolfe, CFO | T: +54 11 5258 7500 T: +44 20 3912 2805 | ||
| Stockdale Securities | Antonio Bossi Ed Thomas | T: +44 20 7601 6100 | ||
| Panmure Gordon | Adam James Atholl Tweedie | T: +44 20 7886 2500 | ||
| Camarco | Billy Clegg Owen Roberts James Crothers | T: +44 20 3757 4980 |
About Phoenix
Phoenix Global Resources is a London Stock Exchange (AIM: PGR) and Buenos Aires Stock Exchange (BCBA: PGR) listed independent Argentina focused oil and gas exploration and production company. The Company has over 6.3 million licensed working interest acres in Argentina (of which over 5 million are operated), 61.7 million boe of working interest 2P reserves and average production of approximately 11,070 working interest boepd in 2017. Phoenix has significant exposure to the unconventional opportunity in Argentina through its 480,000 working interest acres with Vaca Muerta potential.
The Company’s website is www.phoenixglobalresources.com
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