28 May 2012 07:00
28 May 2012
PRESIDENT PETROLEUM COMPANY PLC
("President" or "the Company")
Argentina Operations Update
President (AIM : PPC) announces an update on its Argentine operations.
Well DP-1001- Dos Puntitas Field (PPC 50% working interest)
This newly drilled well continues to make good progress and is maintaining stable natural flow rates of approximately 300 bopd gross of good quality light oil, from only the carbonate interval, without stimulation or pumping. The oil continues to be sold for in excess of US$ 70 per barrel.
The flow rate demonstrates the good quality of the carbonate reservoirs in the Dos Puntitas Field with the potential of the A6 and A5 sands yet to be unlocked in this well.
The Company believes the confirmation of the original oil water contact in this well not only converts probable reserves to proved, but also introduces new reserves from the A5 sands.
Well DP-1002-Dos Puntitas Field (PPC 50% working interest)
This new well was a step out targeting the southern extension of the Dos Puntitas Field, known as the Southern Prospect Area, approximately 1.4 kilometers from DP 1001. The well successfully identified and intersected the same oil bearing carbonate reservoir as DP-1001 at a level of 3146 metres and management estimates it has confirmed the presence of new reserves in the previously undrilled Southern Prospect Area. The Southern Prospect Area had not been included in previous reserve estimates. The oil column was penetrated too close to the oil water contact for commercial completion. Accordingly, DP 1002 has been temporarily suspended and shut in pending a sidetrack. The sidetrack will be done using a more powerful rig, likely during Q4 2012/2013 and will kick off below the 9 5/8th casing set at 1600 meters. The side track will form part of the overall development programme at Dos Puntitas, and the next step is to update the seismic depth conversion model to locate follow on development wells and to quantify the aerial extent of the new reserves in the Southern Prospect Area. This well has improved our understanding of the structural configuration of the field and opened up new development possibilities
Dos Puntitas Field - Redevelopment
President is now ready to undertake full scale redevelopment of the Dos Puntitas Field. Integrated development planning is underway and will be complete during Q4 2012 to enable full scale development drilling towards the year end, continuing into 2013. President is currently planning high impact, high production horizontal wells tapping into the reservoirs which President has now proved are in place. A new, more powerful rig will be required to enable drilling of laterals to efficiently drain and maximise production flow rates from both the carbonate and sandstone reservoir layers.
Fraccing and Workover Programme
The Frac programme will initially focus on the Pozo Escondido Field where a program has been designed to unlock commercial new reserves from the large, recently identified Oil in Place announced on 19 January 2012. If successful, the programme will open up a new play fairway in the Puesto Guardian Concession, which will have considerable follow-on reserves growth potential. The initial fracs are planned for Q3 this year and if successful, a rolling program will follow.
Well intervention and work over opportunities are also being assessed concession-wide and announcements will be made as specific work programmes get underway.
Production
Given the expanded opportunity set and the desire to high grade and rank all drilling targets before contracting a new, more powerful rig to undertake the full field redevelopment campaign, it is prudent to extend the period in which President expects to attain its initial Company production targets (1300-1500 boepd) until Q1 of 2013. President expects to realise the full value of the concession through successful execution of this work program through 2012 and 2013, and thereafter as production builds through field developments programmes.
Peter Levine, Executive Chairman of President, commented:
"We are encouraged by what we consider to be the discovery of new reserves in the Dos Puntitas Field and the increased production which will follow.
"Work continues on many fronts, with the frac and workover programme taking centre stage now for the coming months, while field development planning for "smart wells" will be complete by end Q3.
"We are approaching the redevelopment of the Puesto Guardian Concession on a considered step by step basis, with the objective of maximising value through selecting the most advantageous field development scheme and the opportunities which offer the most material increase of reserves. By applying ourselves correctly, we are confident that this will be achieved."
For further information contact:
President Petroleum Company
John Hamilton, Director +44 (0) 207 811 0140
Ben Wilkinson, Finance Director +44 (0) 207 811 0140
RBC Capital Markets
Jeremy Low, Stephen Foss, Matthew Coakes +44 (0) 207 653 4000
Jefferies Hoare Govett
Simon Hardy, Max Jones +44 (0) 207 029 8316
Pelham Bell Pottinger +44 (0) 207 861 3232
James Henderson, Mark Antelme
Dr Jonathan M Cohen, FGS, C Geol, Executive Vice President Exploration, meets the criteria of qualified persons under the AIM guidance note for mining and oil and gas companies, has reviewed and approved the technical information contained in this announcement.