PPC.L Regulatory News (PPC)

Monday 18 October 2010

PRESIDENT PETROLEUM COMPANY PLC

("President Petroleum" or "the Company")

Kafoury 3 Drilling Update

 Drilling expected to commence two weeks ahead of schedule

President Petroleum (AIM: PPC), the oil and gas exploration and production company with onshore producing and exploration assets in Louisiana, USA and onshore exploration licences in South Australia, announces an update on the drilling schedule for the Kafoury 3 well in Louisiana, USA.

Highlights

·; Drilling rig for Kafoury 3 well expected on location by 22 October 2010

·; Drilling expected to commence by 24 October 2010, 2 weeks ahead of schedule

Kafoury 3 Well, East Lake Verret, Louisiana

The drilling rig contracted to drill the Company's Kafoury 3 exploration well in Louisiana, will arrive on location by 22 October 2010, and drilling of the well is now expected to be underway by 24 October 2010, approximately 2 weeks ahead of schedule.

Drilling to target depth of 14,600 feet is expected to take around 40 days. The Company has an option to retain the rig on location to drill a second well, which would most likely be a shallow producing well to obtain additional early cash-flow.

The independently assessed gross 3P reserves attributable to the prospect are 110 bcf of gas and 1.2 mmbbls of oil totalling 19.6 million barrels of oil equivalent ("mmboe"), of which around 85% is located in the deeper sands. President Petroleum's net 3P reserves based on a 55% Net Revenue Interest are 10.8 mmboe.

If the Kafoury 3 well is successful, up to three deep wells will be drilled in 2011 in addition to a shallow well. Two further deep wells may be required in 2012 dependent on success.

Stephen Gutteridge, Chairman of President Petroleum, said:

"A successful Kafoury 3 well opens up the potential to transform the Company's reserve and production base in Louisiana, with rapid monetisation through our existing infrastructure and sales contracts.

"The proposed US$50 million placing will ensure that we are fully funded to exploit this potential, and in the New Year we will look to build on any success in Louisiana with the drilling of the substantial 40 mmbbl Northumberland 2 prospect in South Australia which we expect to commence in the first quarter of 2011."  

For further information contact:

Ed Childers, the Company's Chief Operating Officer, and Dr Michael Cochran, the Company's Exploration Director, who meet the criteria of qualified persons under the AIM guidance note for mining and oil and gas companies, have reviewed and approved the technical information contained in this announcement.

 - Ends -