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Group Update

Fri, 1st Nov 2019 07:00

RNS Number : 8983R
President Energy PLC
01 November 2019
 

 

1 November 2019

 

PRESIDENT ENERGY PLC

("President" or the "Company")

 

 Group Update

President Energy (AIM: PPC), the upstream oil and gas company with a diverse portfolio of production and exploration assets focused primarily in Argentina announces the commencement of deliveries of its own gas through the Company's pipeline, commencement of building a new 16 kilometre section of pipeline with increased capacity, a recovery in its Louisiana production and an update on oil prices in Argentina

Highlights

Commencement of pipeline gas sales

• Building now starting of the new 16 kilometre pipeline giving increased capacity

• Louisiana production stages material recovery

• Oil prices in Argentina payable to producers to increase by 5% with effect from today

 

Pipeline gas deliveries

President is pleased to announce that the Company is now ready to flow gas to market through its own 60 kilometre pipeline from the Company's Estancia Vieja and Las Bases fields ("LB and EV").

The necessary work to achieve this significant milestone, taking some nine months, has entailed major surface work including installing both compressor and dehydration units together with supporting infrastructure and reconstruction works at the Las Bases gas plant.

From Monday, 4 November, 30,000 m3/day (1.06 MMscft/day or 175 boepd) of President's own gas will be piped by this route to market from the LB and EV fields, with the volume  currently restricted by a bottleneck in a 16 kilometre stretch of pipeline between Estancia Vieja and Las Bases due to it being a 3" flexible temporary plastic pipe.

Next week work will commence to build the new 6" steel 16 kilometre pipeline to replace this 3" temporary plastic section. This work is due to be completed in January. When finished, the bottleneck will then be removed, gas deliveries will be ramped up and the full potential of Estancia Vieja's gas unlocked as more wells will be opened up on a stage by stage basis.

In the event that the previously announced conditional agreement under which President is to take assignment of the Angostura block is completed, President's pipeline gas sales transported via Las Bases, would increase to 100,000 m3/day (approximately 3.53 MMscft/day or 600 boepd). Subject to provincial consent, it is estimated that the closing date for such conditional agreement will be later this month.

Louisiana

In the announcement of the Interim Accounts on 30 September 2019, reference was made to the slow recovery of the Triche well after both the flood forced shut-in and the necessary and lengthy workover thereafter.

That announcement stated that net production from Louisiana was a somewhat lowly 75 boepd. This net figure has now more than tripled to approximately 275 boepd as the Triche well has staged a recovery with currently a gross 220 bopd and 1.2 MMscft/day of gas being sold.

President has already commented on projected average production figures for the full years 2019 and 2020 at the time of release of the half year figures on 30 September, albeit before the entering into the Angostura conditional agreement. The projections for 2020, will be revisited in the New Year. 

Argentina oil prices

It was announced last night that oil prices payable to producers were to increase by 5% with effect from today. Industry observers comment that this is sign that the restriction placed on oil prices by the recent Government decree will continue to be lifted in stages with full return to normality on the horizon. This increase and return to norms clearly will have forward looking beneficial impact on President and other producers and is indicative of the importance of the well being of the oil industry to the country.

 

Peter Levine, Chairman, commented

"The significance of the start of our own gas flowing through the Estancia Vieja and Las Bases pipeline should not be understated as should not the great efforts made by our Argentina team to enable this to take place.

"It is an important milestone for any company to both own and operate both it's own gas fields and pipeline delivery network to market giving it a material strategic advantage.  

"This is only a start however, with the next stage being the challenge of building of the new 16 kilometre section of pipeline in the space of only three months so that the full potential of the Estancia Vieja can start to be recognised.

"I express my continued gratitude to the Province of Rio Negro, our partner EDHIPSA and our own hard working employees in this regard.

"Finally, it is also pleasing to see the production recovery in Louisiana due to the hard work of our management there and the consequential material increase in free cash flow from those assets."   

 

 

Glossary

Boepd: barrels of oil equivalent (oil and gas) per day

Bopd: barrels of oil per day

M3: cubic metres of gas

MMscft: million standard cubic feet of gas

 

 

Contact:

 

President Energy PLC

Peter Levine, Chairman

Rob Shepherd, Group FD

 

 

+44 (0) 207 016 7950

 

finnCap (Nominated Advisor)

Christopher Raggett, Scott Mathieson

+44 (0) 207 220 0500

 

Whitman Howard ( Broker)

Hugh Rich, Grant Barker

 

 

+44 (0) 207 659 1234

Tavistock (Financial PR)

Nick Elwes, Simon Hudson

+44 (0) 207 920 3150

 

 

Notes to Editors

 

President Energy is an oil and gas company listed on the AIM market of the London Stock Exchange (PPC.L) primarily focused in Argentina, with a diverse portfolio of operated onshore producing and exploration assets.

 

The Company has operated interests in the Puesto Flores, Estancia Vieja, Puesto Prado and Las Bases Concessions, Rio Negro Province as well as in the Neuquén Basin of Argentina and in the Puesto Guardian Concession, in the Noroeste Basin in NW Argentina. Alongside this, President Energy has cash generative production assets in Louisiana, USA and further significant exploration and development opportunities through its acreage in Paraguay and Argentina.

 

The Group is also actively pursuing value accretive acquisitions of high-quality production and development assets in Argentina capable of delivering positive cash flows and shareholder returns. With a strong institutional base of support, including the IFC, part of the World Bank Group, an in-country management team as well as a Board whose interests are aligned to those of its shareholders, President Energy gives UK investors rare access to the Argentinian growth story combined with world class standards of corporate governance, environmental and social responsibility.

This announcement contains inside information for the purposes of article 7 of Regulation 596/2014


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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