10 Dec 2014 07:00
10 December 2014
PRESIDENT ENERGY PLC
("President" or "the Company")
PARAGUAY UPDATE
Hydrocarbons Present in the Santa Rosa Formation
Proceeding to Testing
President is pleased to announce the Lapacho x-1 well has reached TD at 4,543m in the Santa Rosa Formation, the primary pre-drill target, with 418m of the 600m target interval drilled. Very encouraging hydrocarbon shows have been encountered throughout the gross formation thickness extending right to TD, with high background gas of up to 20% and trip gas of up to 48% (C1-C5 gas present).
The full logging program was restricted due to difficult downhole conditions however from the logs obtained, Lapacho x-1 penetrated 54m of clean sandstones with individual sand bed thicknesses up to 10m, most of which appear to be hydrocarbon bearing. Significant additional sandstone, some 30 m+, is expected in the undrilled target interval section below current TD, suggesting a total thickness of more than 80 m of Santa Rosa reservoir sandstone at this location.
This outcome is in line with pre-drill estimates under which the well was targeting a discrete fault block trap containing gross mean prospective resources of 1 Tcf of gas (166 mmboe) and 30mmbbls of condensate within a greater Lapacho area considered to potentially contain some 5 Tcf plus associated condensate. Consistent with valuation parameters published for the RPS audit report from January 2014, management value Lapacho resources at approximately US$12 per boe for natural gas and US$ 25 per barrel for liquids.
The rig is now progressing to open hole well testing operations and a multi-rate test is planned to commence in the next few days to determine fluid type, flow rates, pressures and permeability. Upon completion of the Santa Rosa test, the separate, shallow discovery in the upper Icla formation will be tested. An update with the initial results of the first test is planned in approximately 10 days.
President's 2014 drilling campaign has drilled two wells which have demonstrated the presence of a new Paleozoic hydrocarbon province in the Pirity Basin of the Paraguayan Chaco. President operates the entire prospective area comprising 34,000 km2 spread across three Concessions (Pirity, Demattei and Hernandarias). Some 32 large Paleozoic structures and leads have been identified to date, and management estimates the Paraguayan Chaco hydrocarbon province could contain between one and four billion barrels of gross unrisked recoverable resources on an oil equivalent basis.
Peter Levine, Chairman, commented:
"We are very encouraged by the hydrocarbon shows in the Santa Rosa Formation and look forward to flow testing the well, and announcing results in the near future.
Whilst it is too early to determine the composition of hydrocarbons in the Santa Rosa, both liquid and gas are extremely valuable commodities not only in Paraguay which imports all its own energy requirements but also in the neighbouring energy hungry countries of Brazil, Chile and Argentina."
Dr. Richard Hubbard, PhD Geology Stanford University, with 40 years of experience in the oil and gas sector, as President's Chief Operating Officer, who 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.
Contact:
President Energy PLC
Peter Levine, Chairman +44 (0) 207 016 7950
John Hamilton, CEO +44 (0) 207 016 7950
Ben Wilkinson, Finance Director +44 (0) 207 016 7950
RBC Capital Markets
Jeremy Low, Matthew Coakes, Daniel Conti +44 (0) 207 653 4000
Canaccord Genuity Limited
Tim Redfern, Henry Fitzgerald-O'Connor +44 (0) 207 523 8000
Bell Pottinger
Gavin Davis, Henry Lerwill +44 (0) 203 772 2500