PPC.L Regulatory News (PPC)

25 February 2019

PRESIDENT ENERGY PLC

("President", "the Company" or "the Group")

Offer for Subscription for up to £6.5 million

and

Proposed Debt Conversion

President Energy (AIM: PPC), the upstream oil and gas company with a diverse portfolio of production and exploration assets focused primarily in South America, is pleased to announce that it will today launch an Offer for Subscription (the "Offer") for up to £6.5 million by the issue of up to 81,250,000 new Ordinary Shares ("Offer Shares") at a price per Offer Share of 8 pence (the "Offer Price").

Following on from the latest acquisitions in December 2018 of two concessions in the Rio Negro Province, Argentina, together with the purchase of a strategic pan-regional gas pipeline network, the Company has identified increasing opportunities to accelerate its expansion programme in Rio Negro through the fast track development of its gas assets which currently represent 19% of Group reserves but only 3% of production.

After consultation with both existing and new potential investors, President has determined that the optimal way of funding the accelerated programme is through the Offer that is limited under relevant regulations to a maximum amount equivalent to €8 million. In addition, and importantly, the Offer allows the Company to expand its shareholder base and increase liquidity whilst at the same time preserving the priority rights of existing holders. This mechanism allows both shareholders and non-shareholders to participate at the same Offer Price. President has received indications from Shareholders representing a substantial part of the Company's issued share capital that they intend to participate in the Offer or, in the case of Peter Levine, the debt conversion referred to below.

Further details of the Offer, including the full terms and timing, will be set out in an Offer Document that will be sent to Shareholders and will be available to download later today, alongside an updated corporate presentation, on the Company's website at www.presidentenergyplc.com. The application forms for participation in the Offer will also be available on the Company's website and can be used by both shareholders and non-shareholders. All application forms must be submitted in accordance with the instructions set out in the Offer Document.

The Offer Shares will be issued under the authorities granted to the Company at its Annual General Meeting held on 29 June 2018. The Offer will remain open until 1.00 p.m. on 8 March 2019 and it is anticipated that the Offer Shares will be admitted to trading on AIM on or about 13 March 2019.

Background and Use of Proceeds

President's progress in 2018 was very significant. Some of the key performance indicators (unaudited, from internal management accounts) for the Group were:

• Turnover increased by 160% to US$47.2 million

• Operational profit of US$14.3 million

• Year-end net production increased by 194% to 3,300 boepd with Rio Negro Province production increasing by nearly 100% since the first acquisition there in late 2017

• Operational free cash generation of US$21.5 million

• Updated independently audited 1P Proven hydrocarbon reserves as at 31 December 2018 of over 15 MMboe and 2P Proven and Probable reserves of over 25 MMboe.

This progress is set to continue as month on month production growth between this year and last year proceeds apace. Consequently, President is targeting 50% production growth in each of the next three years with production estimated to rise to approximately 4,500 boepd in 2019, excluding the accelerated gas production.

This organic growth in oil production is being powered by President's current significant cash flow; however, following the recent acquisition of the strategic pan-regional gas pipeline and gas producing assets, the Directors consider that the Offer will provide the supplementary equity funds to create a substantial gas business alongside President's fast growth oil assets. Particular emphasis is being placed on gas production by bringing forward a number of important developments. Management believes that the Company's gas assets have the potential to generate 30% of the enlarged Group production by end 2020.

In summary, the proceeds will:

· Accelerate and expand the already planned workover and drilling programmes to allow more gas wells to be added to the programme

· Capitalise on the potential of the new Concessions purchased in December 2018 (including the Company's 60 km owned and operated strategic pan-regional pipeline) to expedite the development of significant gas production, thereby broadening President's revenue base

· Accelerate the recommissioning of the currently non-operational ex-Chevron Argentina gas plant at the Las Bases Concession, Rio Negro Province, with an original designed capacity of 35 MMcft/d of gas (6k boepd)

· Expand the capacity of the newly acquired pipeline by replacing a section currently having restricted flow capability with larger volume steel pipes thereby permitting significantly more gas to be transported from President's high potential Estancia Vieja gas field through Las Bases to President's own tie-in to the main trunk line.

Debt Conversion

At the same time as the Offer, IYA Global Limited ("IYA"), an entity controlled and beneficially owned by Peter Levine, the Group's Chairman, has confirmed that it will convert part of its existing debt that it has with the Company into new Ordinary Shares ("Loan Conversion Shares") at the Offer Price such that the holding of entities controlled by Peter Levine will equal approximately 29.95 per cent of the enlarged issued share capital of the Company following completion of the Offer and the Loan Conversion. The Loan Conversion Shares will be admitted to trading on AIM at the same time as the Offer Shares or such later time as the appropriate Resolution of the Company is passed by the Members to facilitate such conversion in full. Further information regarding the quantum of the Debt Conversion will be notified once the results of the Offer are available.

The conversion of part of the existing IYA debt will reduce the interest expense burden on the Company and will strengthen the Company's balance sheet.

Peter Levine, Chairman, commented:

"Today's Offer allows us to introduce new investors who have expressed concrete interest to come on board while ensuring that our existing investor base and other non-institutional investors are able to participate.

"The Group is currently well placed with current oil production estimated to increase by 50% annually for the next three years funded through existing resources. Our recently acquired gas assets which are currently largely undeveloped have the potential to generate around 30% of enlarged Group production within the next two years.

"The proceeds of this Offer will place the Company in an even better position not just to develop but to accelerate the multiple opportunities available to us to progress our newly expanded portfolio in the Neuquén Basin.

"The greater and speedier focus of increasing gas production will enable President to have a more balanced and diversified portfolio of energy assets which during 2019 will also include power generation as well as sales of gas and oil to the market.

"Clearly a significant motivating force for the Directors as a public company is to expand our shareholder base and improve liquidity, which is important for all investors and we are pleased at the level of interest we have seen in the President story and our road map of growth for the future.

"I look forward to welcoming new shareholders and thank our existing holders who have indicated their strong support."

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation (EU) 596/2014 ("MAR").

Conference call

The Company will be hosting a conference call, focussing on the proposed Offer for Investors at 9.30 am (UK Time) on Monday 25 February. The dial in details are shown below and participants should ask for the "President Energy Investor Call".

United Kingdom Toll-Free:

Dial in number: 0800 358 9473

Conference code: 48694297#

United Kingdom Toll:

Dial in number: +44 333 300 0804

Conference code: 48694297#

Contact:

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.