13 Nov 2012 07:00
13 November 2012
PRESIDENT ENERGY PLC
("President" or "the Company")
Operational Update
President is pleased to provide an update on its operational activity in Paraguay, as well as in Argentina and Louisiana.
Highlights
·; Line clearing for seismic in Paraguay has commenced following the recent completion of the Farm-In
·; Global Geophysics Services Inc. ("Global") has been selected for integrated geosciences services in Paraguay, with strategic alignment on finding commercial oil
·; DeGoyler and MacNaughton to produce technical reports on Pirity basin
·; In Argentina, pressure surveys show frac candidate wells reverted to original or near original pressure
·; In Louisiana, production is healthy with new growth opportunities identified
Paraguay
·; Line clearing operations have already commenced, with local Paraguayan companies performing 100% of the work.
·; Following a competitive tender, a Memorandum of Understanding has been signed with Global for the provision of proprietary integrated geoscience services, comprising of 786 km2 3D and 100 line kilometres 2D seismic acquisition, processing and interpretation. Global is an industry leader in land seismic services globally and listed on the NYSE.
·; President and Global have created strategic alignment designed to maximise the chance of making commercial discoveries in the Pirity Basin. The contract has been structured whereby Global will deliver their full range of services (considerably beyond the original scope as envisaged by President) at cost in return for President and its partners paying a discovery bonus paid from production over time. The bonus scheme extends across the first three exploration wells drilled by President in the Concessions.
·; Global will provide a full suite of survey design, data acquisition, data processing, interpretation and reservoir risk reduction tools, as well as passive microseismic monitoring, processing and analysis and interpretation using their proprietary Tomographic Fracture Imaging to image the detailed structure within the prospective areas.
·; This agreement brings considerable endorsement of the project, a one stop service, an accelerated timetable for full interpretation and identification of drilling targets, and alignment on successful wells being drilled.
·; The seismic acquisition is due to commence in March 2013 following the rainy season and is anticipated to take six months for acquisition, processing and interpretation.
·; DeGoyler and MacNaughton have been commissioned to provide a CPR on the Pirity basin potential due to be published within 2 months which will be followed by a further CPR to address prospect potential and prospective resources once the 3D seismic interpretation is complete and high graded well locations selected.
·; President has secured an Exploration Manager and Operations Manager for Paraguay. Both have extensive industry experience.
Argentina
·; Carried work programme associated with Farm in has completed; now on a 50/50 basis with the operating partner.
·; Pressure survey work for frac well candidates in Pozo Escondido is now completed, showing all 6 shut-in candidate wells in the Carbonates have reverted to either original pressure or near original pressure. Furthermore, two wells where the underlying A6 sand could be surveyed also showed the pressure has reverted to near original pressure. These results highlight the undeveloped nature of the Pozo Escondido field and provide encouragement for the frac campaign and further development and reserve potential.
·; Initially, three fracs will be performed in quick succession, each taking approximately 1 week, projected to be completed around end Q1. Further fracs are contingent on the success of the initial programme. While critical preparation continues, the actual fraccing has taken longer than expected, due largely to the Joint Venture having to assess fully the impact of the new Government planning guidelines before making further investments. Consequently the well preparations will continue into 2013 and the Operator has recommended not to mobilise the fraccing trucks to the field until the end of the rainy season towards the end of Q1 2013. A successful frac programme will contribute to significant production growth in Argentina.
·; October production was 418 bopd gross (net 209); prices were steady at US$ 70 per barrel.
·; Seismic reprocessing work and interpretation updates on Dos Puntitas and Pozo Escondido due to complete in 2012.
Louisiana
·; October production of 209 boepd (90% oil); currently receiving over US$100 per barrel
·; Well 54 at EWL (President 25% WI) due to spud late November, targeting PUD reserves of approximately 300,000 boe gross (Company estimates)
·; At ELV, a new lease has been acquired by President (100% WI) which contains an oil prospect, and which will be the subject of evaluation (seismic reprocessing and geophysical analysis) in the coming two months
Commenting on today's announcement, Peter Levine, Chairman of President Energy said:
"We are extremely pleased with our rapid progress in Paraguay, and the strategic alignment we have established with Global. Global will bring state of the art technology to bear on our acreage, and we greatly value their positive view on the prospectivity, as evidenced by the provision of additional services on a risk sharing basis. In Argentina, operations are slower than we would like, due to prudency, not technical reasons. The results of the pressure tests give us increased confidence on the carbonates in the Concession and we look forward to updating shareholders in the near future. Louisiana continues to be a valuable asset to the Company, and we continue to take a measured approach to this business."
For further information contact:
President Energy PLC
John Hamilton, Director +44 (0) 207 811 0140
Ben Wilkinson, Finance Director +44 (0) 207 811 0140
RBC Capital Markets
Jeremy Low, Matthew Coakes, Daniel Conti +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. Richard Hubbard, PhD Geology Stanford University, with 35 years of experience in the oil and gas sector, as President Chief Operating Officer, 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.