15 Jun 2015 07:00
15 June 2015
PRESIDENT ENERGY PLC
("President" or "the Company")
OPERATIONAL UPDATE
President is pleased to provide an Operational Update on its Paraguay and Argentina Assets.
Argentina - Puesto Guardian Concession
Work-over
President has successfully completed the four well work-over programme on the Puesto Guardian Concession on time and on budget. These were the first operations carried out since President acquired Operatorship in H2 2014.
The four previously shut-in wells are in the clean-up phase and currently flowing ahead of expectations at an aggregate of 190 bopd, a 92% increase in current field production, providing a significant return on the $1.6m investment in the four work-overs.
Realisation prices for oil remain strong at approximately $70 per barrel, with the additional oil from the work-overs generating a further $3 per barrel arising from Government incentives, giving net backs for the Company for this incremental production of $50 per barrel after paying royalties, revenue tax, opex expenses including processing and transport costs thereby enabling President to generate useful free cash flow from Argentina.
This initial limited work-over programme was developed as a pilot scheme to demonstrate potential in recoverability of oil from the substantially un-drained reservoirs in the five fields comprised in the Puesto Guardian Concession where President has independently assessed 2P Oil Reserves of 14.1 MMBbls.
Encouraged by the successful results of the work-overs, planning continues for a new multi-well and work-over programme. An update on progress is expected to be made later in the year.
Work is currently being carried out to upgrade the facilities in the Concession which comprise two separate main Central Processing Units, one on each of the Dos Puntitas and Puesto Guardian fields in aggregate capable of processing 6500 bfpd.
Farm-out deep gas prospect
The farm-out process for the significant deep gas prospect at the MDT field commenced as planned last month. Preliminary discussions have taken place with several potentially interested parties and are continuing. A further update will be provided in due course.
Paraguay - Hernandarias Concession
Infield seismic data acquisition is proceeding in line with planning and, subject to weather, should be completed by the end of July with preliminary results available in Q3 2015.
Once the seismic results are evaluated and President has consequently consulted with its respective partners in the three Concessions in which President has interests, a further announcement will be made as to the Company's future plans in Paraguay. The level of interest from the industry in the work already carried out and currently being performed remains encouraging.
Peter Levine, Chairman, commented
"The work-over results at Puesto Guardian, have in their own relatively modest way demonstrated both the potential of the fields and, importantly, the significant untapped oil reserves remaining within the Concession. The programme has also underlined President's ability, as Operator in Argentina, to deliver such programmes on time and on budget.
Work in Paraguay continues as planned and we look forward to receiving the results of the seismic later in the year."
Miles Biggins, Bsc Joint Honours University College London, with 25 years of experience in the oil and gas sector, is a Petroleum Engineer and member of the Society of Petroleum Engineers 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
Miles Biggins, COO +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
Henry Fitzgerald-O'Connor +44 (0) 207 523 8000
Bell Pottinger
Gavin Davis, Henry Lerwill +44 (0) 203 772 2500