8 Jan 2014 07:00
8 January 2014
PRESIDENT ENERGY PLC
("President" or "the Company")
OPERATIONAL UPDATE
PARAGUAY RIG PROCURED - DRILLING PREPARATIONS ON TRACK
President Energy is pleased to provide an operational update on the Company's assets.
Highlights
Paraguay
· Rig procured for 2014 exploration programme
· Preparations for drilling campaign on track
· Weather permitting, first well scheduled to spud during May 2014
· Seismic results continue to support previous expectations, updated audit report now scheduled by end this month
Argentina
· Argentina frac programme completed with proven success. Realised oil prices increased by 13% over last year to US$ 76/bbl
Louisiana
· Louisiana production remains strong, with oil prices stable at US$ 109/bbl
PARAGUAY
Rig Procured
A letter of intent has now been entered into for a rig to drill the 2014 exploration programme. The contractor is Queiroz Galvão Óleo e Gás, one of the largest drilling contractors and production services providers in Brazil. The Top Drive Rig is capable of drilling down to depths of 5000 metres which is adequate to explore the deeper Paleozoic play identified in President's seismic survey. Mobilisation from Brazil is due to commence during February 2014 and is estimated to take two months, with the first well scheduled to spud, weather permitting, during May 2014.
Drilling Preparations
Preparations for drilling continue and are on track. Schlumberger experts are now in country supporting President's growing team. Civil works at two well locations are advanced with drilling pads being prepared.
Seismic Survey
The results of the extensive seismic programme are still being analysed. Due to the increased amount of seismic data acquired, the final results are now expected during the course of January. The information to date supports the management's previously announced views of the two major structural play fairways identified and the gross risked prospective resource potential of in excess of 500 mmboe as a realistic possibility. An updated independent audit by RPS is also expected to be announced by the end of January.
ARGENTINA
Summary of Well Stimulations Results at Puesto Guardian (PPC 50% Working Interest):
As a result of the frac campaign (excluding PE-8) gross field production has stabilised at 415bopd, an increase of 40%. With the well performance data now observed, management is confident that the frac campaign has proved successful and sufficient production data are now available to commence a reserves update. Whilst technical problems have hindered PE-8, this does not detract from the successful proof of concept of commercial, hydraulic stimulation in Puesto Guardian.
PE-7
After four months of production, the well continues to perform strongly and is free flowing without further decline into the facility on a 45/64 inch choke with an average month four rate of 185 gross barrels of fluid per day, with 73% oil.
DP-1001
After seven months of production, the well continues to free flow without further decline into the facility on a 9/16 inch choke with an average month seven rate of 110 gross barrels of fluid per day, with 66% oil.
PE-8
After hydraulic stimulation of the carbonate interval, an inflow test was commenced with a W1 of approximately 340 gross barrels of fluid per day and after three days of clean-up reached 15% oil. A workover was carried out to open the A6 interval and install a beam pump. Production re-commenced at 200 gross barrels of fluid per day (10% oil) on 11th November, however the pump performance continued to drop off over three weeks before failing. This is most likely due to seal damage from some low level of sand production. The well is currently shut-in awaiting a pulling operation to change the pump seals.
Current realised oil prices have increased to US$76/bbl representing an increase of some 13% from the levels of US$65/bbl achieved a year ago.
LOUISIANA
Production remains strong. While December volumes will be lower due to routine field maintenance at both EWL and ELV, as well as cold weather, average monthly production has been approximately 250 boepd for the past 3 months. Oil prices remain firm at US$109 per barrel. In H1 2014, President and its partners intend to drill two new exploration wells.
Peter Levine, Chairman, President Energy commented:
"The focus for 2014 is most certainly Paraguay and we are on track operationally. The retention of a leading South American drilling company complements the recruitment of Schlumberger as Integrated Project Manager and completes what we consider to be a world class team for our 2014 drilling campaign."
Miles Biggins, Bsc Joint Honours University College London, with 22 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
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 +44 (0) 207 861 3232
Gavin Davis, Henry Lerwill