TIDMPPC
RNS Number : 9986M
President Energy PLC
20 October 2016
20 October 2016
PRESIDENT ENERGY PLC
("President", "the Company" or "President Energy")
OPERATIONAL UPDATE
President Energy (AIM: PPC), the oil and gas exploration company
provides the following update on its operations.
Argentina
The Coiled Tubing programme is progressing and operations have
just commenced on the second of the expected now five well
campaign. The intervention on the first well, Poso Escondido 3, a
previously producing well shut-in since 1993, has provided valuable
information on the Yacoraite reservoir at this location and has
flowed a limited amount of oil to surface. Although the stimulation
and extended testing could not be carried out due to a tubing leak,
the operation demonstrated that the Yacoraite remains without
significant depletion and is capable of flowing oil without
artificial lift. The well will now be a candidate for a follow-up
workover campaign that is being planned at the Concession. There
are no reserves attributed to this well in the reserves statement
referred to below.
The analysis and investigation as to the circumstances
surrounding the drilling of DP1002 S/T continues and will be
pursued vigorously by President. Meanwhile, a resumption of
drilling remains suspended.
Management re-iterates that the mechanical failures on DP-1002ST
were not related to geological factors of the target producing
reservoir and that the horizontal landing of the well demonstrated
that the well target was robust. The mechanical issues have no
bearing on future drilling potential of the Puesto Guardian
Concession with independently assessed reserve figures of 1P Proven
and 2P Proven plus Probable Oil Reserves of 11 mmbbls and 18.1
mmbbls respectively.
Louisiana
Current production from Louisiana is approximately 220 boepd
with oil prices becoming more robust and, importantly, gas prices
showing an increase of over 73% over the last 6 months. Gas
represents 23% of President's current production in Louisiana.
President is estimating approximately US$150,000 per month
profit after tax from its Louisiana operation for Q4 2016. In
effect this amount also represents the free cash generation back to
the Group from Louisiana operations.
Paraguay
Pirity Concession
In the Company's RNS of 2 September 2016 President announced the
signing of a Co-Operation Agreement with Petro AP and noted the
strengthening relations between the two companies.
Petro AP has been drilling a vertical exploration well at Selva
Maria, North West Argentina, 7km from the boundary of the Pirity
Concession of President Energy across the border in Paraguay. The
site of this well is some 200 km to the North East of the Company's
Puesto Guardian Concession in Salta. The Selva Maria well was
drilled to intersect the deep Cretaceous reservoirs in the central
part of the Olmeda basin, of which the Pirity sub-basin is the
Paraguayan extension and includes the Cretaceous prospects in the
Company's Pirity Concession. RPS*, the International Consultancy,
has previously assessed gross mean unrisked Prospective Resources
of 342.5 mmboe over four prospects in President's Cretaceous
prospect portfolio within that Concession. President has the
benefit of over 800km(2) of 3D seismic data as well as 2D data
which was acquired in 2014 over those four Cretaceous
prospects.
The Argentine Secretary of Energy website shows that the Selva
Maria well is producing good quality light crude oil. Whilst it is
understood that the commerciality of the well is subject to ongoing
testing and analysis, oil produced from the well is being sold
according to Provincial records.
Petro AP is further conducting a 2D and 3D seismic data
acquisition campaign over Selva Maria and surrounding acreage that
extends right up to the Pirity Concession boundary on the Paraguay
border.
President's management believes that Petro AP is drilling in a
deep and hot section of the Olmeda Basin and news of saleable oil
production and seismic activity, 7km from the border with President
Energy's Pirity Concession, is of potentially significant interest
for the Company. The Selva Maria well is the nearest Cretaceous oil
producing analogue well to President's acreage.
As stated in the recently published Interim Accounts,
geophysical studies on the Company's interests in Paraguay continue
and this latest information will be factored in to President's
updated acreage assessments.
The Selva Maria Cretaceous target formation is to be
distinguished from the nearby Palma Lago oil field where production
is principally from the volcanic reservoir.
Pilcomayo Contract
As announced previously, in relation to this small area of land
between the Pirity and Hernandarias Concessions, the Group holds a
Prospection Permit and has received environmental license on the
Pilcomayo Block, adjacent to President's Pirity Concession. The
Company has decided to move forward and has made a contract
application for prospection, exploration and exploitation of that
area. With the right of priority due to the previous permit, the
application is being considered by the Ministry and a response
should be received before the end of 2016.
Peter Levine, Chairman, commented:
"Work continues in Argentina, the oil is in the ground and there
is a determination to produce the same from our robust
reserves.
"Louisiana is picking up and producing very helpful post tax
profits with free cash flow.
"The information coming out of the Selva Maria well, only 7km
from the border of our Pirity Concession, is encouraging for the
Cretaceous prospectivity of President Energy's acreage in
Paraguay.
"Notwithstanding the fact that the commerciality of long term
production has not yet been declared by the Operator, it is beyond
question that the nearest Cretaceous well to President Energy's
acreage is producing oil.
"This data will be helpful when it comes to the commencement of
our 2017 Paraguay farm-out programme."
Glossary
mmboe Million barrels of oil equivalent
mmbbls Million barrels of oil
Prospective Resources Estimated volumes associated with
undiscovered accumulations to be potentially recoverable on basis
of indirect evidence and yet to be drilled prospects
*the RPS report dated 12 June 2014 is published on the Company's
website.
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.
This announcement is inside information for the purposes of
article 7 of Regulation 596/2014
Contact:
President Energy PLC
Peter Levine, Chairman +44 (0) 207 016 7950
Miles Biggins, COO +44 (0) 207 016 7950
Peel Hunt LLP (Nominated
Advisor & Joint Broker)
Richard Crichton, Ross Allister +44 (0) 207 418 8900
BMO Capital Markets (Joint
Broker)
Jeremy Low, Neil Haycock
and Tom Rider +44 (0) 207 236 1010
Vigo Communications
Chris McMahon, Patrick D'Ancona +44 (0)20 7830 9700
This information is provided by RNS
The company news service from the London Stock Exchange
END
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