TIDMPPC
RNS Number : 1909X
President Energy PLC
26 August 2020
26 August 2020
PRESIDENT ENERGY PLC
("President" or the "Company")
Operational and Corporate Update
President Energy (AIM: PPC), the energy company with a diverse
portfolio of production and exploration assets focused primarily in
Argentina provides an operational and corporate update.
Highlights
-- Workover programme now commenced
-- Water flood pilot now forms part of the workover programme
-- Drilling rig contract signed and all on track for spudding by end September
-- Paraguay farm-out discussions ongoing
-- President forms new renewables division
H2 2020 Drilling and Workovers
The workover programme referred to in the Company's
announcements of 15 June and 13 July 2020 has now commenced.
The programme now comprises 6 wells of which two target
generating an additional 100,000 m(3) /day of gas. Of the next
three, one is the pulling of a defective pump, one is replacing a
beam pump with a more efficient electric submersible pump ("ESP")
and one is to repair a leaking packer.
The final one in the sequence is a pilot project for secondary
recovery (water flood) at the Puesto Flores field. Whilst
waterflooding is one of the most common pressure maintenance
techniques for enhanced recovery in mature oil fields, this is the
first time such has been tried in this field and the decision has
been made after detailed sub-surface analysis. It will take time to
evaluate the results of this project and accordingly a further
announcement in this regard will be made before the end of the
year.
With regards to the drilling of the two new wells this year,
President has now entered into the drilling contract, long lead
items have been ordered, other service providers identified and the
site locations are currently being prepared. The programme remains
on budget and on schedule to commence drilling the first well
before the end of September. This will be one of the first
conventional wells to be drilled in Argentina since the start of
the pandemic.
As previously announced, the first well in the drilling sequence
is the Las Bases 1001 development well targeting 6 bcf of
recoverable attic gas in the Las Bases structure with a high chance
of success. P50 (probable) well rate is 100,000 m(3) /day (605
boepd), target depth is 1,700 metres and estimated costs completed
are some US$1.9 million.
The second well in the sequence is the Estancia Vieja EVN-1
exploration well. This well will target a new structure with
potential for both gas and oil reservoirs to the north of the
producing Estancia Vieja field, with the P50 case oil production of
40 m(3) /day (252 bopd) and 60,000 m(3) /day of gas (350 boepd) and
a target depth of 2,000 metres. The chance of success is estimated
at over 50% and estimated costs of the well completed are US$2.5
million. In a success case, the whole of the Estancia Vieja north
structure is opened up with a potential follow-on drilling
programme of an additional 6 wells targeting up to 14 mmbbls and 26
Bcf.
Paraguay
On 15 June 2020 the Company announced that, prior to the
Covid-19 crisis, following detailed due diligence, substantive
discussions had commenced with a National Oil Company regarding a
farm-in to President's Pirity Concession (the "Concession"),
including the drilling of a well on the Delray complex. The
announcement further stated that due to the crisis, those
discussions had been suspended.
Discussions have now recommenced including as to financial and
other terms, with President remaining as operator of the
Concession. There is of course no guarantee that such discussions
will result in mutually agreeable definitive agreements being
signed but, in the event they do so proceed positively, it is
currently anticipated that definitive agreements would be concluded
before the end of this current year with commencement of drilling
during 2021. The current Concession term extends to Q1 2022. Unless
otherwise required from a regulatory aspect, no further
announcements will be made until such discussions howsoever come to
a conclusion.
In the Concession as a whole, President after detailed further
sub-surface work has identified over 500 mmboe of prospective
resources. Reference is once again made to the sub-surface
presentation on the Concession that can be found at
www.presidentenergyplc.com
Alternative Energy
Whilst President's primary focus remains on its oil and gas
business, the Company recognises the need for society to adapt and
evolve to a more balanced energy offering. Given the Company's core
skills of managing complex projects and production operations and
its gravitas in Argentina, President is currently considering
investments in that country in the field of renewable energy and
related technology businesses which have no material oil or gas
component. To this end the Company is forming a new alternative
energy subsidiary for such purpose.
President makes it clear to the market that, whilst there is a
serious and committed intent to consider such investments given the
changing times, projects will only be pursued if they deliver
long-term, sustainable, value for shareholders and thus, whilst the
Company is participating in several data rooms under terms of
confidentiality, there is no guarantee that entry into suitable
projects will be effected. Accordingly, it is urged that
appropriate patience is required in relation to this live and
ongoing initiative. Further announcements will be made in this
regard when there is something substantive and material to
relay.
Peter Levine, Chairman, commented
"In our traditional business, progress continues on a multi
layered basis to achieve growth and long term profitability.
"The new energy initiative is reflective of our times and it is
a responsible direction to take with a view to future energy.
"Let us see what develops without making any promises at this
stage, all the time remaining focused on our core hydrocarbon
businesses and delivery of the ongoing workover and drilling
projects
"As a result of the increased levels of activity in both the
current and next quarters on a number of fronts, President expects
a more intensive level of news flow during the rest of this
year"
Glossary:
Bcf means billions of cubic feet of gas
Bopd means barrels of oil per day
Boepd means barrels of oil equivalent (oil and gas) per day
Mmbbls means millions of barrels of oil
Mmboe means millions of barrels of oil equivalent
M3/d cubic metres of oil or gas as the case may be per day
production
Contact:
President Energy PLC
Peter Levine, Chairman
Rob Shepherd, Group FD
Nikita Levine, Investor Relations +44 (0) 207 016 7950
finnCap (Nominated Advisor)
Christopher Raggett, Charlie Beeson +44 (0) 207 220 0500
Shore Capital (Corporate Broker)
Jerry Keen, Antonio Bossi +44 (0) 207 408 4090
Tavistock (Financial PR)
Nick Elwes, Simon Hudson +44 (0) 207 920 3150
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, and
Angostura exploration contract, all of which are situated in the
Rio Negro Province 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 as well as the international commodity
trader and logistics company Trafigura, an in-country management
team as well as a Board whose interests are aligned to those of its
shareholders, President Energy gives UK investors access to the
Argentina energy growth story combined with world class standards
of corporate governance, environmental and social
responsibility.
This announcement contains inside information for the purposes
of article 7 of Regulation 596/2014
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