TIDMPPC
RNS Number : 7987Z
President Energy PLC
26 May 2021
26 May 2021
PRESIDENT ENERGY PLC
("President" or the "Company")
Operations and corporate update
President Energy (AIM: PPC), the energy company with a diverse
portfolio of production and exploration assets focused primarily in
South America, provides an update with regard to operational
activities and corporate matters.
Highlights
-- New gas well EV-1002 successfully completed, tested at over
100,000 m(3) /d (3.53 MMsft/d or 580 bopd) with excellent pressure
and now on stream with production from both new wells EV-1001 and
EV-1002 building
-- Aggregate current production from the new EV wells together
with the new well LB-1002 is expected to be approximately in line
with pre-drill projections at approximately 170,000 m(3) /d (6
MMscft/d or 1,000 bopd) being the equivalent of 6,000 MMBtu
-- Aggregate actual cost for the three new wells fully completed
and on stream was in line with budget at approximately US$4M
-- Possibility of new wells in the same originally pressured
fault block as EV-1002 now being considered for later this year
-- Gas prices in Argentina rising further with spot prices currently at US$ 6.50 per MMBtu
Peter Levine, Chairman, commented on the core business in
Argentina
"On 20th January, President announced plans for the commencement
of its H1 2021 drilling programme by end March comprising new gas
wells in the Las Bases and Estancia Vieja Concessions in Rio Negro
Province. Despite a variety of hurdles, all three new wells were
drilled on time and on budget with initial aggregate production
levels expected to hit pre-drill expectations as they build up.
"President also previously announced its intention to bring the
wells on stream by the end of May to capitalise on winter gas
prices that were, at the time of planning, projected to rise in
excess of US$3 MMBtu. Indeed, EV-1001 and EV-1002, the second and
third wells drilled in the sequence, have now been placed on
production meaning President has achieved its objective.
Significantly, current winter spot gas sale prices in Argentina are
US$6.5 MMBtu, much above expectations and a marked 182% increase
from January 2021 prices.
"It is the responsibility of management to formulate a business
plan, execute and deliver on it. As evidenced by the series of
announcements this year, that part of the plan relating to drilling
in Rio Negro has been executed at the same time as other multi
workstreams continuing in parallel.
"Next up is the delivering of the oil treatment plant mid this
year with the Salta drilling and seismic programme following later
in the year".
EV-1001 and EV-1002
The new well EV-1002 has been successfully completed and tested
after perforation of an 8.5 metre interval in the Vaca Muerta
reservoir. During testing, the well flowed at over 100,000 m(3) /d
(3.53 MMsft/d or 580 bopd) with an 8mm choke and an excellent
well-head pressure of 1,750 psi. President is now considering the
overall prospectivity in the same fault block as supporting a
possible further drilling campaign for later this year or the first
part of 2022.
The very high wellhead pressure compared to the other EV wells
requires work on balancing the production from that field so as to
optimise all wells of varying pressure being online at the same
time. This work is currently in progress, the issue was anticipated
and in fact is a good problem to have.
Unlike EV-1002, which has original pressure in a virtually
undrained fault block, EV-1001 is located in a producing block and
therefore a more pressure depleted area. Due to this and reservoir
quality, the well was both perforated and fracced, so it is taking
longer to clean up. To assist in the clean-up of the near well
bore, a treatment with CO(2) is anticipated to take place in the
next 21 days.
Combined with LB-1002, the first well in the three well drilling
programme, the aggregate current production from these three newly
drilled wells is expected to achieve in due course 170,000m(3) /d
(6 MMsft/d or 1,000 boepd) which is in any event in line with
expectations and translates into the equivalent of around 6,000
MMBtu a day.
The current spot gas prices in Argentina continue to increase
and are currently US$6.5 per MMBtu.
President will report average actual production for H1 as well
as updated guidance for the full year in its Interim Report due
later this year.
Paraguay
Whilst the execution of agreements regarding the Paraguay
farm-out is taking longer than originally anticipated due to the
structured signing formalities of a State company combined with
many of their executives having again to work from home, President
remains both patient and highly confident that agreements will be
entered into in early course.
The key message is that this delay in signing will not affect
the timing of the drilling of the exploration well due in H1
2022.
Atome
As advised on 22 February, the Company formed Atome Limited as a
UK intermediate holding company intended to be focused on
developing a hydrogen and ammonia production, marketing and sales
business as distinct from an OEM (original equipment manufacturer).
Atome has not to date traded and prior to the events below, had a
paid up share capital of GBP2.
The Company has now allotted a 15% interest in Atome to Alpha
Oil Invest GmbH of Zug, Switzerland ("Alpha") for cash at par value
reflecting the work both done and continuing to be performed by
Alpha referred to below. Alpha, in operation since 2006, is an
established independently managed fund whose ultimate owner is
Peter Levine, the chair of President. Since its inception Alpha has
made a wide range of investments in a variety of sectors. Alpha has
developed an interest and expertise in renewable energy. In this
respect Alpha, at its own cost, has previously identified,
originated and developed certain business opportunities which it is
now introducing to Atome rather than pursuing them itself.
The allocation of shares in Atome is not a related party
transaction for the purpose of Rule 13 of the AIM Rules for
Companies due to that transaction being de minimis in its size.
Nevertheless, in the spirit of Rule 13 of the AIM Rules for
Companies, the independent directors of the Company (being all
those save for Peter Levine and Rob Shepherd as an executive
director), have carefully reviewed the terms of the issuance in the
context of Rule 13 and consider them to be fair and reasonable
insofar as the Company's shareholders are concerned.
It is expected that a further announcement relating to Atome
will be made in June with progress being made on two diverse
projects.
Glossary
Bopd means barrels of oil per day
Boepd means barrels of oil and gas equivalent
MMBtu means million standard cubic feet of gas
Mmsft/d means Million standard cubic feet of gas per day
M(3) /d means million of cubic metres of gas per day
Contact:
President Energy PLC +44 (0) 207 016 7950
Nikita Levine, Investor Relations info@presidentpc.com
finnCap (Nominated Advisor and broker)
Christopher Raggett, Tim Harper +44 (0) 207 220 0500
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 capable of
delivering positive cash flows and shareholder returns. With a
strong strategic and institutional base of support, including the
international commodity trader and logistics company Trafigura, an
in-country management team as well as the Chairman whose interests
as the largest shareholder are aligned to those of its
shareholders, President Energy gives UK investors access to an
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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