President Energy PLC Operational Update (8278L)

TIDMPPC

RNS Number : 8278L

President Energy PLC

06 October 2016

6 October 2016

PRESIDENT ENERGY PLC

("President", "the Company" or "President Energy")

WELL DP1002 S/T DOS PUNTITAS FIELD, PUESTO GUARDIAN CONCESSION,

SALTA PROVINCE, ARGENTINA

OPERATIONAL UPDATE

President Energy (AIM: PPC), the oil and gas exploration company provides the following update on its operations.

President regrets to announce that it has been forced to temporarily suspend well DP1002 S/T so that the Drilling Rig can be mobilised to the Company's neighbour for drilling their well. This was due to the significant difficulties encountered in running casing in the drilled well, due to a twist-off of a 1000m section which was lost downhole and not practical to recover within the timeframe. The mobilisation of an appropriate workover rig to fish the casing is now being considered.

As previously reported, there have been significant service quality issues encountered in this well and the challenges presented have been enormous. Issues with the Rig were followed by a fractured drill pipe and then two failed cement plugs through compressive strength issues.

Whilst President continued to drill through all these difficulties and intercepted the target formation, the attempt at casing this well has proved an issue too far at this present time.

Investigations will now commence with all contractors to identify the failings in operations as it is extremely unusual to encounter such a combination of issues in the course of a single well. On the well we had leading names in the industry, Helmerich & Payne drilling contractors, Schlumberger mud contractors, Weatherford supplying Company Men, directional drilling and casing running and Baker Hughes cementing. All of the issues were unforeseen even after taking into account the detailed risk analysis and peer review undertaken before drilling commenced.

Nevertheless, as the decision has been taken to temporarily suspend further attempts at completing this well at this time, President is reviewing further action on this well and on the drilling programme. As well as the fishing operations being considered, the well remains available for a further side track to re-intersect the producing formation. In the interim the Company is therefore releasing the Drilling Rig on to Petro AP, currently operating in the neighbouring block in order, to drill its Pizarro well.

The temporary suspension of the well in no way impacts on the reserves or prospectivity of the target formation in this Dos Puntitas field which remain robust and in place. Indeed, that Dos Puntitas Yacoraite formation continues to be a major contributor to President's existing production from the Concession, which production continues to be stable.

The coiled tubing unit should commence work on the first of the shut-in wells of the projected programme at the weekend.

Peter Levine, Chairman, commented:

"Despite the inevitable disappointment and frustration we feel with the drilling process, it is important to carefully assess the situation and determine the best route forward with this well and with our drilling programme. The frustration is particularly acute as we believe this development well, successfully completed, will be an excellent producer with the oil still there and available to be extracted. As a first and natural step, this well will be the subject of a serious and detailed internal review as well as discussions with our service providers.

"This is however not a time for kneejerk reaction and after careful assessment of the situation we will report back to shareholders.

"In the meantime production in Argentina continues at the levels announced in our interim report with Louisiana production now in excess of 200 boepd".

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               [phone] 
  Miles Biggins, COO                   [phone] 
 Peel Hunt LLP (Nominated 
  Advisor & Joint Broker) 
  Richard Crichton, Ross Allister      [phone] 
 BMO Capital Markets (Joint 
  Broker) 
  Jeremy Low, Neil Haycock            [phone] 
  and Tom Rider                        1010 
 Vigo Communications 
  Chris McMahon 
  Patrick D'Ancona                   [phone] 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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October 06, 2016 02:00 ET (06:00 GMT)