President Energy PLC Secondary Recovery Project (2869Y)

TIDMPPC

RNS Number : 2869Y

President Energy PLC

12 May 2021

12 May 2021

PRESIDENT ENERGY PLC

("President" or the "Company")

Secondary recovery project

President Energy (AIM: PPC), the energy company with a diverse portfolio of production and exploration assets focused primarily in South America, provides an operational update with regard to certain activities in the Rio Negro Province, Argentina

Highlights

   --       Positive results from the secondary recovery pilot project in the main Puesto Flores field 

-- Potentially significant implications for arresting and reversing declines in certain of President's mature structures in Rio Negro

Secondary recovery pilot programme

On 26 August 2020, the Company announced that it was to commence a pilot waterflooding project in the Puesto Flores field and that it would take time to evaluate such work.

President is pleased to say that the pilot project is showing concrete signs of success which if promulgated to other parts of the mature Puesto Flores field would not only in the short to medium term increase production and but would also extend out decline curves, thereby prolonging field life and ultimately have a beneficial effect on the extent of recoverable reserves.

Waterflooding is a recognised form of oil recovery wherein energy to sweep or move either residual oil or greater oil from the reservoir rock is supplied from the surface by way of water injection with the induced pressure of additional water. Widely used in Argentina, it has never been tried in the Puesto Flores field.

Waterflooding if successful, enables greater levels of oil in mature fields to be produced which otherwise would be left in the ground. By so doing not only does it produce more of the 2P (proven and probable) oil reserves but mitigates the inevitable effect of natural decline in production from existing wells by softening the decline curve.

The pilot project was initiated in one fault block within the Puesto Flores field using well PFO-26 to inject produced water that otherwise would have been disposed of in a dedicated disposal well. The objective of the project was to identify whether there was any pressure response from wells in the same structure.

President has now identified a potentially significant positive incremental response from two wells. The first from PFO-14 lying 700 metres away from PFO-26 and the other from PFO-10 which only 386 metres away.

After having considered and discounted other potential reasons for the production increases from these two wells, the Company after careful analysis considers that they are a direct result of the waterflooding. The results at this stage show an aggregate increase from these two wells of approximately 15 m(3) /d of oil (circa 95 bopd) representing a 50% increase in oil production from PFO-14 and 25% from PFO-10.

Whilst taken in isolation, an amount of just less than 100 bopd does not resonate loudly in the context of President's overall field production, this is value added production at little or no extra cost which could account in respect of these two wells alone for an additional sales revenue in excess of US$1.5 million a year at current prices with little incremental opex.

Much more significantly, the results to date suggest that a wider long term application of waterflooding may be successful in other areas within the Puesto Flores field and it is this that potentially could have a material impact on incremental production, the extension of decline curves, estimated ultimate recovery factors, in due course reserves and importantly field life.

The pilot programme will continue and consideration will shortly be given as to the possibilities and practicalities of rolling it out on an extended basis with other old non-producing wells being utilised as injectors.

Peter Levine, Chairman, commented

"The results of the pilot waterflood programme are encouraging.

"With such evidence of success in one structure with two producing wells, whist monitoring how the production curves now progress, consideration is now being given to rolling out over time a waterflooding scheme where sub-surface conditions are suitable both within the Puesto Flores field and other of our fields in Rio Negro.

"As in the pilot programme, this is not the equivalent of an overnight sensation and is one that requires continued patience and diligence to develop a serious and impactful field scheme. Nevertheless, this should not detract from the potentially significant implications from the clear results so far".

Glossary

Bopd means barrels of oil per day

Boepd means barrels of oil and gas equivalent

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                      [phone] 
  Nikita Levine, Investor Relations 
                                            [e-mail] 
 finnCap (Nominated Advisor and broker) 
  Christopher Raggett, Tim Harper          [phone] 
 
 

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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May 12, 2021 02:00 ET (06:00 GMT)