President Energy PLC Update from Rio Negro Province, Argentina (7226J)

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RNS Number : 7226J

President Energy PLC

07 December 2018

7 December 2018

PRESIDENT ENERGY PLC

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

Update from Rio Negro Province, Argentina

Successful testing of 2nd new well

President Energy (AIM: PPC), the upstream oil and gas company with a diverse portfolio of production and exploration assets focused primarily in Argentina, provides an update relating to its Concessions in Rio Negro Province, Argentina (President 90% and operator - EDHIPSA 10%) including the Puesto Flores/Estancia Vieja Concession ("PF/EV").

Highlights

-- PFE 1001, the second new well in the drilling programme, tested at 400 bopd from the primary target double initial expectations

-- The secondary target, having also successfully flowed oil, has been isolated and kept in reserve to produce at a future date

   --     The well will be on stream from the primary target interval by 10 December 
   --     Drilling of the third and final well in the 2018 series, PF0 1005, proceeding as planned 

Well PFE 1001

This well has now been successfully completed and tested. Both the secondary, Pre Cuyo, and primary, Punta Rosada, targets successfully produced oil and as with the predecessor well, PFO 1001, the secondary target was isolated to be kept in reserve to produce at a later date.

The Punta Rosada, having tested at the rate of approximately 400 bopd with nearly zero water and good downhole pressure, will be on line by 10 December with a similar level of initial production expected. This rate of flow is substantially ahead of our initial expectations which was 200 bopd and would provide pay back on the well within 12 months on the basis of current oil prices and expected decline rates.

Well PFO 1005

The drilling of the PFO 1005 development well at the Puesto Flores field, the last of the current three well sequence, is proceeding as planned and is currently drilling at 2,000 metres with a target depth of 2,700 metres. A further update on progress will be made later this month.

President retains its pre-drill guidance of 200 bopd for the target production of PFO 1005.

Payment of the last part of the deferred acquisition cost of PF/EV

The final part of the deferred consideration payable to the Rio Negro Province of US$1.8 million has now been paid, meaning the full acquisition cost of PF/EV has been discharged.

The deferred consideration paid by President during 2018 was US$7 million, all paid from the Company's own funds.

Peter Levine, Chairman and Group CEO commented:

"We are pleasantly surprised at the initial flow results from PFE 1001, a well delivered on time and budget, and are now focused on the third well in the series alongside initial work on our newly acquired Rio Negro Concessions.

"President's stringent focus on G&A, opex, margins and cash flow as a dollar based business in Argentina means that it is in a strong position to benefit from increased production whilst providing downside protection against any oil price volatility or inflation."

Glossary

Bopd-barrels of oil per day

Ppm- Parts per million

C1-C5- Hydrocarbon gasses ranging from C1 lighter (methane gas) to C5 heavier (pentane indicative of oil)

Contact:

 
 President Energy PLC 
  Peter Levine, Chairman, Chief Executive 
  Rob Shepherd, Group FD                       [phone] 
 finnCap (Nominated Advisor & Joint 
  Broker) 
  Christopher Raggett, Scott Mathieson         [phone] 
 BMO Capital Markets (Joint Broker) 
  Jeremy Low, Tom Rider                        [phone] 
 Panmure Gordon (Joint Broker) 
  Charles Lesser, Dominic Morley               [phone] 
 Camarco Financial PR 
  Billy Clegg, Jane Glover, Violet Wilson      [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 currently has independently assessed 1P reserves in excess of 15 MMboe,2P reserves of more than 27 MMboe, and production approaching 3000 boe/d.

The Company has operated interests in the Puesto Flores and Estancia Vieja Concession, Rio Negro Province, in the Neuquén Basin of Argentina and in the Puesto Guardian Concession, in the Noroeste Basin in NW Argentina. The Company remains focused on growing production in the near term in 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.

President is 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) and an in-country management team, President Energy gives UK investors rare access to the Argentinian 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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December 07, 2018 02:00 ET (07:00 GMT)