TIDMPPC
RNS Number : 0975W
President Energy PLC
21 April 2021
21 April 2021
PRESIDENT ENERGY PLC
("President" or the "Company")
Operations update
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
-- Well LB-1001, Las Bases field now successfully on stream with
production levels better than post workover tests
-- Gas prices showing marked signs of increase
-- President set to export oil at or around end April
LB-1001
Following the workover of well LB-1001 in the Las Bases field,
this well has now been placed on stream. Initial production results
demonstrate a better than expected level of gas production with no
associated water and good pressure. This gives President confidence
that levels in excess of the previously stated 61,000 m(3) /d of
gas (2.1 MMsft/d or circa 350 boepd) can be achieved with careful
well management.
Gas prices and Oil export
Gas prices in Argentina are now showing marked signs of increase
now that the summer months are coming to an end.
In expectation of robust production of gas from the company's
Rio Negro fields as a result of the current drilling campaign,
President has within the last month effectively hedged part of its
production to effect a baseline of steady income with the Company
having the flexibility to sell the balance either at spot or at
opportunistic rates should they arise.
President agreed at the start of this month to sell a fixed
volume of 100,000 m(3) /d for a 13 months period commencing from 1
April 2021 to 30 April 2022 at a fixed flat price equivalent to
approximately US$3 per MMBtu taking into account all relevant
factors. This period covers the present month as well as the whole
of the southern hemisphere winter 2021 and summer 2022. By way of
reminder the winter period for the usually higher level gas prices
extends 5 months from May to September inclusive with the summer of
usually lower prices extending 7 months in every 12 month period
from October to April inclusive.
Taking advantage of higher prices at the date hereof, President
has now agreed to sell 35,000 m(3) /d for a 12 months period from
the beginning of May at a fixed flat price of US$3.40 per
MMBtu.
President has also received permission to sell through export
5,000 m(3) (31,500 barrels) being part of its oil production in the
second part of April. Whilst this should be considered more of an
infrequent event eg in May we anticipate once again selling in the
domestic market, both the experience creating a track record of
exports and financial benefits however small, are all helpful.
Current realised domestic oil prices are running at approx.
US$51.5 in Rio Negro and US$49 in Salta. The realisable prices for
export after relative tax are estimated to be US$55. Average
production for H1 2021 will be provided at the time of the
publication of the half year results.
Paraguay
Final draft documentation is nearing conclusion and President is
working on logistics and availability of signing authorities. Given
the ongoing pandemic affecting Paraguay, whilst working towards the
target signing date of at or around the end of this month, it may
that the finalisation of agreements extends until early May.
Nevertheless, President remains confident that there will indeed be
a successful conclusion.
President is solely focussed on delivering a farm out package
that provides appropriate financial support for drilling the
exploration well in the first half of 2022. President repeats once
again that under the contemplated arrangements it will remain
operator and looks forward to the conclusion of these negotiations
which have been underway for over 18 months.
Peter Levine, Chairman, commented
"So far the results of LB-1001 are both pleasing and encouraging
and we are moving on to the next stage of managing the well with
confidence.
"As to gas prices and our export of oil in May, one can only say
every little helps.
"Finally, we turn to focus on the logistics of the farm out and
look forward to finalising the transaction in the coming
weeks".
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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