President is pleased to provide the issue of a new independent statement of Crude Oil Reserves and Contingent Resources effective July 31, 2014 for its 100% owned and operated Puesto Guardian Area, carried out by the international petroleum consultancy, Gaffney, Cline & Associates (GCA).
Company Highlights
- 1P Proven oil reserves increase by 333% from 2011 Company estimates*, to 9.1 MMBbls
- 2P Proven and Probable oil reserves increase by 114% from 2011 Company estimates*, to 14.1 MMBbls
- 3P Proven, Probable and Possible oil reserves of 17.5 MMBbls (no previous comparison)
- 1C , 2C and 3C Contingent Oil Resources of 3.2 MMBbl, 8.9 MMBbl and 16.5 MMBbl respectively related to Concession conversion/extension for which application is being made
- NPV 10 (net present value discounted by 10%, pre corporation tax) of President’s 2P Oil Reserves increased by 213% from the 2011 Company estimate to US$297MM, with 1P Oil Reserves assessed at US$161MM of this total
- In addition GCA had previously assessed that President had unrisked recoverable Best Estimate Prospective Resources as of October 31, 2011 of 570 Bcf of gas and 14.5 MMbbls of condensate relating to a deep Paleozoic gas/condensate prospect.
Summary
The GCA statement reveals a significant increase across the board in all categories of Oil Reserves Contingent Resources and NPV10 values at Puesto Guardian. The increases are not withstanding that President has had three years of continuous production since the 2011 estimates were made. The latest information reinforces the recent decision to acquire the remaining 50% of the Concession together with operatorship for a total of US$5.8m, and is independent confirmation of President’s belief in the significant potential of the Concession.
The volume of Contingent Resources relates to certain License concessions and extensions of term which are now permissible under a beneficial new Hydrocarbon Law recently passed in Argentina. Extension applications are in the process of being made.
As stated previously, work is progressing to develop a cost efficient 2015 work programme to increase the performance of existing wells and bring in new production from old shut-in wells. Details of the new programme will be announced in January 2015.
The new Statement of Reserves and Contingent Resources complements, and is in addition to the October 31, 2011 assessment by GCA of Prospective Resources over the Paleozoic deep gas/condensate prospect at the Martinez Del Tineo field on the Concession. The prospect has become more interesting due to the recent identification by President of a Paleozoic petroleum system across the border in its extensive Paraguay Concessions.
Peter Levine, Chairman, commented:
“The GCA report further demonstrates the significant upside the Puesto Guardian Concession offers and the opportunity President has, as operator, to realize this potential.
Work to develop the Puesto Guardian Concession will start in earnest in Q1 2015. We are very much looking forward to further increasing production at a time when we are receiving over $77 per barrel for our crude.”
2011 Company estimates are from June 2011 at the time of the initial acquisition of Puesto Guardian and reflect the then 50% ownership of the Concession. The GCA figures reflect the current 100% ownership, gross of royalties.
Miles Biggins, Bsc Joint Honours University College London, with 22 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.
