President Energy, the upstream oil and gas company with a diverse portfolio of production and exploration assets focused primarily in Argentina, has provided 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."
