Andes Energia PLC AGM Statement (2369R)
25 June 2015 - 9:24PM
UK Regulatory
TIDMAEN
RNS Number : 2369R
Andes Energia PLC
25 June 2015
25(th) June 2015
Andes Energia plc
("Andes" or "the Company")
AGM Statement
At the Company's Annual General Meeting to be held at 2pm today
at the offices of Nabarro, 125 London Wall, London EC2Y 5AL, the
Chairman of Andes, Nicolas Mallo Huergo, will make the following
comments:
"Trading in the year to date has been in line with management
expectations with Group daily production increasing to 1,950 bpd in
Argentina and 1,400 bpd in Colombia taking total current production
levels to 3,350 bpd. Oil prices in Argentina remain at US$75 per
barrel, with Andes receiving a small discount to this, and in
Colombia prices are directly linked to Brent.
Good progress is being made at the Chachahuen development (Andes
20%, YPF 70%) with 29 wells drilled year to date, which has
contributed a further 1,080,000 boe to 1P reserves, taking Group 1P
reserves to 12,300,000 barrels*. With our partner YPF, we plan to
drill a further 60 wells over the next two years. Each well is
expected to contribute approximately 20 bpd of production net to
Andes.
Earlier this year, we were very encouraged by the results of the
Las Varillas x-1 well, which represents our fourth discovery and
test in Vaca Muerta and is our second well currently producing from
Vaca Muerta. The Las Varillas x-1 well continues to produce at 13
bpd.
The integration of Interoil is progressing to plan.
Finally, the Board was encouraged to note that on 24(th) June
2015 it was announced that 13 candidates have been selected for the
General Election in Argentina with the frontrunners perceived as
being pro-business."
*Unaudited
Ends
For further information please contact:
Andes Energia Nicolas Mallo Huergo, T: +54 11
plc Chairman 4110 5150
Alejandro Jotayan,
CEO T: +44 20
Billy Clegg, Head 3757 4983
of Communications
Macquarie Capital Jon Fitzpatrick T: +44 20
(Europe) Ltd Fergus Marcroft 3037 2000
Nick Stamp
Westhouse Securities Antonio Bossi T: +44 20
David Coaten 7601 6100
GMP Europe LLP Rob Collins T: +44 20
Emily Morris 7647 2800
Camarco Georgia Mann T: +44 20
3757 4986
Qualified Person Review
In accordance with AIM guidance for mining, oil and gas
companies, Mr. Juan Carlos Esteban has reviewed the information
contained in this announcement. Mr. Juan Carlos Esteban, an Officer
of the Group, is a petroleum engineer with over 20 years of
experience and is a member of the SPE (Society of Petroleum
Engineers).
Note to Editors:
Andes Energia is an oil and gas company focussed on onshore
South America with a market capitalisation of circa GBP174m. The
Company has its main operations in Argentina and Colombia.
The Company has 26MMbbls of conventional 2P reserves, and it
also has certified prospective resources of 659MMboe, primarily in
the Vaca Muerta unconventional formation in Argentina and 7.5
million acres across South America.
The Company has approximately 2 million net acres in
unconventional plays including 250,000 net acres in the Vaca Muerta
formation, which is the second largest shale oil deposit in the
world and the only producing shale oil deposit outside of the USA.
Over 300 wells have already been drilled and fracked in the Vaca
Muerta formation.
Andes is the only AIM quoted company on the London Stock
Exchange with exposure to the Vaca Muerta formation.
The Company currently produces 3,300 bbls per day in Argentina
and Colombia from 6 conventional fields in Argentina and 2 in
Colombia, with positive cash flows generated. Andes Energia, with
its partner YPF, has 30 wells planned over the next 12 months..
Considerations on Argentinean oil domestic market and
regulation
Domestic oil prices in the country are not directly linked with
international price movements, and have not been affected by recent
drops in WTI and Brent prices. In December 2014, National and
Provincial States, together with oil producers, refiners and retail
vendors formally agreed to set a price of US$75 per barrel for
crude oil. Argentina used to be a net oil exporter until 2008 with
extensive infrastructure available to transport oil from inland
fields to the Atlantic Ocean coast. In 2014 the country imported
minimal quantities of crude oil for the first time in 20 years, but
in 2015 the supply/demand situation is expected to be balanced. All
big refiners, except one, are also crude producers, and all of them
sell the refined products domestically. Part of the refining
capacity is located inland near oil fields, at more than 1,000 km
from the Atlantic coastline, which implies a substantial transport
cost to process imported crude oil. Additionally, the country is
running with a shortage of foreign currency in the Central Bank
reserves, and companies who want to import must ask for
authorisation from the Central Bank to receive foreign currency to
pay for imports. There is, therefore, an incentive for the State to
promote the consumption of local crude oil instead of authorising
oil imports, even at a higher price than import parity, to avoid a
loss of foreign currency reserves and to incentivise domestic
production, investments, jobs and other activities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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