TIDMPPC
RNS Number : 6362A
President Energy PLC
02 January 2018
2 January 2018
PRESIDENT ENERGY PLC
("President", "the Company" or "President Energy")
Sale of Non-Operated Asset in Louisiana
Operated assets in Louisiana continue to generate some US$2.5
million pa in free cash after all opex, G&A and taxes
President Energy (AIM: PPC), the upstream oil and gas company
with a diverse portfolio of production and exploration assets
focused primarily in Argentina, announces the disposal of its
entire non-operated, non-core beneficial interest in the East White
Lake Field, Vermillion Parish, Louisiana, USA ("the Field") with
effect 1 January 2018 ("the Disposal").
The Disposal of this peripheral asset to Alpha Imperial Corp.,
("Alpha") for a total sum of US$525,000 reduces debt and at the
same time provides more resources for President to concentrate on
its core Argentine assets where production continues to increase
with the successful workover programme at the Puesto Flores Field
continuing and pilot testing of certain wells at the currently
shut-in Estancia Vieja Field planned for Q1 2018.
The effect on President of the Disposal is minimal with the
Company's continuing share of its operated assets in Louisiana
robust and stable, producing approximately 300 boepd, generating
annualised free positive cash on current oil prices after all opex,
G&A and taxes of some US$2.5 million per annum and the recent
Triche operated acquisition performing substantially ahead of
expectations.
East White Lake Field
The Company held a non-operated 25% working interest (21.8% net
revenue interest) in the main Field and approximately 2% working
and net revenue interest in the "Houston" well also in the Field.
In the calendar year 2017, President is estimated to have received
a sum equivalent to approximately US$22k per month from the Field
as a whole after opex, not insubstantial Operator Charges but
excluding depreciation. Average production for the last 3 months of
the year net to President is estimated at approximately 65 boepd
and in general is declining with, in President's opinion, no
possible significant economic uplift. Reserves at the Field are
currently estimated by President at 154 mboe and therefore the
Disposal makes no material difference to the Group's overall 1P and
2P reserves which remain at over 16MMboe and 25MMboe respectively.
There will also be certain liabilities for de-commissioning and
abandonment at the end of life of the Field ("the Liabilities") for
what was at one time a significant producing field with a number of
wells.
Taking into account the above and President's strategy to
concentrate on operating its own increasing profitable producing
fields, it was decided it was an appropriate time to dispose of the
Company's interest in the Field.
The Disposal
After considering a recent offer from the Operator of a
significantly lesser value, President's interest has now been sold
to Alpha for the above sum together with the assumption by Alpha of
the Liabilities and indemnification of President in respect
thereof. Alpha will take over the US$150,000 Surety Bond for the
Field, locked up through the Field life.
Alpha is a company whose ultimate beneficial owner is Peter
Levine, the Chairman and largest shareholder of President Energy,
and the purchase price will be satisfied by reducing the sum of
US$525,000 from the debt owed by President to IYA Global Limited
("IYA"), another company whose ultimate beneficial owner is Peter
Levine. The effect of this is to further lessen the debt and
interest burden on the Company, which has already been reduced by
the recent US$2 million debt capitalisation of monies owed to IYA
thereby freeing up more of the existing financial resources for
further growing the profitable Argentine producing assets.
Related Party Transaction
The Disposal to Alpha constitutes a related party transaction
for the purposes of AIM Rule 13. Miles Biggins, Rob Shepherd and
Jorge Dario Bongiovanni are considered to be independent directors
for the purposes of AIM Rule 13 ("Independent Directors"). As such,
the Independent Directors, having consulted with the Company's
nominated adviser finnCap Ltd, consider that the terms of the
Disposal are fair and reasonable insofar as the Company's
shareholders are concerned.
Contact:
President Energy PLC
Peter Levine, Chairman, Chief
Executive
Bruce Martin, Chief Financial
Officer +44 (0) 207 016 7950
finnCap (Nominated Advisor
& Joint Broker)
Christopher Raggett, Scott
Mathieson, Emily Morris +44 (0) 207 220 0573
BMO Capital Markets (Joint
Broker)
Jeremy Low, Neil Haycock, +44 (0) 207 236
Tom Rider 1010
Camarco Financial PR
Billy Clegg, Georgia Edmonds,
Mercedes Valenzuela-Goldman +44 (0) 203 757 4980
This announcement contains inside information for the purposes
of article 7 of Regulation 596/2014
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 independently assessed 1P
reserves in excess of 16 MMboe and 2P reserves of more than 25
MMboe.
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 is 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 Energy's second largest shareholder is the IFC, part
of the World Bank Group and 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 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.
Glossary
Bopd:barrels of oil per day
Boepd:barrels of oil equivalent per day
Mmboe: million barrels of oil equivalent
Mboe: thousands of barrels of oil equivalent
1P: proven oil reserves
2P: proven and probable oil reserves
This information is provided by RNS
The company news service from the London Stock Exchange
END
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