TIDMPPC
RNS Number : 2672X
President Energy PLC
09 August 2018
9 August 2018
PRESIDENT ENERGY PLC
("President", "the Company" or "the Group")
Trading update
President Energy (AIM: PPC), the upstream oil and gas company
with a diverse portfolio of production and exploration assets
focused primarily in Argentina, provides an update covering its
forthcoming new well programmes at the Puesto Flores/Estancia Vieja
Concession in Rio Negro Province, Argentina (President 90% and
operator - Ediphsa 10%), Group production, and the forthcoming
half-year accounts.
Key points
-- Three well development drilling programme at Puesto Flores
field confirmed to start by end September funded out of cash
flow
-- The wells target proven undeveloped reserves aimed at
increasing gross Puesto Flores field oil production by a minimum of
600 additional bopd in aggregate
-- Further development wells at Puesto Flores/Estancia Vieja
expected in 2019 together with two exploration wells
-- These complement 2019 development drilling in Puesto
Guardian, Argentina and exploration drilling in Paraguay
-- President's current normalised net production across all
areas is approximately 2,700 boepd of which 95% is oil with the
balance being gas in Louisiana
-- Group free positive cash flow generation from operations now
running in excess of US$2 million per month
-- H1 2018 results are anticipated to show a strong financial
position with record high production in June
-- The second half of the year expected to see further material
improvement on the first six months
New drilling
President can now confirm that the previously indicated new
three development well drilling programme at the Puesto Flores
field will commence by the end of September with the rig
contracted, long lead items ordered, approvals, consents and
permits obtained, and specialist sub-contractors being chosen. The
cost of the wells will be paid out of cash flow.
The wells all target proven undeveloped reserves, are designated
in planned order of drilling PFO 1001, PFE 1001 and PFO 1005 and
are aimed at increasing gross field production by 600 bopd in
aggregate on the base case. Each well is planned to be vertical
with a depth of between 2,300 and 2,700 meters. Once drilled, the
wells will be completed with a workover rig. It is expected the
wells will deliver a rapid payback and it is currently projected
that all three wells should be completed and on stream by the end
of this year.
President has already received nine drilling permits for
locations in Puesto Flores and it is expected that new development
wells together with two exploration wells will be drilled at that
Concession in 2019. The work next year will be complemented by new
development drilling in Puesto Guardian, Argentina and exploration
drilling in Paraguay.
Production
President's current normalized net production is approximately
2,700 boepd of which some 95% is oil with the balance being from
the gas contribution coming from Louisiana. The successful workover
programme at Puesto Flores is nearing its end with one well still
to complete.
As referred to above it is anticipated that by the end of the
year net production will be enhanced by oil from the new wells to
be drilled at Puesto Flores.
In addition to the above, the currently shut in gas production
capability of certain wells in the Estancia Vieja field would
further add in excess of 500 boepd additional initial production
if/when placed on line. Testing of certain wells there is still in
progress. As previously announced President is working on ways to
utilise such gas internally and to monetise any excess by early
2019. A progress report will be issued later this year.
The record level of production currently provides President with
free positive cash generation from operations in excess of US$2
million per month, and a strong financial position to move forward.
It enables President to self-fund full year 2018 capital payments
of over US$25 million comprising capex of US$16 million (including
the forthcoming drilling), the payment of US$7 million to the Rio
Negro Province being the balance of the monies due on the grant of
the Concession and also the repayment of US$2 million of the US$8
million bank debt taken out in November 2017.
The expected production from the new wells will further increase
this cash generation.
Half year accounts
Whilst the interim accounts for H1 2018 are still in preparation
with an estimated publication date of late September, they are
anticipated to show a company in a strong and ever improving
financial position. Furthermore, indications are that the second
half of the year will see continued material progress as turnover
grows and margins remain robust.
Peter Levine, Chairman of President, commented:
"With production and cash generation at record levels and the
capability to further expand organically, we now move to the
drilling programme with all at President focused on delivering
continued operational success and profits.
At the same time, we continue to explore opportunities for
growth by acquisition.
In all of this, as we rightly concentrate on profits, margins
and cash, it is easy to neglect the fact that President also has
significant exploration prospects in the north of Argentina and
Paraguay.
Finally, I continue to be most grateful to all of our employees,
partners and provincial authorities who, by their understanding and
support are helping us deliver these good results.
The Board looks to the future with considerable confidence."
Victor Linari, Master in Geology and Geophysics and Member of
Society of Exploration Geophysicists, 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.
Contact:
President Energy PLC
Peter Levine, Chairman, Chief Executive
Rob Shepherd, Group FD +44 (0) 207 016 7950
finnCap (Nominated Advisor & Joint
Broker)
Christopher Raggett, Scott Mathieson,
Andrew Burdis +44 (0) 207 220 0573
BMO Capital Markets (Joint Broker)
Jeremy Low, Tom Rider +44 (0) 207 236 1010
Camarco Financial PR
Billy Clegg, Owen Roberts, Violet
Wilson +44 (0) 203 757 4980
Glossary
Bopd-barrels of oil per day
Boepd-barrels of oil equivalent per day (oil, gas and
condensate)
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 currently has independently
assessed 1P reserves in excess of 15 MMboe and 2P reserves of more
than 27 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 third 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.
This announcement contains inside information for the purposes
of article 7 of Regulation 596/2014.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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