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President Energy PLC (PPC)

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Tuesday 16 July, 2019

President Energy PLC

Argentina update

RNS Number : 5975F
President Energy PLC
16 July 2019
 

 

16 July 2019

 

PRESIDENT ENERGY PLC

("President", "the Company" or "the Group")

 

Argentina update

 

President Energy (AIM: PPC), the upstream oil and gas company with a diverse portfolio of production and exploration assets focused primarily in Argentina, is pleased to provide an update on its frac operations at the Puesto Flores field, Rio Negro Province, Argentina.

 

Frac operation at well PFO-16 , Puesto Flores

As previously announced, President has recently conducted a trial hydraulic fracturing of well PFO-16 in the Puesto Flores field. The interval selected for fraccing was the Precuyo formation being tighter than the Punta Rosada in Puesto Flores, although the former is also present and producing whether on its own or co-mingled in four wells in Puesto Flores. As far as President is aware, this is the first time that any frac operation has taken place in the Puesto Flores field addressing the Precuyo formation.

 

Drilled in March 2012, PFO-16 is one of wells in the field producing solely from the Precuyo and, immediately prior to the frac, was producing at a modest rate of 8m3 net oil per day (ca. 50 barrels per day). It was chosen as the trial frac candidate due to the low production rate and perceived lack of proximity to substantial water bearing zones.

 

The frac operation was completed successfully with over 100,000lbs (45 tonnes) of proppant going into the formation. Flowback and testing operations are currently ongoing to clean out the well. 

 

President is pleased to report that so far the frac has proved to be at the high end of initial expectations. In the production testing that is taking place, the oil cut (ie net oil to total volume of liquids recovered) is a very good 95% and whilst clearly this is a depleted reservoir, the daily test rate of oil production 28m3 (c. 175 bpd) is 3x greater than the afor-mentioned pre-frac level.

 

The well, still not fully cleaned up after the frac, will be monitored for a month as a more prolonged period of time is needed to develop a more precise forward looking view as to the likely post frac behaviour of the formation operation and decline rates. It is nevertheless a most positive outcome so far for President's first frac with potentially a materially positive read across to other similar wells drilled and to be drilled.

 

With these preliminary results, President has now commenced planning for other frac candidates in existing wells across the Company's Rio Negro assets where the Precuyo is either at virgin or at a less depleted pressure than was encountered in PFO-16. In such instances, all other things being equal, the production rates post frac of such candidates would reasonably be expected to be significantly higher than in a depleted reservoir such as at PFO-16.

 

In the event that such a frac programme is implemented, it is anticipated it will take place, subject to equipment availability, during this year. The potential for enhancing production by fraccing will also be taken into account as appropriate in the forthcoming programme of new wells in Rio Negro.

 

A further announcement in relation to progress in the frac operations is expected to be made in about a month.  In the meantime the current workover programme continues.

 

Peter Levine M.A (Oxon) , Chairman commented:

 

"The frac results to date are very good.

 

"This is all part of a lot of our work in H1, namely developing a greater understanding of our Rio Negro reservoirs with the objective of finding ways to optimise production, mitigate decline rates and prolong economic field life.

 

"Whilst it is still a matter of step by step, we are most encouraged by what we are seeing so far from this trial frac, which has the potential to open a new front in extracting greater value from our fields."

 

 

 

Glossary

M3 is a cubic metre of oil with each one cubic metre equivalent to approximately 6.3 barrels of oil

 

Dr Martin Gee, PhD in Geophysics (Oxon), BSc (First Class hons) in Earth Sciences (Cardiff) who meets the criteria for qualified persons under the AIM guidance note for mining and gas companies, has reviewed and approved the technical information contained in this announcement

 



 

 

Contact:

 

President Energy PLC

Peter Levine, Chairman

Rob Shepherd, Group FD

+44 (0) 207 016 7950

 

 

finnCap (Nominated Advisor)

Christopher Raggett, Scott Mathieson

+44 (0) 207 220 0500

 

Panmure Gordon (Joint Broker)

Charles Lesser, Dominic Morley

 +44 (0) 207 886 2500

 

Whitman Howard (Joint Broker)

Hugh Rich, Grant Baker

+44 (0) 207 659 1234

Tavistock (Financial PR)

Nick Elwes, Simon Hudson

+44 (0) 207 920 3150

 

 

 

 

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, Estancia Vieja, Puesto Prado and Las Bases Concessions, Rio Negro Province as well as in the Neuquén Basin of Argentina and in the Puesto Guardian Concession, in the Noroeste Basin in NW 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.

 

The Group is also 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, including the IFC, part of the World Bank Group, an in-country management team as well as a Board whose interests are aligned to those of its shareholders, 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


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