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President Energy PLC (PPC)

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Friday 15 February, 2019

President Energy PLC

New independently certified reserves report

RNS Number : 0823Q
President Energy PLC
15 February 2019
 

 

15 February 2019

 

PRESIDENT ENERGY PLC

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

 

New Argentina independently certified reserves report

1P and 2P Neuquen Basin high value reserves increase by 90% and 40% respectively

Substantial increase in Group economic value of 2P reserves to nearly US$300 million

 

 

President Energy (AIM: PPC), the upstream oil and gas company with a diverse portfolio of production and exploration assets focused primarily South America, announces its new independently certified hydrocarbon reserves report on its assets in Argentina ("the Report") calculated as at 31 December 2018.

 

Report Highlights

 

·     President's net 1P and 2P reserves in the Neuquén Basin increased over the previous year by 82% and 41% respectively to 8.1MMboe and 11.4MMboe (y/e 2017 4.5MMboe and 8.0MMboe).

 

·     Overall Group net 1P reserves in Argentina increased by 6% to 15.4MMboe (y/e 2017 14.5MMboe).

 

·     The Group's overall net 2P reserves in Argentina show a decrease to 24.9MMboe (y/e 2017 26.5MMboe). The 2P differences are   due to the reserves in the Salta Province being prudently adjusted due to deliberately reduced capex activity as the Company focused on the higher value, value added Rio Negro fields.

 

·     President's net Argentina 3P reserves increased by 14% to 30.5MMboe (y/e 2017 26.8MMboe)

 

·     The Neuquen Basin 1P and 2P reserves comprise 81% oil with the balance being gas but with gas representing only some 3% of President's current production. Only a limited amount of reserves are currently attributed to the Las Bases and Puesto Prado Concessions acquired in December 2018. The reserves in these areas are expected to grow in 2019 as President implements its capex plans and, inter alia, significantly increases gas production.

 

·     The beneficial effect of such emphasis is demonstrated by the NPV10 value of President's net 1P and 2P Neuquen Basin reserves increasing by 44% and 22%  respectively to US$133 million and US$192 million (y/e 2017 US$92million and US$158 million), the Group's entire Argentina 2P reserves NPV 10 value increasing by 15% to US$291 million (y/e 2017 US$253 million) and the  3P Argentina reserves value increasing by 40% to US361 million (y/w 2017 US$258 million).

 

·     Combined with Management estimates of value for Louisiana reserves, the Group's net 2P reserves value calculated on an NPV10 basis  ignoring all exploration resources is now nearly US$300 million as at 31 December 2018, representing an approximate 200% premium to the Company's total enterprise value taking into account its current market capitalisation and total gross debt of approximately US$30 million.

 

Commentary

 

President has now received from its independent Argentine regulated reserves auditor the Report over its producing areas in Argentina including those in the Rio Negro Province, Neuquén Basin and the Salta Province, North West Basin.

 

The Report focuses only on producing assets in Argentina and does not take account of (1) the significant prospective resources of President's exploration areas in Argentina (2) the Company's producing hydrocarbon reserves and prospective resources in Louisiana nor (3) the extensive prospective resources in President's Paraguay exploration areas.

 

A table showing the independently certified reserves in Argentina by Province as well as management estimates of the Louisiana reserves is set out below.

 

 

NET RESERVES TABLE

(MMboe)

 

1P

2P

3P

Puesto Guardian, Salta

7.3

13.6

16.7

Rio Negro, Neuquen Basin

8.1

11.4

13.8

Total Argentina

15.4

25

30.5

Louisiana

0.6

0.6

0.6

 

Group Net reserves

16

25.6

31.1

 

Note- for the purposes of this table and the reserve figures, fraction numbers are rounded up if 0.05 or more or down if less than 0.05.   

 

 

Peter Levine, Chairman and Group CEO commented:

 

"The increases in key producing reserves and value in the Neuquén Basin in Argentina and its higher contribution to entire Group reserves reflect our successful and continued focus on that area. The report and our continued cash generation is a clear vindication of our philosophy of value over volume underpinned by the success of President's acquisitions policy in the last 18 months and our concentration on margins.

 

"Accordingly, we remain focused on materially increasing profitable hydrocarbon production combined with reserves growth.

 

"With the benefit of the latest acquisitions made in December, including the strategic gas pipeline and infrastructure, we are working diligently towards significantly growing our gas production this year as well as oil, thereby providing a more balanced energy portfolio." 

 

Glossary of terms

 

MMboe   millions of barrels of oil equivalent

1P - Proven hydrocarbon reserves

2P - Proven plus Probable hydrocarbon reserves

3P -  Proven plus probable plus possible hydrocarbon reserves

NPV10 -  Net present value discounted at 10 per cent through the life of each concession calculated at a flat US$68 per barrel

Reserves use a value of flat US$68 per barrel during the life of each Concession

  

Victor Linari, Master in Geology and Member of the Society of Exploration Geophysicists, 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, Chief Executive

Rob Shepherd, Group FD

 

 

+44 (0) 207 016 7950

 

finnCap (Nominated Advisor & Joint Broker)

Christopher Raggett, Scott Mathieson

 

+44 (0) 207 220 0573

 

Panmure Gordon (Joint Broker)

 

Charles Lesser, Dominic Morley

+44 (0) 207 886 2500

 

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 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


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 [email protected] or visit www.rns.com.
 
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