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President Energy PLC release operation update on Puesto Flores Field

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Oilfield Technology,

  • The third and fourth workover wells at the recently acquired Puesto Flores Field in Neuquén Basin, Argentina have been successfully completed ahead of time and under budget with an expected payback for the entire four well workover campaign of less than three months.
  • New untested intervals perforated and on stream in each well with preliminary results substantially ahead of expectations.
  • Gross Field production expected to reach approximately 1,700 bopd in February when the latest workovers stabilise, up significantly since the start of the workover campaign.
  • Cash flow and margins substantially ahead of pre-acquisition expectations.
  • President's share of production for the month of January from Argentina is expected to generate cash sales proceeds of US$4.5 million.
  • Expanded 2018 activity plan for President’s Neuquén Basin assets:
    • Initial testing of the shut-in Estancia Vieja Field to commence during February.
    • Further workovers at Puesto Flores scheduled for Q2 2018.
    • New drilling campaign planned to commence in H2 2018 to initially comprise development/appraisal wells.
  • 2018 capex fully funded from existing resources and cash flow.

President Energy has announced successful results from its third and fourth workover wells at the Puesto Flores Field, Rio Negro Province, Argentina (President 90% and Operator: Ediphsa 10%). The previously shut-in wells PFO-23 and PFO-10 were completed ahead of time and under budget at a total cost of US$950k versus a budget of US$1.25 million. The payback for the entire four well workover campaign is estimated at less than three months.

In accordance with the work plan for PFO-23 and PFO-10, the wells were cleaned out and the untested up-hole intervals in each well totalling some 21.5 metres net were perforated. The results were substantially ahead of expectations with testing at various flow rates ongoing. The two wells are now on stream and producing from the new intervals and once stabilised in February are expected to increase gross field production to approximately 1,700 bopd.

As a result of the success achieved, further workovers are planned at the Puesto Flores field in Q2 2018 with the commencement of development/appraisal drilling scheduled to commence in H2 of this year.

President has also now set in motion the testing of wells in the currently shut-in but previously producing adjacent field of Estancia Vieja within the same Concession with preliminary results due at the end of February. A total of up to four oil wells will be pilot tested with a more ambitious future programme including workovers and reactivations due to commence in Q2 2018. The Estancia Vieja field was previously a prolific producer of both oil and gas, at one stage producing over 18,000 boepd between 1992 and 1993, but was producing only 63 boepd prior to it being shut-in in 2011 by the previous operator.

All the costs of the said projected work at Puesto Flores and Estancia Vieja are fully funded and will be met out of the Group's existing resources and cash flow.

The Company is in a strong trading position. In relation to oil prices, President received US$60.80 per barrel for its December oil from the Puesto Flores Concession with oil produced in January currently expected to realise approximately US$64 per barrel. This increase of nearly 20% since President acquired the asset in September 2017 when the price was US$55, together with the increase in net production to President since the start of the workovers, is currently having a materially beneficial impact on cash flow and margins, which are substantially ahead of pre-acquisition expectations for this time.

Peter Levine, Chairman and CEO, commented:

"President is delivering positive results from its work at the Puesto Flores field which is a reflection of the company's growing in-country operational expertise. Concentrating our capex as previously announced on our Neuquén Basin assets, we enter 2018 with a multi-faceted, fully funded work programme. With all our Concessions in Argentina and Louisiana making profitable contributions we continue to focus on growth in shareholder value both organically and through the right acquisitions whilst maintaining our core emphasis on positive cash and margins."

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