President Energy, the upstream oil and gas company with a diverse portfolio of production and exploration assets focused primarily in Argentina is pleased to announce 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."