President Energy (AIM: PPC) announces its new independently certified hydrocarbon reserves report on its assets in Argentina ("the Report") calculated as at 31 December 2019.
The Report only addresses the Company's producing assets in Argentina and does not address its other assets in the USA and Paraguay.
- President's net 1P reserves stable at just over 15 MMboe representing a net increase from the previous year as production has been replaced:
• The Company's net Argentine 2P reserves increased to 25.9 MMboe (2018: 25.0 MMboe)
• The higher value Neuquen Basin 2P Reserves increased in 2019 by over 20% to 13.4 MMboe (2018: 11.4 MMboe)
- The Report therefore shows the increasing influence of the higher value and productive Neuquen Reserves compared to that in Salta Province, with the former now comprising 53% of the total 2P Reserves compared to 2017 where the respective percentage was 30%.
- President's net Argentina 3P reserves increased by 40% to 43 MMboe (2018: 30.5 MMboe) with in addition 2C Resources reported at 14.6 MMboe.
- The Neuquen Basin 1P and 2P reserves now comprise 30% gas, up from 16% in 2018 with gas production set to increase materially this year to a level reflective of the reserves ratio (2018: 3% of total production was gas).
- Only a limited amount of reserves have as yet been attributed to the Angostura block acquired in late 2019 which by the end of February is projected to be producing over 100,000m3 of gas per day (3.5 MMscft/d equivalent to 600 boepd) after a new more powerful compressor is commissioned.
- The EV/2P* ratio (enterprise value to 2P reserves) based on 4.05p being the mid market price of the Company's shares as at close of business on 24 January 2020 is calculated as approximately US$3.4 per 2P barrel
President has now received the independent Argentine Regulated Reserves Report calculated as at 31 December 2019 over its producing areas in Argentina being those in the Rio Negro Province, Neuquén Basin and the Salta Province, North West Basin. This report was prepared under, and in compliance with, Argentine Regulatory Standard requirements and is being filed with the relevant regulatory authorities. President rotates its Reserves Auditors each year, each of whom are registered and regulated with the Argentine Regulatory authorities.
The Report focuses only on President's producing assets in Argentina and does not take account of (1) the Company's producing hydrocarbon reserves and prospective resources in Louisiana nor (2) the prospective resources in President's Argentina and Paraguay exploration areas.
A table showing the independently reported reserves in Argentina by Province is set out below.
NET RESERVES TABLE
Puesto Guardian, Salta
Rio Negro, Neuquen Basin
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:
"In a year when no drilling took place, albeit numerous workovers, the reserves replacement and increases in key producing reserves in the Neuquén Basin in Argentina is commendable and sends a positive message underlining the future potential in our current assets. At the same time, our Puesto Guardian Concession remains an important and valuable asset which will also receive our substantive attention this year.
"Thus, with a resumption of development and exploration drilling in both Rio Negro and Salta, we look forward to another year of reserves growth.
"Furthermore, whilst abiding by the prudent and appropriate mantra of "step by step", we do not rule out a more substantial leap or two in 2020 if and when the right opportunities arise."
* Note - the EV takes into account the recent repayment of US$4m to Trafigura and the expected IYA debt conversion of US$1.95 expected to be approved at the General Meeting within the next 10 days. The 2P for this calculation assumes an estimated amount of 540 Mboe for reserves in Louisiana in addition to those in Argentina.