9th Aug 2018 10:47
LONDON (Alliance News) - Oil and gas firm President Energy PLC confirmed Thursday it will be starting a three well development drill programme in Argentina by the end of September.
The aim of the work is to target proven undeveloped reserves to increase gross production from the Puesto Flores oil field, located in Rio Negro province, by at least 600 barrels of oil per day.
A rig has been secured, long lead items ordered, and all approvals have been granted, and the cost of the work will come from its cash flow, which is now over USD2 million a month.
The three wells are expected to deliver "rapid" payback and should be on full stream by the end of 2018.
President is also expecting to drill further development wells in 2019, alongside two exploration wells.
Current normalised net production is 2,700 barrels of oil per day across all of President's assets.
President has some shut-in gas capability on the Estancia Vieja field. Some wells are being tested currently, and the company is looking for ways to develop these assets.
The increased cash generation is enabled President to entirely self-fund its USD25 million plus capital expenses for 2018, of which USD16 million is capital expenditure, USD7 million due to Rio Negro province for the granting of concessions, and the repaying of some bank debt.
President expects its interim accounts, which are scheduled for release at the end of September, to show the company in "a strong and ever improved financial position".
Chairman Peter Levine commented: "With production and cash generation at record levels and the capability to further expand organically, we now move to the drilling programme with all at President focused on delivering continued operational success and profits.
"At the same time, we continue to explore opportunities for growth by acquisition."
"In all of this, as we rightly concentrate on profits, margins and cash, it is easy to neglect the fact President also has significant exploration prospects in the north of Argentina and Paraguay," he continued.
President Energy shares were 3.7% higher on Thursday at a price of 9.12 pence each.
Related Shares:
PPC.L