Interim Results

29 September, 2011

PRESIDENT PETROLEUM COMPANY PLC

("President" or "the Company")

Interim Results

President Petroleum (AIM:PPC), the oil and gas exploration and production company with onshore producing properties in the US and Argentina, and exploration licences in South Australia, announces its interim results for the six months ending June 30, 2011.

Highlights

Corporate

·; Corporate activity focused on acquisitions, culminating in the post period end acquisition of a 50% working interest in the Puesto Guardian concession in Argentina with existing oil production, and material upside potential through both exploitation of the reserve base and further exploration

·; H1 focus on preparation for production drilling activity for H2 2011

·; Increasing bias towards oil in portfolio

·; Investment in additional staff and business development activities

Operational

·; Targeted total production by mid 2012 in the range of 1,300-1,500 boepd with further production drilling work being considered in H2 2012

Louisiana

·; Well A49 East White Lake, Louisiana ("EWL") identifies potential oil reserves at least 50% higher than expected

·; New Louisiana Production well, McKerall 1 to spud within the next fourteen days

·; In August 2011, announced two successful recompletions in Louisiana and a successful PUD well at LA Furs 23

·; Production from Louisiana currently 210 boepd, prior to contribution from EWL 49 completion and any contribution from a successful McKerall 1

·; Acquisition of a 50% interest in the Puesto Guardian concession in the Noroeste basin

·; Operations on track and first production well to spud by the end of October as part of a five production well programme

·; President estimates net 2P reserves of 6.6 mln barrels of oil, and an NPV10 of at least $60 mln

·; Targeting a significant increase in net production in Argentina from 200 to 1,200 barrels of oil per day by the middle of 2012

Financial

·; Revenue of US$ 1.74 mln (2010 H1: US$1.77 mln)

·; Gross profit of US$ 0.52 mln (2010 H1: US$ 0.35 mln)

·; Operating loss US$15.52 mln (2010 H1: loss US$ 0.88 mln), mainly due to impairment charge on Kafoury 3

·; Cash balance as at 30 June $23.20 mln (2010 H1: $4.87 mln), with no debt

·; Tax losses from impairment to provide relief from corporate tax

John Hamilton, Interim Chairman of President Petroleum said:

"With the announcement of the acquisition of the Puesto Guardian concession, President has commenced an exceptionally active period for the company. This entry into Argentina represents the first stage of implementing our stated strategy and generates an exciting platform for growth. In Argentina, drilling is set to commence on a 5 well programme which should boost production materially.

Our recent drilling activities in Louisiana continue to deliver high value barrels of production. We have also seen further recent success with well A49 East White Lake identifying potential oil reserves at least 50% higher than expected.

With the completion of our commitments at PEL 82, Australia will for the time being, require minimal financial and management attention, but President continues studies on the encouraging geological results from the drilling of the Northumberland 2 well.

President looks forward with confidence to the high levels of drilling activity and new opportunities in Argentina. The Company will continue to pursue growth opportunities in its core areas of operations."

For further information contact:

Dr Jonathan M Cohen, FGS, C Geol, Executive Vice President Exploration, meets the criteria of qualified persons under the AIM guidance note for mining and oil and gas companies, has reviewed and approved the technical information contained in this announcement.

Chairman's Statement

The emphasis in H1 2011 was to successfully move from an exploration to a production focussed model. The group moved on from the disappointment of the unsuccessful exploration well at Kafoury 3 to a major new acquisition which sets President on a path to material production growth. Following its stated strategy of growth through acquisition, in June the group announced entry into Argentina through the acquisition of a prospective onshore licence block with existing oil production, and material upside potential through both exploitation of the reserve base and further exploration. 

Argentina

In June, the Company announced the acquisition of a 50% interest in the Puesto Guardian concession in the Noroeste basin in Argentina. The acquisition provides existing production, immediate development opportunities, and further reserve exploitation potential. PPC estimates net 2P reserves of 6.6 mln barrels of oil, assuming a pending licence extension is granted. A five well, jointly operated drilling programme has been agreed with an anticipated spud date of the first well by the end of October. The five well programme consists of four wells developing Proved Undeveloped Reserves and one targeting Probable Reserves. The aim is to access by passed reserves up-dip of existing wells based upon revised maps from a 3D survey. The wells will be designed for high quality completions utilising modern mud systems and fracture stimulation, which is expected to enable production rates to exceed those of older wells. President is targeting net production to rise significantly in Argentina from 200 to 1,200 barrels of oil per day by the middle of 2012.

Louisiana

While smaller scale work-overs were performed in the period, a series of new wells and recompletions commenced in June which have already contributed to materially higher production rates. Average daily production in the first half of 2011 was 137 barrels of oil equivalent. Although below 2010 levels of 185 barrels equivalent per day, oil accounted for 51% of production (41% in H1 2010) and higher hydrocarbons prices were realised. As a result, revenue was flat at US$1.74 mln in H1 2011 (H1 2010: US$1.77 mln).

Australia

In April, the Company announced the drilling results of its Northumberland 2 well on PEL 82 licence, in the Otway basin, South Australia. While no commercial discovery was made, President has been encouraged by hydrocarbon fluorescence and gas shows. A thicker than expected primary hydrocarbon reservoir was found to be present, extending to over 650 metres thick and still continuing at the time drilling ceased. The presence of a top seal was confirmed but at this location the seal was thinner than forecast relative to the throw of the bounding fault of this particular structure. President is now carrying out work on the many other structures in PEL 82 to identify where fault throw is less or the seal is thicker. President's licence commitments on PEL 82 have now been satisfied.

Financials

Gross profit improved to US$0.5 mln (H1 2010: US$0.35 mln) on the back of lower operating costs. Operating loss prior to impairments increased to US$2.5 mln (H1 2010: US$0.9 mln), principally through business development, restructuring and deal related costs, and the hiring of new staff critical to the growth of the business. The Group has recognised an impairment on the unsuccessful well at Kafoury 3 of US$12.9 mln, which results in an operating loss of US$15.5 mln. This impairment has created a favourable tax position which benefits our production net backs.

Outlook

President looks forward with confidence to the exciting second half of 2011 and further into 2012. In Australia, we continue to study the results of the Northumberland 2 well to assist decisions on future activity on the block. Building on recent successes, lower risk production drilling in Louisiana continues, with a goal of continuing to increase oil production while making use of low operating costs and the benefits of low tax. In Argentina, President is embarking on a 5 well drilling programme targeting a large increase in production to 1,200 barrels of oil per day by the middle of 2012. The macro economic climate in Argentina continues to improve for hydrocarbon producers, and President looks forward to growing a scalable business in country. The remainder of 2011 will see President moving towards material production growth and advancing its very promising position in Argentina.

Notes to the Consolidated Accounts

1. Nature of operations and general information

President Petroleum Company PLC and subsidiaries' (together 'the Group') principal activities are the exploration for and the evaluation and production of oil and gas.

President Petroleum Company PLC is the Group's ultimate parent company. It is incorporated and domiciled in England. The Group has onshore oil and gas production and reserves in the USA and Argentina. The Group also has onshore exploration assets in the USA and Australia. The address of President Petroleum Company PLC's registered office is 13 Regent Street, London, United Kingdom. President Petroleum Company PLC's shares are listed on the Alternative Investment Market of the London Stock Exchange.

These condensed consolidated interim financial statements (the interim financial statements) have been approved for issue by the Board of Directors on 21 September 2011. The financial information for the year ended 31 December 2010 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the six months ended 30 June 2011 and 30 June 2010 was neither audited nor reviewed by the auditors. The Group's statutory financial statements for the year ended 31 December 2010 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified.

2. Basis of preparation

The interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2010, which have been prepared under IFRS as adopted by the European Union.

These financial statements have been prepared under the historical cost convention, except for derivative financial instruments which have been measured at fair value. The interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2010.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements.