Interim Results

24 September 2013

PRESIDENT ENERGY PLC

("President Energy" or "the Company")

Interim Results

President Energy the Latin American focused exploration and production company, announces its interim results for the six months ended 30 June 2013.

Highlights

Operational

· In Paraguay, completed the envisaged acquisition of 2D and 3D seismic, and built up our in-country presence

· In Argentina, President successfully completed the three well stimulation programme at our Puesto Guardian concession

· First half 2013 average daily production of 365 boepd (Argentina 153 bopd, USA 212 boepd)

· Current group production of 575 boepd (over 90% oil), excluding the contribution of PE-8, reflects the successful well stimulation programme in Argentina, a 100% increase from prior to the stimulation programme

Paraguay

· Initial planned seismic acquisition programme has been successfully completed one month ahead of schedule (793 square kilometres of 3D seismic and 100 kilometres of 2D seismic)

· Company also decided to acquire a further 700 kilometres of 2D seismic to detail additional follow-on potential throughout the basin. This acquisition is almost completed

· Initial results appear to be very encouraging and more than 20 potential material drilling targets have already been identified

· New seismic highlights a Paleozoic play system not previously identified

Argentina

· Focus has been on value creation through seismic reprocessing and a proof of concept well stimulation programme

· Comprehensive independent reprocessing and remapping exercise undertaken on the 2006 3D data on two of the five fields within the Puesto Guardian Concession showing significant undrilled highs within the proven field areas

· At Pozo Escondido, management estimate an increase in stock tank oil initially in place ("STOIIP") of 215% from 20 MMB to 63 MMB. At the Dos Puntitas field, the reprocessing has validated the existing STOIIP of 15 MMB and six undrilled highs have been identified

· President and its partner successfully completed the three well stimulation campaign on wells PE7 and PE8 at the Pozo Escondido Field and well DP1001 at the Dos Puntitas Field

· Preliminary results of the two Pozo Escondido stimulations provide strong encouragement for the creation of new reserves in the carbonate reservoir, and for considering further stimulation across the large portfolio of old wells in the Concession

· Initial production from two of the three recently stimulated wells has increased total pre-work concession production by 100% with net production attributable to President currently running at approximately 300 bopd

· Average realised prices in the period were US$71 per barrel, and are currently over US$74 per barrel

Louisiana

· Louisiana continues to provide the Group with solid production and cash flow

· Average production in the period was up by 35% at 212 boepd (H1 2012: 157 boepd) (90% oil).

· Average realised oil prices in the period were US$108 per barrel and total realised price including the gas sales was US$97 per barrel of oil equivalent

· Current production is averaging approximately 275 boepd

Financial

·     Revenue increased by 14% to US$5.7 mln (H1 2012: US$5.0 mln) reflecting an increase in group average production for the period to 365 boepd (H1 2012: 312 boepd)

· Gross Profit US$1.9 mln (H1 2012: US$0.3 mln) attributable to increased volumes in Louisiana and improved cost of sales in Argentina

· Operating loss prior to impairments reduced to US$2.33 mln (H1 2012: US$3.98 mln)

· Operating loss reduced to US$2.79 mln (H1 2012: US$3.98 mln) after taking into account the impairment of US$0.46 mln on the relinquished PEL-132 licence

· Cash balance as at 30 June 2013 of US$ 6.8 mln (2012 H1: US$ 2.1 mln)

· The Group has a US$15 mln revolving loan facility in place from IYA Global Limited, a company within the Levine Capital group of companies 

· The very encouraging preliminary results received from the seismic acquired in Paraguay so far have reinforced and underlined the original decision to enter into this world-class exploration asset

· We expect to report the results of our seismic programme in Q4 2013 together with the issue of an updated CPR at the end of the year

· More than 20 potential material drilling targets have already been identified and preparations for drilling remain on course for the first well of a three well programme to be spudded in Q2 2014

· Good progress in Argentina with solid operating profit combined with excellent cashflow from Louisiana support President's activities

Peter Levine, Chairman of President, said:

"The six months to 30th June 2013 have seen a period of significant activity across our asset base, with a particular focus on Paraguay. The extensive seismic acquisition programme in Paraguay has confirmed the quality of the Cretaceous interval and highlighted a new paleozoic play system on the blocks. The work undertaken has underlined the great potential of our Paraguayan acreage. President is vigorously pursuing the exploration programme through the second half of the year in the lead up to drilling three new wells due to commence in Q2 2014."

Contact:

President Energy PLC

John Hamilton, CEO +44 (0) 207 016 7950

Ben Wilkinson, Finance Director +44 (0) 207 016 7950

RBC Capital Markets

Jeremy Low, Matthew Coakes, Daniel Conti +44 (0) 207 653 4000

Jefferies Hoare Govett

Simon Hardy, Max Jones +44 (0) 207 029 8316

Pelham Bell Pottinger +44 (0) 207 861 3232

Gavin Davis, Henry Lerwill

Chairman's Statement

Summary

The first half of 2013 demonstrated significant progress in the Company's business and was focused on execution of work programmes on our key projects. In Paraguay, we completed the envisaged acquisition of 2D and 3D seismic, and built up our in-country presence. The seismic acquisition was completed ahead of time and within budget. In Argentina, we successfully completed the three well stimulation programme at our Puesto Guardian concession, the results of which are set to provide a substantial uplift in production and cash flow with initial results, excluding PE-8, showing a 100% increase in total field production post stimulation. These initial results provide encouragement for the potential further development of the carbonate reservoirs and increase in total reserves for the concession. Louisiana continues to provide the Company with valuable cash flow, with the highest production figures for several years, combined with high oil prices. Group net production is currently approximately 575 boepd, an increase of 40% compared to the same period last year and the highest evel of oil production President Energy has ever achieved. Following the acquisition in Paraguay, the Company has a world-class exploration asset of material critical mass and upscale potential underpinned by existing reserves and production in its other assets.

Paraguay

Paraguay is the core focus of the Company, and, in management's view, the two concessions acquired in 2012 continue to demonstrate significant potential for the future. The original seismic acquisition programme was successfully completed one month ahead of schedule (793 square kilometres of 3D seismic and 100 kilometres of 2D seismic), with initial results appearing to be very encouraging. In addition to the original programme, the Company also decided to acquire a further 700 kilometres of 2D seismic to detail additional follow-on potential throughout the basin of which approximately 90% has now been completed. More than 20 potential material drilling targets have already been identified. The target high-graded areas identified to date lie within the Cretaceous interval; however, based on the new seismic, the basin also shows a large Paleozoic play system not previously identified. Technical work will seek to quantify this enlarged view of basin potential. In total therefore, the Company will have acquired 793 km2 of 3D and 800 km of 2D during the 2013 seismic season. We expect to report the results of our seismic programme in Q4 2013 together with the issue of an updated CPR at the end of the year. Preparations for drilling remain on course for the first well of a three well programme to be spudded in Q2 2014.

The 3D programme is the first to have ever been conducted in Paraguay. Paraguay recently held its Presidential elections, with Horacio Cartes elected in April and inaugurated in August 2013. The election result was a clear victory, and President Cartes has outlined at his inauguration his determination to attract inward foreign investment.

Argentina

President has sought to prioritise its work programme to focus on value creation through seismic reprocessing and a proof of concept well stimulation programme. President and its partner successfully completed the three well stimulation campaign on wells PE7 and PE8 at the Pozo Escondido Field and well DP1001 at the Dos Puntitas Field. Wells PE7 and PE8 had both been shut in for some 20 years and previously successfully produced from the A6 sands whilst showing unrecovered oil from the Carbonates above. Both showed original pressure and are not near water. The preliminary results of the two Pozo Escondido stimulations are providing strong encouragement for the establishment of new reserves in the carbonate reservoir, and for considering further stimulation across the large portfolio of old wells in the Concession. Initial production from two of the three recently stimulated wells has increased total pre-work concession production by 100% with the net production attributable to President currently running at approximately 300 bopd and expected to further increase with the contribution from PE-8. The stimulation program remains within the original budget.

The recent well stimulation results suggest there will be an increase in our Argentina reserves once a new CPR is issued, expected in H1 2014. As previously announced, a comprehensive independent reprocessing and remapping exercise was undertaken on the 2006 3D data on two of the five fields within the Puesto Guardian Concession. The reprocessing and interpretation of the data on the Pozo Escondido and Dos Puntitas fields has now been completed, showing significant undrilled highs within the proven field areas.

At Pozo Escondido, management estimate an increase in stock tank oil initially in place ("STOIIP") of 215% from 20 MMB to 63 MMB. At the Dos Puntitas field, the reprocessing has validated the existing STOIIP of 15 MMB and six undrilled highs have been identified.

These results, when combined with the low oil recovery to date, 1% and 11% for Pozo Escondido and Dos Puntitas, respectively, confirm management's view of further development potential in these fields through fracs, sidetracks and further drilling.

Average net production for the period was 153 bopd (H1 2012: 155 bopd). Current net production, with the contribution from two of the three recently stimulated wells, is approximately 300 bopd . Average realised prices in the period were US$71 per barrel, and are currently over US$74 per barrel.

Louisiana

Louisiana continues to provide the Group with solid production and cash flow. Average production in the period was up by 36% at 212 boepd (1H 2012: 157 boepd). Average realised oil prices were US$108 per barrel, and total realised price including the gas sales was US$97 per barrel of oil equivalent. Current production is averaging approximately 275 boepd.

Australia

President's two blocks in Australia are considered legacy assets. PEL 82 which the company is continuing to evaluate technically is currently the subject of farm-out discussions which may or may not reach a successful conclusion. A further announcement will be made in due course. Following technical review, PEL 132 has been relinquished with a consequent impairment taken of US$0.46 mln.

Financials

· Revenue increased by 14% to US$5.73 mln (H1 2012: US$5.03 mln) reflecting an increase in group average production for the period to 365 boepd (H1 2012: 312 boepd)

· Gross Profit increased by 519% to US$1.86 mln (H1 2012: Profit of US$0.30 mln) on the back of increased Louisiana production and an improved cost of sales position in Argentina. Delays to the well stimulation campaign in Argentina resulted in an equivalent production of 153 bopd to H1 2012 (155 bopd); despite this, the Argentine concession achieved a breakeven position and the post period end production increases will lead to further profitability

· Operating loss prior to impairments reduced to US$2.33 mln (H1 2012: US$3.98 mln), reflecting equivalent administrative expenses to the prior year despite the addition of Paraguay to the portfolio

· Operating loss reduced to US$2.79 mln (H1 2012: US$3.98 mln) after taking into account the impairment of US$0.46 mln on the relinquished PEL-132 licence

· Cash balance as at 30 June 2013 of US$ 6.8 mln (2012 H1: US$ 2.1 mln).The Group has a US$15 mln revolving loan facility in place from IYA Global Limited, a company within the Levine Capital group of companies. 

Outlook

The very encouraging preliminary results received from the seismic so far acquired in Paraguay have reinforced and underlined the original decision to enter into this world-class exploration asset. President is vigorously pursuing the exploration programme through the second half of the year in the lead up to drilling three new wells due to commence in Q2 2014.

The record production levels, following the success in Argentina together with the strong contribution of Louisiana, provides a solid foundation on which the company can go forward to focus on Paraguay.

Peter Levine

Chairman

23 September 2013

Statement of Comprehensive Income

Six months ended 30 June 2013

Consolidated Statement of Financial Position

30 June 2013

Consolidated Statement of Changes in Equity

Six months ended 30 June 2013

Consolidated Statement of Cash Flows

Six months ended 30 June 2013

Notes to the Consolidated Accounts

Six months ended 30 June 2013

1 Nature of operations and general information

The principle activities of President Energy PLC and its subsidiaries (together 'the Group') are the exploration for and the evaluation and production of oil and gas.

President Energy 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 Argentina and the USA. The Group also has onshore exploration assets in Paraguay, Argentina, the USA and Australia. The address of President Energy PLC's registered office is 11 Hill Street, London, United Kingdom. President Energy 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 23 September 2013. The financial information for the year ended 31 December 2012 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 2013 and 30 June 2012 was neither audited nor reviewed by the auditor. The Group's statutory financial statements for the year ended 31 December 2012 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

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 2012, 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 any 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 2012 with the exception that capitalised expenditure carried within each producing field is now depleted on a unit of production basis over the relevant proved and probable oil and gas reserves. Costs used in the unit of production calculation comprise the net book value of capitalised costs plus the estimated future field development costs. This is considered to be a change in accounting estimate under IAS 8 and accordingly the effect of the change is recognised prospectively and no prior period balance has been restated.

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

Following seismic reprocessing certain intangible exploration costs in Argentina have been reclassified as tangible Property Plant and Equipment. A number of USA intangible assets that have previously been provided against have now been eliminated as disposals.