(President Energy, 25.Mar.2019) — President Energy announced plans for its work programme for 2019/20 at its fields in Rio Negro Province, Argentina (President 90%, Edhipsa 10%).
The estimated cost of the work programme between now and the end of 2020 is approximately US$50 million and is anticipated to be funded from President’s existing cash flow without recourse to any additional finance or borrowings ceteris paribus.
Summary Work Programme
2019
From now through mid-year an aggregate of at least 10 workovers in Puesto Flores (oil), Estancia Vieja (oil/gas), Puesto Prado (oil) and Las Bases (gas) will be carried out. The rig is currently being mobilised to the first well location
By end of May, the renovation and commissioning of the oil treatment plant in Puesto Prado. The commencement of deliveries of oil from the field direct to local refineries will give enhanced margins (current production 150 bopd from this area)
From end of May through to November the first phase repair, upgrading and commissioning of the multi-million dollar value gas plant in Las Bases in order for it to have the capacity to handle initially up to 250,000 m3 of gas of President’s own gas per day by end of October. The pipeline is already transporting approximately 20,000 m3 per day of third party gas for which a tariff is payable to President
In any event by mid-year gas flow will commence to the market from the Las Bases and Estancia Vieja fields through temporary facilities
From July through end of the year a target of seven new production/appraisal wells
By end September, the erection and completion of 14 km of new overhead electric lines between Estancia Vieja and Puesto Flores fields and the commissioning of an electricity generation plant to power the latter field from the former’s gas and to sell surplus electricity generated to the grid
By end October, the commencement of increased volumes of gas flowing through the building, completion and commissioning of a brand new 16 km section of 4” steel pipeline to be laid between Puesto Prado and Las Bases replacing the limited capacity 3” flexible pipeline between those points
The commencement of a further workover programme from October, details to be advised once the results of the present campaign are reviewed
The continuation of infrastructure works throughout the year
2020
The drilling on a rolling continuous programme through the year of an aggregate of eight new wells in Las Bases (gas), Puesto Prado (gas/oil), Estancia Vieja (gas) and Puesto Flores (oil). The wells being a combination of development, appraisal and exploration wells
Phase Two of the upgrading of the Las Bases gas plant will be completed to increase its capacity to its original design capability of 1 million m3 of gas
An aggregate of at least eight workovers of wells in the various fields in Rio Negro will be carried out
EXTRA DETAILS
- The above programme, estimated to cost approximately US$50 million between now and the end of 2020 is anticipated to be funded from President’s existing cash flow without recourse to additional finance or further borrowing on current market factors remaining broadly the same. Further, by end 2020 the company’s financial borrowings will have reduced by over US$6 million as inter alia bank borrowing facilities are steadily repaid.
- hilst modest in comparison to the total capex spend, the proceeds from recent fund raise has performed a very helpful role in enabling President to accelerate this programme as such additional increment gathers operational momentum later in the period.
- The work now planned will power the significant growth of the company from its organic assets and is a major step up in activity from that in 2018 when significant progress was achieved in all key performance indicators.
- In addition to the above programme which relates only to the company’s Rio Negro assets, planning work will continue in parallel for the drilling of up to two development wells in the Puesto Guardian Concession, one exploration well in the Pirity Concession, Paraguay, (President 100%) all targeted for end 2019/early 2020 and up to four exploration wells at Jefferson Island, Louisiana, (President 20% and operator) currently projected to commence by mid 2019. It is anticipated that all such work will likewise be funded from the company’s own resources.
- The company is currently targeting 50% exit production growth year on year in each of 2019 and 2020 and will provide updated guidance during Q3 2019 as the work programme develops.
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