President Energy, the energy company with a diverse portfolio of production and exploration assets focused primarily in South America, provides an operational update with regard to certain activities in the Rio Negro Province, Argentina

Highlights

• Well LB-1001, Las Bases field now successfully on stream with production levels better than post workover tests
• Gas prices showing marked signs of increase
• President set to export oil at or around end April

LB-1001

Following the workover of well LB-1001 in the Las Bases field, this well has now been placed on stream. Initial production results demonstrate a better than expected level of gas production with no associated water and good pressure. This gives President confidence that levels in excess of the previously stated 61,000 m3/d of gas (2.1 MMsft/d or circa 350 boepd) can be achieved with careful well management.

Gas prices and Oil export

Gas prices in Argentina are now showing marked signs of increase now that the summer months are coming to an end.

In expectation of robust production of gas from the company's Rio Negro fields as a result of the current drilling campaign, President has within the last month effectively hedged part of its production to effect a baseline of steady income with the Company having the flexibility to sell the balance either at spot or at opportunistic rates should they arise.

President agreed at the start of this month to sell a fixed volume of 100,000 m3/d for a 13 months period commencing from 1 April 2021 to 30 April 2022 at a fixed flat price equivalent to approximately US$3 per MMBtu taking into account all relevant factors. This period covers the present month as well as the whole of the southern hemisphere winter 2021 and summer 2022. By way of reminder the winter period for the usually higher level gas prices extends 5 months from May to September inclusive with the summer of usually lower prices extending 7 months in every 12 month period from October to April inclusive.

Taking advantage of higher prices at the date hereof, President has now agreed to sell 35,000 m3/d for a 12 months period from the beginning of May at a fixed flat price of US$3.40 per MMBtu.

President has also received permission to sell through export 5,000 m3 (31,500 barrels) being part of its oil production in the second part of April. Whilst this should be considered more of an infrequent event eg in May we anticipate once again selling in the domestic market, both the experience creating a track record of exports and financial benefits however small, are all helpful.

Current realised domestic oil prices are running at approx. US$51.5 in Rio Negro and US$49 in Salta. The realisable prices for export after relative tax are estimated to be US$55. Average production for H1 2021 will be provided at the time of the publication of the half year results.

Paraguay

Final draft documentation is nearing conclusion and President is working on logistics and availability of signing authorities. Given the ongoing pandemic affecting Paraguay, whilst working towards the target signing date of at or around the end of this month, it may that the finalisation of agreements extends until early May. Nevertheless, President remains confident that there will indeed be a successful conclusion.

President is solely focussed on delivering a farm out package that provides appropriate financial support for drilling the exploration well in the first half of 2022. President repeats once again that under the contemplated arrangements it will remain operator and looks forward to the conclusion of these negotiations which have been underway for over 18 months.

Peter Levine, Chairman, commented:
"So far the results of LB-1001 are both pleasing and encouraging and we are moving on to the next stage of managing the well with confidence.

"As to gas prices and our export of oil in May, one can only say every little helps.

"Finally, we turn to focus on the logistics of the farm out and look forward to finalising the transaction in the coming weeks".

KeyFacts Energy: President Energy Argentina country profile