President Energy provides an update in relation to its Neuquén Basin assets in Rio Negro Province, Argentina.

Key points

• A seven-well workover programme at Puesto Flores has already commenced comprising six producing wells and one water injector
• Long term test of gas wells in Estancia Vieja field combined with sales of gas produced to commence next month
• Accelerated three well drilling programme at Puesto Flores to commence in September with rig and main contractors identified

Workover programme at Puesto Flores field
Following the success of our initial workover programme in early 2018 which materially increased production, the recently announced follow-on programme has now commenced and will cover seven wells, six of which are designated production wells and the other a water injector well. The work will take between 2-3 months and further announcements as to progress will be made in due course albeit not on a well by well basis due to the number of wells involved. 

Estancia Vieja field
Preparation has commenced for the long-term gas testing of three formerly shut-in gas wells which will be initiated in June. The gas produced from these 45 day tests will be sold through state of the art mobile LNG units based at the Estancia Vieja Battery. If the tests prove successful, the wells will be seamlessly placed on production with gas sold through these same units. The test results will be analysed to assess the optimum production levels from these previously drilled wells, the size of the gas reservoir as a whole at Estancia Vieja and its field development. President does not rule out other routes to market/use of the gas subject to volume.

Currently President only sells a modest amount of gas from its Puesto Flores field receiving approximately US$30k per month with the balance of gas produced used for internal field purposes, so the expected gas sales proceeds from the testing should substantially increase that amount. 

Drilling programme at Puesto Flores
This has now been accelerated further to start in September. The programme is now projected to comprise two development wells and one step out appraisal well. The inclusion of the step out appraisal well is due in no small part to the identification that not all production in this field can be explained as coming from four-way closures; there may be combined traps (stratigraphic and structural simultaneously) extending beyond the previously defined field boundaries within the Concession.

Argentina macro news
President notes the media attention given to matters concerning the peso exchange rate and inflation within Argentina. Whilst clearly and understandably these are matters of importance to the country, there are no current or envisaged material adverse changes to President's financial position or prospects. President agrees, sells and gets paid for its oil and gas monthly on the basis of a dollar value for which payment is receivable in pesos at the prevailing peso/dollar exchange rate calculated at the date the monthly monies are actually paid; for example, for oil production in the month of April from Puesto Flores, President received US$66.5/bbl converted to pesos at the time of payment for the oil. For the avoidance of doubt, President's Argentinian bank loan has its reference for both capital and interest in dollars.

Such media attention has, to a certain degree, hidden last week's significant positive development in the Argentine Congress. This is particularly relevant to the ongoing preparations for the listing of the Company's shares on the Argentine Stock Market as, according to the Financial Times, approving a new capital markets law, should boost the chances of Argentina being promoted to emerging market status by the MSCI benchmark equity index in June. 

Peter Levine, Chairman of President, commented:
"Action has commenced at our Neuquén Basin assets which will see us working continuously between now and the end of the year with the objective of achieving significant organic growth by the end of this year.

Our confidence and commitment to the country of Argentina and its prospects is underlined by the steadfast determination to increase and accelerate investment as well as the continuing plans to list our shares in Argentina and look for sympathetic, value generating acquisitions in the country."