TIDMPPC
RNS Number : 0823Q
President Energy PLC
15 February 2019
15 February 2019
PRESIDENT ENERGY PLC
("President", "the Company" or "the Group")
New Argentina independently certified reserves report
1P and 2P Neuquen Basin high value reserves increase by 90% and
40% respectively
Substantial increase in Group economic value of 2P reserves to
nearly US$300 million
President Energy (AIM: PPC), the upstream oil and gas company
with a diverse portfolio of production and exploration assets
focused primarily South America, announces its new independently
certified hydrocarbon reserves report on its assets in Argentina
("the Report") calculated as at 31 December 2018.
Report Highlights
-- President's net 1P and 2P reserves in the Neuquén Basin
increased over the previous year by 82% and 41% respectively to
8.1MMboe and 11.4MMboe (y/e 2017 4.5MMboe and 8.0MMboe).
-- Overall Group net 1P reserves in Argentina increased by 6% to
15.4MMboe (y/e 2017 14.5MMboe).
-- The Group's overall net 2P reserves in Argentina show a
decrease to 24.9MMboe (y/e 2017 26.5MMboe). The 2P differences are
due to the reserves in the Salta Province being prudently adjusted
due to deliberately reduced capex activity as the Company focused
on the higher value, value added Rio Negro fields.
-- President's net Argentina 3P reserves increased by 14% to 30.5MMboe (y/e 2017 26.8MMboe)
-- The Neuquen Basin 1P and 2P reserves comprise 81% oil with
the balance being gas but with gas representing only some 3% of
President's current production. Only a limited amount of reserves
are currently attributed to the Las Bases and Puesto Prado
Concessions acquired in December 2018. The reserves in these areas
are expected to grow in 2019 as President implements its capex
plans and, inter alia, significantly increases gas production.
-- The beneficial effect of such emphasis is demonstrated by the
NPV10 value of President's net 1P and 2P Neuquen Basin reserves
increasing by 44% and 22% respectively to US$133 million and US$192
million (y/e 2017 US$92million and US$158 million), the Group's
entire Argentina 2P reserves NPV 10 value increasing by 15% to
US$291 million (y/e 2017 US$253 million) and the 3P Argentina
reserves value increasing by 40% to US361 million (y/w 2017 US$258
million).
-- Combined with Management estimates of value for Louisiana
reserves, the Group's net 2P reserves value calculated on an NPV10
basis ignoring all exploration resources is now nearly US$300
million as at 31 December 2018, representing an approximate 200%
premium to the Company's total enterprise value taking into account
its current market capitalisation and total gross debt of
approximately US$30 million.
Commentary
President has now received from its independent Argentine
regulated reserves auditor the Report over its producing areas in
Argentina including those in the Rio Negro Province, Neuquén Basin
and the Salta Province, North West Basin.
The Report focuses only on producing assets in Argentina and
does not take account of (1) the significant prospective resources
of President's exploration areas in Argentina (2) the Company's
producing hydrocarbon reserves and prospective resources in
Louisiana nor (3) the extensive prospective resources in
President's Paraguay exploration areas.
A table showing the independently certified reserves in
Argentina by Province as well as management estimates of the
Louisiana reserves is set out below.
NET RESERVES TABLE
(MMboe)
1P 2P 3P
Puesto Guardian, Salta 7.3 13.6 16.7
Rio Negro, Neuquen
Basin 8.1 11.4 13.8
Total Argentina 15.4 25 30.5
Louisiana 0.6 0.6 0.6
Group Net reserves 16 25.6 31.1
Note- for the purposes of this table and the reserve figures,
fraction numbers are rounded up if 0.05 or more or down if less
than 0.05.
Peter Levine, Chairman and Group CEO commented:
"The increases in key producing reserves and value in the
Neuquén Basin in Argentina and its higher contribution to entire
Group reserves reflect our successful and continued focus on that
area. The report and our continued cash generation is a clear
vindication of our philosophy of value over volume underpinned by
the success of President's acquisitions policy in the last 18
months and our concentration on margins.
"Accordingly, we remain focused on materially increasing
profitable hydrocarbon production combined with reserves
growth.
"With the benefit of the latest acquisitions made in December,
including the strategic gas pipeline and infrastructure, we are
working diligently towards significantly growing our gas production
this year as well as oil, thereby providing a more balanced energy
portfolio."
Glossary of terms
MMboe millions of barrels of oil equivalent
1P - Proven hydrocarbon reserves
2P - Proven plus Probable hydrocarbon reserves
3P - Proven plus probable plus possible hydrocarbon reserves
NPV10 - Net present value discounted at 10 per cent through the
life of each concession calculated at a flat US$68 per barrel
Reserves use a value of flat US$68 per barrel during the life of
each Concession
Victor Linari, Master in Geology and Member of the Society of
Exploration Geophysicists, who meets the criteria for qualified
persons under the AIM guidance note for mining and gas companies,
has reviewed and approved the technical information contained in
this announcement.
Contact:
President Energy PLC
Peter Levine, Chairman, Chief Executive
Rob Shepherd, Group FD +44 (0) 207 016 7950
finnCap (Nominated Advisor & Joint
Broker)
Christopher Raggett, Scott Mathieson +44 (0) 207 220 0573
Panmure Gordon (Joint Broker)
Charles Lesser, Dominic Morley +44 (0) 207 886 2500
Tavistock (Financial PR)
Nick Elwes, Simon Hudson +44 (0) 207 920 3150
Notes to Editors
President Energy is an oil and gas company listed on the AIM
market of the London Stock Exchange (PPC.L) primarily focused in
Argentina, with a diverse portfolio of operated onshore producing
and exploration assets.
The Company has operated interests in the Puesto Flores,
Estancia Vieja, Puesto Prado and Las Bases Concessions, Rio Negro
Province as well as in the Neuquén Basin of Argentina and in the
Puesto Guardian Concession, in the Noroeste Basin in NW Argentina.
Alongside this, President Energy has cash generative production
assets in Louisiana, USA and further significant exploration and
development opportunities through its acreage in Paraguay and
Argentina.
The Group is also actively pursuing value accretive acquisitions
of high-quality production and development assets in Argentina
capable of delivering positive cash flows and shareholder returns.
With a strong institutional base of support, including the IFC,
part of the World Bank Group, an in-country management team as well
as a Board whose interests are aligned to those of its
shareholders, President Energy gives UK investors rare access to
the Argentinian growth story combined with world class standards of
corporate governance, environmental and social responsibility.
This announcement contains inside information for the purposes
of article 7 of Regulation 596/2014
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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