TIDMPGR
RNS Number : 1252W
Phoenix Global Resources PLC
09 December 2019
9 December 2019
Phoenix Global Resources plc
("Phoenix" or the "company")
Q3 2019 Operational Update
Operational highlights
-- Extended well testing continues at Mata Mora with the installation
of artificial lift planned on MMx-1001 in early 2020
-- Five wells completed in the Folded Agrio formation at Puesto
Rojas and all wells currently on flowback
-- The 2019 drilling campaign completed with the drilling of
two wells at La Paloma, satisfying the licence commitments
for the block
-- Waterflood optimisation ongoing at Chachahuen Sur as part
of secondary recovery operations to manage production decline
-- Average daily working interest production increased to 10,830
boe (Q2 2019: 9,640 boe)
Financial performance (unaudited)
-- Amended convertible RCF extended by US$10.0 million to fund
exploration and development activity through year-end
-- Q3 revenue of US$34.1 million (Q2 2019: US$36.5 million)
-- Average realised prices in Q3 2019 of US$38.9/ boe (Q2 2019:
US$45.1/ boe)
-- Sale of non-core, partner-operated conventional Santa Cruz
Sur assets completed 12 November 2019
Outlook
-- Planning underway for initial long-lateral unconventional
well to be drilled at Corralera in H1 2020
-- Work continues on the application for an unconventional
development concession at Mata Mora in 2020
Javier Vallesi, COO commented:
"We are pleased with the ongoing progress made during the
quarter where the paced development of our significant
unconventional development portfolio continues to show promising
results and to provide valuable information related to the
subsurface. Testing continues at Mata Mora, the results of which
will be used to help define the future drilling and the overall
development plan for the block. At Puesto Rojas, the vertical Agrio
unconventional wells were drilled and completed under budget and
are now on flowback. Consistent with our operational objectives, we
continue to build our organisational and execution capability as we
begin the appraisal and development of our unconventional
concessions.
The sale of our Santa Cruz assets in November further focuses
our resources on the company's significant unconventional acreage
consistent with our stated objective to become a leading,
Argentina-focused, unconventional development and production
company.
The board continues to monitor the transitional arrangements
following the October presidential election and believes that the
oil and gas industry will remain an important part of the economy
contributing to the future of Argentina."
For further information, please contact:
Phoenix Global Resources Kevin Dennehy, T: +54 11 5258 7500
plc CFO
Shore Capital Antonio Bossi T: +44 20 7408 4090
Joint broker and nominated David Coaten
adviser
Panmure Gordon Charles Lesser T: +44 20 7886 2500
Joint Broker
Camarco Billy Clegg T: +44 20 3757 4980
Financial PR Owen Roberts
James Crothers
About Phoenix
Phoenix Global Resources is an independent oil and gas
exploration and production company focused on Argentina and listed
on the London Stock Exchange (AIM: PGR) and the Buenos Aires Stock
Exchange (BCBA: PGR). The Company has over 1.8 million licenced
working interest acres in Argentina (of which over 0.7 million are
operated), 57.1 million boe of working interest 2P reserves and
average working interest production of approximately 10,249 boepd
in 2018. Phoenix has signi cant exposure to the unconventional
opportunity in Argentina through its approximately 700,000 working
interest acres with Vaca Muerta and other unconventional
potential.
The Company's website is www.phoenixglobalresources.com
Mata Mora
The extended well testing on MMx-1001 and MMx-1002 continued in
Q3 2019. Both wells remained on flowback for much of the period
with MMx-1002 temporarily shut in from 10 September 2019 to allow
for pressure monitoring on the well. As part of the testing and
evaluation of the wells, a production logging tool was run in
MMx-1001 in the period to assess the effectiveness of the
completions design and its execution and to help in future well
design and field development.
MMx-1002 is expected to return to production in early 2020
following the installation of artificial lift on MMx-1001,
dependent on the rate of pressure decline observed in MMx-1001.
Together, the two Mata Mora wells yielded total production of
110,697 boe on a working interest basis in Q3 2019, consistent with
budgeted expectations.
Puesto Rojas
The three new Folded Agrio unconventional wells, CDM-3014,
CDM-3011 and CDM-3025, were completed in the period. In addition,
the CDM-3007 and CDM-3012 were also re-completed in the Folded
Agrio formation. These two wells were drilled as part of the 2018
drilling and completions campaign and had previously only tested
the deeper Vaca Muerta and Organic Agrio sections. All the wells in
the 2019 Folded Agrio campaign were drilled and completed under
budget. The initial production expectations from the recent wells
have been adjusted downwards due to a combination of reservoir
response, lower than expected initial production from new wells and
production curtailments required as a consequence of limited gas
handling capabilities in the area. The company has recently
commenced a gas to power project at Puesto Rojas to mitigate the
constraint from associated gas.
Chachahuen
In Q3 2019, water quality for use in secondary recovery at
Chachahuen was improved and the rate of water injection increased
from 9.4 Mbbls/ day over 48 injector wells to 19 Mbbls/ day across
64 injector wells. It is expected that 16 further injector wells
will be connected by Q4 2019 thereby increasing the total water
injection rate at Chachahuen to 25 Mbbls/ day. To date, the
waterflood project at Chachahuen Sur has been effective in
arresting or slowing natural production decline in the well
stock.
At Cerro Morado Este 18, delineation wells have been drilled in
2019 with promising results overall. The operator, YPF, is planning
a waterflood pilot programme for the area in 2020.
It is estimated that the government commitments at Chachahuen
will be completed by January 2020. Four of the ten remaining
commitment wells have already been drilled and the final six will
be drilled during Q4 2019 and early 2020.
Other unconventional areas
Rio Atuel
The ML.x-1001 well finished drilling in the period and,
following completion, was put on production in October 2019. The
well is currently in the flowback stage with results under
evaluation.
The Rio Atuel block lies contiguous with Puesto Rojas and the
ML.x-1001 well satisfies the second phase commitments associated
with the block. The results of the well are expected to inform the
development strategy for the block with a third phase commitment
well to be drilled, potentially in 2020.
Other operated areas
La Paloma
Two wells, LP-9 and LP-7, were drilled in the La Paloma-Cerro
Alquitran area targeting the Grupo Neuquén formation. It is
anticipated that the completion of the wells will overcome the
variable permeability issues encountered in the neighbouring Loma
de la Mina conventional wells operated by YPF.
The completion of these wells will fulfil the licence
commitments associated with the blocks allowing the company to hold
the acreage until the expiry of the licences in December 2040. The
royalty rate associated with the licences is fixed at 12%.
Other partner operated areas
On 13 November 2019, the company announced the completion of the
sale to Echo Energy plc of its 70% non-operated interest in five
mature conventional production blocks comprising the Santa Cruz Sur
assets. The Santa Cruz Sur assets are located in the Austral basin
in south Argentina and their sale is in line with the company's
strategy to refocus Phoenix's portfolio to focus the company's
resources on the development of its significant unconventional oil
and gas portfolio.
Production summary
Q3 2019 WI Q3 2019 Q2 2019 Q2 2019 FY 2018
Gross Revised
BOE/D % NET BOE/D
---------------------------- -------- -----
Puesto Rojas Area
Puesto Rojas 1,327 100% 1,327 1,375 1,375 1,744
Cerro Mollar Norte 93 100% 93 86 86 91
Cerro Mollar Oeste 71 100% 71 81 81 88
La Brea 53 100% 53 31 31 37
---------------------------- -------- ----- -------- --------- -------- --------
Total Puesto Rojas Area 1,544 1,544 1,574 1,574 1,960
---------------------------- -------- ----- -------- --------- -------- --------
Mata Mora 1,203 90% 1,083 19 - -
---------------------------- -------- ----- -------- --------- -------- --------
Corralera - 90% - - - -
---------------------------- -------- ----- -------- --------- -------- --------
Chachahuen
Chachahuen Sur 9,734 20% 1,947 2,067 2,051 2,298
Chachahuen Sur (Permiso) - 20% - - 46 50
Cerro Morado Oeste 873 20% 175 87 57 -
---------------------------- -------- ----- -------- --------- -------- --------
Total Chachahuen 10,607 20% 2,121 2,154 2,154 2,348
---------------------------- -------- ----- -------- --------- -------- --------
Other unconventional
El Manzano Oeste (Agrio) - 100% - - - -
Rio Atuel - 67% - - - -
---------------------------- -------- ----- -------- --------- -------- --------
Total other unconventional - - - - -
---------------------------- -------- ----- -------- --------- -------- --------
Other operated
Atamisqui 339 100% 339 312 312 318
Refugio Tupungato 976 100% 976 969 969 1,002
Vega Grande - 100% - - - 12
---------------------------- -------- ----- -------- --------- -------- --------
Total other operated 1,315 1,315 1,281 1,281 1,332
Other partner operated
Angostura (CA-14) 4,160 17% 707 708 708 352
Campo Bremen 691 70% 484 441 441 538
Chorillos 2,508 70% 1,756 1,754 1,754 1,999
Cajon de los Caballos 303 38% 114 97 97 121
Las Violetas 3,658 17% 622 628 628 563
Moy Aike 110 70% 77 83 83 98
Oceano 523 70% 366 341 341 389
Rio Cullen 69 17% 12 9 9 22
Chañares Herrados 765 78% 597 508 508 499
Sur Rio Deseadso Este 11 25% 3 3 3 6
El Manzano Oeste (Resto) 71 40% 28 41 41 16
---------------------------- -------- ----- -------- --------- -------- --------
Other partner operated 12,870 4,766 4,612 4,612 4,603
---------------------------- -------- ----- -------- --------- -------- --------
Total production 27,540 10,830 9,640 9,621 10,254
---------------------------- -------- ----- -------- --------- -------- --------
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END
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