TIDMPPC
RNS Number : 2698Y
President Energy PLC
13 January 2022
13 January 2022
PRESIDENT ENERGY PLC
("President" or the "Company")
2021 Review
Operational update
President Energy (AIM: PPC), the international energy company,
provides a review of its activities in 2021 and an update on its
operations in Salta and Louisiana.
2021 Review
In 2021, the Company made very material progress in both its
core business and strategic assets and President expects that this
will be reflected in the Company's results for the year ended 31
December 2021 when published; as with previous years, we expect to
provide brief preliminary and unaudited highlights to the market in
late February.
In addition to its own improved year on year financial
performance, President added material value for its shareholders
through its corporate activity. The spin off and subsequent IPO of
Atome Energy PLC ("Atome") on the AIM market of the London Stock
Exchange under the ticker ATOM:LN generated US$23 million of
additional and tangible benefit to its shareholders (comprising the
shares in Atome distributed directly to President's shareholders
and the residual 27.9% interest in Atome retained by the Company
itself).
Other highlights of 2021 included:
1. Five new wells drilled in Argentina, in both Rio Negro and
Salta, with the Salta drilling programme still ongoing
2. A new oil treatment plant designed, engineered, constructed
and completed in Rio Negro now delivering material savings of opex
of over US$4 per barrel
3. President continued to export its oil from Argentina and the
prices currently being obtained for the Company's oil in Salta have
reached levels not previously seen by President
4. Whilst the total Group production showed no growth in the
year due to natural declines and the Louisiana wells shut ins for
most of year, the financial performance for the year is expected to
show a significant improvement on the previous year with materially
increased operational profits, adjusted EBITDA and free cash
generation. Group oil production in Argentina promises to
materially increase in Q1 2022 augmented by the drilling of wells
in Salta.
5. The Group's Argentine subsidiary issued a mini dollar
corporate bond in Argentina of US$9 million, rated investment grade
A- by the Argentine associate of the international rating agency
Fitch. Three times oversubscribed, it carried an interest rate of
only 1.34% per annum, a rate the Company believes is unmatched by
President's peer Group both outside as well as inside Argentina
6. As announced in the year, the long-awaited farm out of the
Paraguay exploration asset was both agreed and completed on
favourable terms with CPC Corporation, the State owned energy
company of Taiwan with President remaining operator and the asset
being held jointly 50/50 between the parties. Consequently,
shareholders are now able to look forward to a high impact
exploration well being drilled later this year targeting management
estimates of 230 million barrels of unrisked oil in place
7. As stated above, Atome, President's former green hydrogen and
ammonia subsidiary was successfully spun out of Group and was
admitted to trading on AIM as a separate independent company with
an initial market capital of approximately US$35 million. President
qualifying shareholders received a distribution by way of dividend
in specie totalling some US$13 million in value being the
equivalent yield of some 20% with President still retaining 27.9%
of Atome post IPO. It is pertinent to point out that Atome was
prudently valued at zero in the Company's accounts as recently as
at the end of 2020. The accounts of President for year end 2021
will therefore reflect a substantial benefit to the profit and loss
account as a result of this corporate strategy
Operational update
Following the last update there have been certain previously
unforeseen operational delays relating to the well DP-2003
including a decision made, now successfully effected despite tough
well bore conditions, to drill deeper than previously announced
after review of a interesting gas spike shown in the mud logs at
the point of the original target depth.
The independent review of the electric logs that the Company has
in its hands strongly supports the prognosis that this will be a
successful well and capable of producing at least, if not better
than, pre-drill expectations of 250 barrels of oil per day.
Casing has now been carefully and successfully run to the new
target depth of 3,266 metres and cementing is currently taking
place. The well will then be completed after DP-2001.
In the meantime, the workover rig has arrived from Neuquén and
is today commencing completion work on DP-2001, being the first
well drilled in the sequence. Subject to success, it is currently
expected that this well will be flowing oil 14-21 days thereafter.
The workover rig will then move to complete DP-2003.
In Louisiana, whilst delays in the workover is frustrating to
shareholders and management alike, they are all part of working in
deep wells and are no-ones fault. The permission from the State to
re-complete the well is hoped to be received soon relating to
plugging back and perforating a section higher up the hole. Work is
expected to commence as expeditiously as possible thereafter and
the Company will give an update at or around the end of this
month.
Chairman comments
Peter Levine, Chairman commented
"The achievements of last year were very significant as shown by
the brief details in this announcement. Each of the events have had
a material and beneficial effect on President's financial and
trading position and prospects. It is a testament to the enduring
hard work of our employees that we have been able to achieve so
much in such a short time.
"The Board shares the frustration of our employees and long-term
shareholders that this progress combined with a materially better
oil price environment and future prognosis is patently not
reflected in the Company's share price performance. The fact that
the current share price is even lower than the then low price at
the start of 2021, resonates more loudly and clearly than any words
I can say.
We will continue to do what we can to generate further success
this year in the energy field and transparently promote our
successes. Where appropriate and possible, we will implement
strategies to close the gap between the performance of the Company
and the value given to it by the market
"In this regard, we continue to assess various opportunities to
add to the Company's business with a view to diversifying the
geographical focus and nature of our energy asset portfolio in
respect of which Atome sets a clear precedent. We are fortunate to
have a proven track record and profitable platform from which to
achieve this as well as supportive key shareholders.
"We look forward with confidence to a successful 2022 and the
expansion in value of our group of energy companies".
Contact:
President Energy PLC +44 (0) 207 016 7950
Nikita Levine, Investor Relations info@presidentpc.com
finnCap (Nominated Advisor and broker)
Christopher Raggett, Tim Harper +44 (0) 207 220 0500
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, and
Angostura exploration contract, all of which are situated in the
Río Negro Province 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.
With a strong strategic and institutional base of support,
including the international commodity trader and logistics company
Trafigura, an in-country management team as well as the Chairman
whose interests as the largest shareholder are aligned to those of
its shareholders, President Energy gives UK investors access to an
energy growth story combined with world class standards of
corporate governance, environmental and social responsibility.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR"). The person who arranged for the release of this
announcement on behalf of the Company was Peter Levine,
Chairman.
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END
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