TIDMPPC
RNS Number : 4635Q
President Energy PLC
21 October 2019
21 October 2019
PRESIDENT ENERGY PLC
("President" or the "Company")
Acquisition and Subscription
President Energy (AIM: PPC), the upstream oil and gas company
with a diverse portfolio of production and exploration assets
focused primarily in Argentina, announces the conditional
acquisition of an exploration contract in Rio Negro Province,
Argentina (the "Acquisition") and the subscription for US$1.825m of
new ordinary shares ("Ordinary Shares") in the capital of the
Company (the "Subscription").
Highlights
On 18 October 2019, President Petroleum S.A, a wholly owned
subsidiary of the Company agreed to take an assignment from
Compañia General De Combustibles S.A. ("CGC"), a significant oil
and gas producer in Argentina, of their 100% interest in the
exploration contract area known as Angostura, Rio Negro Province,
Argentina.
Separately, CGC, has agreed to invest US$1.825 million in a
number of instalments by subscribing for new Ordinary Shares at the
prevailing market price at the time each instalment is due.
The Acquisition
President has conditionally acquired from CGC the exploration
contract covering the 384 sq km area known as Angostura in the Rio
Negro province, Argentina (the "Exploration Contract"). Angostura
is situated directly to the west of President's Las Bases
Concession and the Company's pan-regional pipeline passes through
the south west corner of the area.
Angostura currently produces 80,000 m(3) /day of gas (2.8
MMscft/day) and 50 bopd, representing in total slightly in excess
of net 500 boepd, the Acquisition will therefore increase
President's daily production by more than 10%. All the gas is
currently compressed and dehydrated within Angostura, sent by
pipeline to President's Las Bases facility and then conveyed by the
Company's own pan-regional gas pipeline to offtakers. The oil will
be taken by truck to Las Bases/Puesto Prado and added to
President's existing oil production. There are currently no
reserves booked for Angostura.
The Acquisition is conditional on the consent of the Rio Negro
Province to the assignment of the Exploration Contract. It is
currently anticipated that such consent will be given within the
following 30 days. No consideration is to be payable by President
for the assignment of the Exploration Contract with President
assuming both income ,and certain liabilities and commitments in
relation to Angostura.
Whilst the first period of the Exploration Contract extends
until November 2019, President is entitled to request access to a
second exploration period , with a royalty of 15% over volumes
produced during the exploration phase. In the event that the
Exploration Contract, in due course, is converted at the request of
the Company into an Exploitation Concession of 25 years, for which
under the law no bonus is payable, the royalty is reduced from 15%
to 12%, and EDHIPSA (the Province's energy company and partner of
President in its other blocks in Rio Negro) will thereupon take a
20% interest in the Exploitation Concession with a deferred
carry.
A map showing the location of Angostura and its relationship
with the other assets of President in Rio Negro can be viewed on
the Company's website at www.presidentenergyplc.com.
The Subscription
CGC has agreed, conditional upon completion of the Acquisition,
to invest US$1.825 million in President by way of the
Subscription.
On completion of the Acquisition, CGC will invest the sum of
US$500,000, converted into Pounds Sterling at the prevailing
exchange rate on the day prior to completion of the Acquisition,
("the Initial Subscription Amount") in order to subscribe for such
number of Ordinary Shares (the "Initial Subscription Shares"),
calculated at the closing mid-market price per Ordinary Share
("MMP") on the trading day prior to the completion of the
Acquisition. CGC has agreed not to dispose of any interest in the
Initial Subscription Shares for a period of six months after their
issue.
CGC will thereafter invest the remaining US$1.325 million in
seven quarterly instalments in consideration for the issue of new
Ordinary Shares at the prevailing MMP on the date prior to the
relevant quarter date, with the first such quarterly payment being
due on 25 January 2020.
Peter Levine, Chairman, commented as follows:
"This corporate action represents a continuation of the strategy
of leveraging on our critical mass in Rio Negro and, in this case
in particular, our strategic gas pipeline. The contemplated
assignment would increase our production by over 10% whilst at the
same time providing synergies and enhancing economies of scale.
"I welcome the contemplated investment of CGC, a substantial
well-known and respected oil and gas Company, as a shareholder in
the Company."
Glossary
Boepd barrels of oil equivalent (oil and gas) per day
Bopd barrels of oil per day
M(3) cubic metres of gas
MMscft million standard cubic feet of gas
Contact:
President Energy PLC
Peter Levine, Chairman
Rob Shepherd, Group FD +44 (0) 207 016 7950
finnCap (Nominated Advisor)
Christopher Raggett, Scott Mathieson +44 (0) 207 220 0500
Whitman Howard (Broker)
Hugh Rich, Grant Barker +44 (0) 207 659 1234
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
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END
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