President Energy buys oil assets in Argentina
The deal adds in excess of 1,200 bopd net current production, currently selling at $55/barrel with a US$27 netback/barrel, taking the company's current production in Argentina alone to over 2,000 bopd.
It also adds 5.46 MMboe of net independently assessed 2P Reserves of which 3.6 MMboe is 1P proven, taking the company's independently assessed Reserves in Argentina to 16 MMboe of 1P and 25 MMboe of 2P.
Total monies to be paid relating to acquisition, covered by the extension of President's existing credit facilities, are a $400,000 purchase price already paid to Chevron for remainder of concession period to mid November 2017; and $15m to be paid to the Rio Negro Province for a 10-year extension of the concession to November 2027 with a further $7m payable through 2018.
President will partner with Ediphsa, the energy company of the province in the concession, who will hold 10% with President holding 90% as operator.
The province has given its approval to the work programme starting in 2018 and continuing during the extended period, which includes re-completions/workovers and new wells, aimed at materially growing production and increasing reserves.
Peter Levine, chairman and chief executive, said: "This acquisition represents a significant step into the world class Neuquen Basin, which is widely accepted as the most prolific hydrocarbon region in Argentina and one of the best in South America.
"It comes with good production pushing the company's current Argentine production above 2,000 boepd with significant future potential growth."
At 9:20am: (LON:PPC) President Energy Plc share price was +0.25p at 7.5p