Argentina-focused President Energy (LSE:PPC) told investors today that results from the first of three wells planned at its Puesto Flores field are at the ‘upper end of expectations’, sending shares up by 3pc to 8.4p.
The business said the PFO 1001 development well, which spudded last month, found oil shows in at least three formations, while gas reading during drilling reached up to 1m ppm with the range of C1 to C5 gas present. A full suite of electronic logs also showed hydrocarbon presence with ‘good to excellent’ porosity in the primary Punta Rosada formation as well as the deeper Pre Cuyo, and shallower Lotena formations.
A completion rig will be mobilised for the well early next month to test and complete the well and tie it in as a producer. At this point, President said it will make a further announcement on flow rates.
PFO 1001 is the first of a planned three-development well sequence at President’s 90pc-owned and-operated Puesto Flores field. The wells are targeting proven undeveloped reserves aimed at increasing gross Puesto Flores field oil production by a minimum of 600 additional bopd in aggregate. President has said it expects all three to be completed and on stream by year-end, helping to enhance company-wide current normalised net production, which sat at a record 2,700boepd in August.
It expects to follow this year’s programme up with further development wells at Puesto Flores and another field called Estancia Vieja in 2019, together with two exploration wells. It believes the shut-in gas production capability of certain wells at Estancia Vieja field to add more than 500boepd of additional initial production when placed online. President’s work at these two fields next year will sit alongside its planned 2019 development drilling in its producing Puesto Guardian field in Argentina as well as exploration drilling in Paraguay.
In today’s update, President said that the drilling rig is expected to move along and spud the second well in its current programme – PFE 1001 – ‘shortly’, following inspection and repairs.
Peter Levine, chairman and chief executive of President, added: ‘Whilst the acid test is that of flow rates which we anticipate for November, the delivery of a successfully drilled well and the results so far obtained are all very encouraging. When we commenced this three-well programme, we stated that we were targeting an initial 600bopd contribution in aggregate from those three wells. Whilst we still need to complete this well successfully and drill and complete the next two, based on the evidence to date, we now view the achievement of this target with increasing confidence.’
Author: Daniel Flynn
Disclosure: The author does not own shares in the company mentioned in this article