President Energy provides corporate and operational update on Paraguay and Argentina assets
President is pleased to provide a Corporate and Operational Update on its Paraguay and Argentina Assets.
- Current trading in line with management expectations
- Both Argentina and Louisiana trading profitably
- Contract signed for new workovers in Argentina to commence by end of March
- President planning to commence new drilling programme in Argentina H2 2016
- Company trading within its funding facilities with adequate headroom
- Continued emphasis on G&A cost reductions and team building in Argentina
- Ben Wilkinson steps down as Group Finance Director
Current trading of the Company's Argentina and Louisiana operations continues in line with management expectations, with both trading profitably at current oil and gas prices.
Louisiana remains a profitable contributor to the Group. Argentina benefits from realisation prices of approximately US$58 per barrel which, combined with an official peso rate of approximately 16 pesos to the dollar compared with less than 10 pesos in December 2015, assists in keeping margins robust and acts as a cushion against domestic inflation levels. As it is now possible to transfer dollars out of Argentina, the operation is expected to become a net cash contributor to the Group in H2 2016.
The next set of workovers are due to commence by the end of March 2016 with purchase orders signed for an initial four well programme. This programme will be funded out of cash generated by the Company's Argentine operation without the need to draw on the Group's facilities.
President continues to plan a multi-well drilling programme in Argentina to materially increase production, with a view to commencing drilling in H2 2016. Planning has now progressed to negotiations with contractors. At this stage it is prudent not to make a definite commitment in relation to such programme, however the Company is cautiously optimistic that such a work programme will be implemented in H2 2016. With the improving investment environment in Argentina, it is anticipated that the funding of the drilling programme will be sourced out of existing and/or new facilities and therefore on that basis the Company does not believe it will be necessary to raise additional equity.
The Company continues to trade within its facilities with adequate headroom and benefits from the support and goodwill of its sole funder, IYA, a part of Peter Levine's PLLG Investments Group.
Emphasis remains on rationalising core central G&A costs and concentrating spend in countries where President operates. Taking this into account, Ben Wilkinson, the Company's London-based full-time Group Finance Director has agreed to step down as director with immediate effect and from the Company in due course with his current responsibilities being shared between the Company's existing Group Financial Controller and an interim, part-time, Chief Financial Officer, to be appointed as soon as practical. Ben Wilkinson has been an excellent and hard working executive and leaves with the Company's good wishes for the future.
Given the Board changes, and as previously indicated in the release on 14 December, 2015, the Company intends to appoint a second independent non-executive director within the next three months.
This article is for information and discussion purposes only and does not form a recommendation
to invest or otherwise. The value of an investment may fall. The investments referred to in this
article may not be suitable for all investors, and if in doubt, an investor should seek advice from
a qualified investment adviser. More
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