Page 13 - LatAmOil Week 02 2022

LatAmOil NEWS IN BRIEF LatAmOil

PERFORMANCE
President Energy

announces operational

update and 2021 review

AIM-listed President Energy has provided a
review of its activities in 2021 and an update on
its operations in Salta.
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 December 31, 2021, when pub-
lished; as with previous years, we expect to pro-
vide brief preliminary and unaudited highlights
to the market in late February. farm out of the Paraguay exploration asset was and cementing is currently taking place. The well
In addition to its own improved year on year both agreed and completed on favourable terms will then be completed after DP-2001.
financial performance, President added material with CPC Corp., the state-owned energy com- In the meantime, the workover rig has arrived
value for its shareholders through its corporate pany of Taiwan, with President remaining opera- from Neuquén and is today commencing com-
activity. The spin off and subsequent IPO of tor and the asset being held jointly 50:50 between pletion work on DP-2001, being the first well
Atome Energy on the AIM market of the Lon- the parties. Consequently, shareholders are now drilled in the sequence. Subject to success, it is
don Stock Exchange under the ticker ATOM:LN able to look forward to a high impact exploration currently expected that this well will be flowing
generated $23mn of additional and tangible ben- well being drilled later this year targeting man- oil 14-21 days thereafter. The workover rig will
efit to its shareholders (comprising the shares in agement estimates of 230mn barrels of unrisked then move to complete DP-2003.
Atome distributed directly to President’s share- oil in place In Louisiana, whilst delays in the workover
holders and the residual 27.9% interest in Atome 7. As stated above, Atome, President’s for- is frustrating to shareholders and management
retained by the Company itself). mer green hydrogen and ammonia subsidiary, alike, they are all part of working in deep wells
Other highlights of 2021 included: was successfully spun out of Group and was and are no one’s fault. The permission from
1. Five new wells drilled in Argentina, in both admitted to trading on AIM as a separate inde- the State to re-complete the well is hoped to
Rio Negro and Salta, with the Salta drilling pro- pendent company with an initial market capital be received soon relating to plugging back and
gramme still ongoing. of approximately $35mn. President qualifying perforating a section higher up the hole. Work
2. A new oil treatment plant designed, engi- shareholders received a distribution by way is expected to commence as expeditiously as
neered, constructed and completed in Rio Negro of dividend in specie totalling some $13mn in possible thereafter and the Company will give
now delivering material savings of opex of over value being the equivalent yield of some 20%, an update at or around the end of this month.
$4 per barrel. with President still retaining 27.9% of Atome Peter Levine, Chairman, commented: “The
3. President continued to export its oil post IPO. It is pertinent to point out that Atome achievements of last year were very significant,
from Argentina and the prices currently being was prudently valued at zero in the Company’s as shown by the brief details in this announce-
obtained for the Company’s oil in Salta have accounts as recently as at the end of 2020. The ment. Each of the events have had a material
reached levels not previously seen by President. accounts of President for year end 2021 will and beneficial effect on President’s financial and
4. Whilst the total Group production showed therefore reflect a substantial benefit to the trading position and prospects. It is a testament
no growth in the year due to natural declines and profit and loss account as a result of this corpo- to the enduring hard work of our employees that
the Louisiana wells shut ins for most of year, the rate strategy we have been able to achieve so much in such a
financial performance for the year is expected to Operational update: Following the last update short time. The Board shares the frustration of
show a significant improvement on the previous there have been certain previously unforeseen our employees and long-term shareholders that
year with materially increased operational prof- operational delays relating to the well DP-2003 this progress combined with a materially better
its, adjusted EBITDA and free cash generation. including a decision made, now successfully oil price environment and future prognosis is
Group oil production in Argentina promises to effected despite tough well bore conditions, to patently not reflected in the Company’s share
materially increase in Q1-2022 augmented by drill deeper than previously announced after price performance. The fact that the current
the drilling of wells in Salta. review of a interesting gas spike shown in the share price is even lower than the then low price
5. The Group’s Argentine subsidiary issued a mud logs at the point of the original target depth. at the start of 2021, resonates more loudly and
mini dollar corporate bond in Argentina of $9 The independent review of the electric logs clearly than any words I can say.
million, rated investment grade A- by the Argen- that the Company has in its hands strongly sup- “We will continue to do what we can to gen-
tine associate of the international rating agency ports the prognosis that this will be a successful erate further success this year in the energy field
Fitch. Three times oversubscribed, it carried an well and capable of producing at least, if not bet- and transparently promote our successes. Where
interest rate of only 1.34% per annum, a rate the ter than, pre-drill expectations of 250 barrels per appropriate and possible, we will implement
Company believes is unmatched by President’s day (bpd) of oil. strategies to close the gap between the perfor-
peer Group both outside and inside Argentina. Casing has now been carefully and success- mance of the Company and the value given to it
6. As announced in the year, the long-awaited fully run to the new target depth of 3,266 metres by the market.

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