President Updates La. Revenues, Abandons Sidetrack
President's current monthly revenue from Louisiana has significantly increased to some US$ 550,000. Net operating profit from operations (after operating expenses and tax) is running at an average of US$ 421,000 per month for the three months to 30 November 2011. This is a 169% increase from the beginning of the year where Louisiana contributed US$ 156,000 per month in the first quarter. BOE (barrels of oil equivalent) production has shifted from a 50:50 ratio of oil to gas, to a ratio of 85% oil and 15% gas.
The Company also reports that due to unforeseen completion issues it has been decided at this moment in time to plug and abandon the McKerall 1 sidetrack and well EWL 53. On McKerall 1 it is thought that production flow from the payzone was inhibited due to concrete invasion of the formation and the cost of attempting to rectify this was not economically justified. At EWL 53 technical issues prevented completing and producing the well from the most productive zone. Whilst the well has been plugged and abandoned, consideration is being given to the drilling of a simple vertical well targeting the main pay zone identified in logs.
The results of both these wells are not material to the group and capital costs are available to set-off against the profitability now being achieved from Louisiana operations.
In light of the determination of President to focus and expand its operations in Argentina, the Company aims to maintain the solid cash flow from its Louisiana assets, with minimal capital outlay.
Commenting on today's announcement, Peter Levine, Chairman of President Petroleum Company Holdings BV said:
"Whilst it has to be acknowledged that Louisiana is now very much secondary to President's activities in Argentina, the increase in revenue from Louisiana is pleasing and is paying the Company's G & A costs as Argentina gears up."