South America-focused President Energy reported Monday that is has agreed to modify the amount of money it is paying to purchase its 100-percent ownership of the Puesto Guardian concession, onshore Argentina.
President said that, following a request from the seller of Puesto Guardian in order to accommodate its immediate capital needs, the company has agreed to make a payment of $800,000 to the seller with the previously-agreed deferred consideration of $1.88 million and a five-percent contingent overriding royalty being cancelled.
The revised terms now mean that the total purchase price for the outstanding 50 percent of the concession and operatorship is $5.8 million, compared to the previously-agreed actual and contingent sum of $17.88 million.
The firm added that it has now completed an initial review of Puesto Guardian and that this review further supports the company's view that there is "strong potential for significant production and proven reserves upside". As part of this review, and in preparation for the work program scheduled for the first quarter of 2015, President said it recently opened up an old shut-in well that produced 130 barrels of oil per day on a light swab test with good pressure support.
President also announced that it has agreed to renew its $15 million unsecured revolving loan facility until December 31, 2015.
President Chairman Peter Levine commented in a company statement:
"We are delighted to have taken operatorship and 100-percent ownership of Puesto Guardian at these revised terms. This opportunist transaction relieves President of actual and contingent liabilities arising from the acquisition totalling $12.88 million in consideration of an accelerated discounted sum of $800,000.
"We believe the Puesto Guardian concession offers considerable untapped potential and are greatly encouraged by the strong recent well test performance.
"The extension of the loan facility will continue to provide President with operational flexibility"
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