South America-focused junior oil firm President Energy said Monday that it plans to "materially increase production" via a multi-well drilling program in Argentina, now that the country is allowing dollars to be transferred abroad.
President said that in Argentina it benefits from realisation prices of approximately $58 per barrel that, combined with a current official peso rate of approximately 16 pesos to the dollars (compared with 10 pesos to the dollar in December 2015), assists in keeping margins robust and acts as a cushion against domestic inflation levels.
After a set of workovers on its current producing wells in Argentina, due to begin by the end of this month, President plans to start its multi-well drilling program during the second half of 2016. It said that planning has now progressed to negotiations with contractors.
Last autumn's change in government in Argentina has been seen as good news for the country's oil and gas industry, not least for the development of the vast Vaca Muerta shale gas province. At the time, the chairman of Andes Energia – a rival of President Energy – told Rigzone that the new government "represents a big, positive change for the industry because what they want to do is open the international market and bring foreign investors into the sector".
In its trading update, President said that its onshore Louisiana operation remains a profitable contributor to the overall business.
President added that it continues to trade comfortably within its debt facilities. Despite this it is still focusing on rationalizing its core central general and administrative costs and concentrating its spend in countries where the firm operates. As part of this rationalisation, its current London-based full-time group finance director, Ben Wilkinson, is stepping down and will be replaced by an interim, part-time CFO.
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