President Petroleum Picks Up Producing Property in La.
President Petroleum has acquired a 25% working interest in East White Lake, a producing oil and gas field in Louisiana, USA.
Initial cash consideration of US $2.5 million will be funded from existing resources plus an additional sum of up to US $1.4 million payable from cash-flow generated by successful development of the proved undeveloped reserves and acquisition cost of US $8.26 per proved barrel of oil equivalent (boe).
East White Lake Field (EWL)
Net Reserves and Production (Based on NRI)
- Proved reserves of 471,900 boe of which 60% is oil
- Possible reserves of 857,900 boe
- Production expected to add 120 boe per day in second half 2010 increasing the Company's total production to some 280 boe per day
- Production potential from EWL of over 250 boe per day by second half 2011
The East White Lake oil and gas field is located in Vermilion Parish, Louisiana, some 80 miles west of the Company's existing production at East Lake Verret. The field has been in production for many years and the operator, Peak Energy LLC, has identified proved behind pipe and undeveloped reserves that could be quickly brought into production. The location of East White Lake in the Louisiana swamps and the geology of the field are very familiar to President Petroleum and the acquisition offers a low-risk opportunity to increase short-term production and cash-flow.
President Petroleum has acquired a 25% working interest from Peak Operating Company, Prep Assets LLC and Tenexco Inc. The acquisition is effective from January 1, 2010 and Peak Energy will remain the operator with a 41% working interest.
There are currently five producing wells in the field with two development wells firmly scheduled for Q1 2010 to bring on-stream proved, undeveloped reserves. Further development of the behind pipe and additional proved undeveloped reserves will follow. There is also a 13.6 bcf exploration target on which further work will be carried out.
The operating environment is very similar to East Lake Verret with well-maintained processing facilities and low operating costs. The State of Louisiana has introduced new tax incentives for drilling, and production from new wells will be exempt from severance taxes for a period of 5 years.