President Energy Plc said on Jan. 12 it retrieved successful results from its third and fourth workover wells at the Puesto Flores Field, Rio Negro Province, Argentina.
The previously shut-in wells PFO-23 and PFO-10 were completed ahead of time and under budget at a total cost of $950,000 versus a budget of $1.25 million.
The payback for the entire four well workover campaign is estimated at less than three months. In accordance with the work plan for PFO-23 and PFO-10, the wells were cleaned out and the untested up-hole intervals in each well totaling some 70 ft (21.5 m) net were perforated.
The results were substantially ahead of expectations with testing at various flow rates ongoing. The two wells are now on stream and producing from the new intervals and once stabilized in February are expected to increase gross field production to approximately 1,700 barrels of oil per day.
As a result of the success achieved, further workovers are planned at the Puesto Flores field in second-quarter 2018 with the commencement of development/appraisal drilling scheduled to commence in H2 of this year.
President has also now set in motion the testing of wells in the currently shut-in, but previously producing, adjacent field of Estancia Vieja within the same Concession with preliminary results due at the end of February.
A total of up to four oil wells will be pilot tested with a more ambitious future program including workovers and reactivations due to commence in second-quarter 2018.
The Estancia Vieja Field was previously a prolific producer of both oil and gas, at one stage producing over 18,000 barrels of oil equivalent per day (boe/d) between 1992 and 1993, but was producing only 63 (boe/d) prior to it being shut-in in 2011 by the previous operator.
All the costs of the said projected work at Puesto Flores and Estancia Vieja are fully funded and will be met out of the group’s existing resources and cash flow.
The company is in a strong trading position. In relation to oil prices, President received $60.80/bbl for its December oil from the Puesto Flores Concession with oil produced in January currently expected to realize approximately $64/bbl.
This increase of nearly 20% since President acquired the asset in September 2017 when the price was $55/bbl, together with the increase in net production to President since the start of the workovers, is currently having a materially beneficial impact on cash flow and margins, which are substantially ahead of pre-acquisition expectations for this time.