StockMarketWire.com - President Energy announced the acquisition of incremental production in Louisiana.

HIGHLIGHTS:

- Acquisition of incremental production currently running at 150 boepd together with operatorship in the Triche Well, East Lake Verret, Louisiana, a well in which President has an existing interest

- Cash consideration of $2.25m with a further $400,000 earn-out based on future production. Effective date of purchase 1 April 2017

- Group average production April to date taking into account acquisition approximately 1,100 boepd

TRICHE WELL, EAST LAKE VERRET, LOUISIANA

The group had a 3% gross override and a 12% working interest (WI), 9% net revenue interest (NRI) in the Triche Well. It also said it processes oil and gas for the Triche well through its field facility at East Lake Verret under a production handling agreement.

President Energy agreed to acquire operatorship of the Triche Well together with an incremental 50% WI, 37.5% NRI, for $2.25m in cash paid on closing plus a further $400,000 earn-out based on future production. The effective date for the acquisition is 1 April 2017.

Current gross production of the Triche Well was running at approximately 400 boepd split equally between gas and oil meaning that 150 boepd (NRI) would be acquired by President.

Gross proven plus probable reserves (2P) were estimated by President Energy to be 690 MBoe which will result in President having total post-acquisition 2P reserves of 321 MBoe.

The life of the well was estimated at seven years on a reasonable reservoir management prognosis and is expected to pay-back in some 30 months at the rate of +/- $50 oil price per barrel.

President said it was making this acquisition based on its knowledge of the Triche Well, synergistic benefits, continued use of ita own processing facilities and the benefit of operatorship.

The Triche acquisition would mean average group production in April to date would be approximately 1,100 boepd taking into account the effective date of acquisition of 1 April 2017.

The acquisition was funded through President's existing financial resources and facilities with the current ongoing Argentine workover programme unaffected.




Story provided by StockMarketWire.com