President Energy (AIM: PPC), the energy company with a diverse portfolio of production and exploration assets, provides an update in relation to the testing of the exploration well EVN-x1 near the main Estancia Vieja field, Rio Negro Province, Argentina, the logging of which was referred to in the announcement made on 27 October 2020.
· Preliminary testing of the lower of the two identified pay intervals shown by logs now completed
· Oil and associated gas successfully and continuously free flowed to surface without need for swabbing or pumping
· This represents the first time any hydrocarbons have flowed from this previously undrilled structure
· Results in line with P50 success case expectations with initial production of over 200 bopd expected plus associated gas
· Due to the productive success of this interval, the upper gas prone interval will be tested and then produced at a later time
· Workover rig now moving to the next location
· EVN-x1 will be placed into production in the next 14 days
As previously announced on 27 October 2020, the logging of the exploration well EVN-x1 confirmed pay in two clean sand intervals, the lower being oil, the upper being gas prone.
Completion of the well and preliminary testing of the lower of these intervals has now been completed. The testing, lasting some 36 hours using the workover rig has been successful with 36 degree API light oil plus associated gas continuously free flowing to surface, without the need to swab or pump, through various choke sizes ranging from a small 2mm up to 8mm. Testing with large size chokes eg to 16mm was not necessary as the results were both apparent and obvious. The results demonstrated that there is currently good energy in the relevant formation with both gas lift and a deeper water drive.
This is the first time that any hydrocarbons have been produced from the previously undrilled Estancia Vieja North structure and marks a successful end to the two well Q4 drilling campaign in Rio Negro, Argentina, both of which wells have been drilled and completed on time, on budget and have delivered in line with pre-drill projections including this current well which, as flagged, was an exploration well with the concomitant geological and drilling risks now successfully navigated.
The preliminary testing indicated that initial production levels can be expected in line with P50 pre-drill success expectations of over 200 bopd plus associated gas from this lower interval. As a clean sand with excellent porosity and estimated high vertical permeability, whilst it is expected that water will be produced as well as oil, water disposal will not be a problem. The well is near the main Estancia Vieja pipelines and facilities which will be used for evacuating both the oil and gas.
The workover rig is now being moved to the next location within President's fields and it is anticipated that the well will be placed on production in the next 14 days.
Due to the success in this lower interval, the upper gas-prone interval in the well will be kept back to be tested and placed into production at a later date. Initial production projections in respect of this upper interval remain at 60,000 m3/d (353 boepd).
Evaluation of this new structure will now commence and will continue through the new year as more production and pressure data becomes available. Accordingly, encouraging as these preliminary results are, this is a new unproduced structure with no direct analogues and it is therefore appropriate to take at this stage a conservative and step by step approach.
Peter Levine, Chairman commented
"Encouraging results and a successful end to our Q4 two well drilling campaign.
"Whilst work continues in our fields, we are now getting down to plan for next year with drilling very much on the agenda during 2021. We expect concrete plans to be made available by the end of January.
"In the meantime, we continue to make progress even in these challenging times".
Dr Martin Gee, PhD in Geophysics (Oxon), BSc (First Class hons) in Earth Sciences (Cardiff) who meets the criteria for qualified persons under the AIM guidance note for mining and gas companies, has reviewed and approved the technical information contained in this announcement