President Energy (LON:PPC) has announced a new discovery well in Louisiana, USA.
The Eagle Crest well at the East Lake Verret project saw initial daily production rates of 492 barrels of oil and 2.3mln cubic feet of gas – which equates to 875 barrels oil equivalent (boe).
President’s participation in the well was ‘carried’. It benefits from a 12% interest in the project once the well achieves ‘pay-out’ and more immediately it sees a 3% royalty from the well.
The well is expected to reach the pay-out point by mid-2015.
While it does not have the sort of potential seen in the group’s recent shale discovery, it does add valuable cash-generative production at no cost.
Prior to the Eagle Crest discovery President’s stake in Louisiana based production amounted to 230 boe per day since April and as such has increased from the 200 barrels per day reported for the first quarter of the year.
In Argentina, the group’s other producing area, President is seeing production of 300 barrels of oil per day from the Puesto Guardian field – where the company now has full ownership.
Since taking over fully President now benefits from monthly positive cash flows of US$150,000 per month.
Executive chairman Peter Levine said: "In parallel with the high profile Paraguay exploration, President continues to focus on production activities from its over 13 mmbo of 2P oil reserves.
“The result of Eagle Crest in Louisiana is very pleasing particularly taking into account that it was at zero cost to the group.
“Following the acquisition of the whole of Puesto Guardian, there is renewed determination to realise the potential of this concession and its various fields which we originally identified when we purchased our initial stake."