President Energy opens 3 new wells in Argentina, diversifies into lithium
[source: President Energy]
( ), an international oil and gas company, provided an operational update this morning. The company has assets primarily in Argentina, but also in Paraguay and the US.
Three new wells in Argentina
The main news from today's report is the opening of three new wells at the company's Puesto Guardian concession in Salta Province, Argentina. Combined, they are now producing 125-185 barrels of oil per day. Additionally, older wells at the site are being refurbished in order to boost production further.
President's Argentinian concessions remain operationally profitable, generating free cash flow, and exporting oil "to the extent possible and appropriate", the company said. Oil prices at the company's core Neuquen Basin currently hover around US$67/barrel and are increasing.
As a USD-based business, President is materially insulated from the high inflation currently plaguing Argentina. The company said it is carefully managing its existing Peso balances to mitigate exposure to inflation.
Additionally, President said it is installing a gas lift system at its Louisiana concession, in order to maintain and enhance production at the site, with wells expected to be fully operational again in August.
Peter Levine, Chairman of President Energy, commented: "Operations continue to progress in Salta and the levels of realized prices achieved when we export is particularly pleasing."
New lithium business
In related news, three days ago President Energy announced it had become a 75% shareholder in alternative energy company Green House, as part of its goal to diversify into renewable energy.
The purpose of Green House will be to "seed finance and incubate early-stage opportunities in the green and/or alternative energy sub-sector". Lithium extraction in the "lithium triangle" region of the Andes will be the new company's first project. The resource is mostly concentrated in the Argentinean Province of Salta where President already has an oil concession.
President has entered into a memorandum of understanding with Argentina's state-owned company responsible for managing the energy and mining resources of the Salta Province, REMSA. President and REMSA will set up a joint committee for selecting areas of no less than 1,000 hectares, for prospecting and initial topical exploration to determine next steps.
Lithium is also a USD-based business, thus the new enterprise will be shielded from inflation in the ARS.
Outlook and ATOME Energy
The company summarised the new direction and recent financial performance:
"The strategic transition is intended to re-energise President with the Group evolving into new horizons whilst at the same time benefitting from its profitable core business which delivered profits after tax of nearly US$5 million in 2021, free cash generation of some US$13 million with turnover projected for 2022 at over US$40 million and significant current operating profits, material exploration opportunities as well as the 28% investment interest in ATOME."
( ), which President spun off while retaining 28% interest, has defied the broader market downturn, with its shares up 34% YTD. ATOME focuses on hydrogen and ammonia production in Paraguay and Iceland. It was recently featured in our Hydrogen Roundup and recent update on its Paraguay operations.
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