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President hits oil and gas at Lapacho x-1 well onshore Paraguay

10th December 2014

President Energy has reached TD at 4,543 metres at the Lapacho x-1 well in the Santa Rosa Formation, the primary pre-drill target, with 418 metres of the 600 metre target interval drilled, with encouraging hydrocarbon shows encountered throughout the gross formation thickness extending right to TD, with high background gas of up to 20 per cent and trip gas of up to 48 per cent (C1-C5 gas present)

President hits oil and gas at Lapacho x-1 well onshore Paraguay
The full logging programme was restricted due to difficult downhole conditions however, from the logs obtained, Lapacho x-1 penetrated 54 metres of clean sandstones with individual sand bed thicknesses up to 10 metres, most of which appear to be hydrocarbon bearing

“We are very encouraged by the hydrocarbon shows in the Santa Rosa Formation and look forward to flow testing the well, and announcing results in the near future,” said Peter Levine, President Energy chairman.

“Whilst it is too early to determine the composition of hydrocarbons in the Santa Rosa, both liquid and gas are extremely valuable commodities not only in Paraguay which imports all its own energy requirements but also in the neighbouring energy hungry countries of Brazil, Chile and Argentina.”

The full logging programme was restricted due to difficult downhole conditions however, from the logs obtained, Lapacho x-1 penetrated 54 metres of clean sandstones with individual sand bed thicknesses up to 10 metres, most of which appear to be hydrocarbon bearing.

Significant additional sandstone, some 30-metres plus, is expected in the undrilled target interval section below current TD, suggesting a total thickness of more than 80 metres of Santa Rosa reservoir sandstone at this location.

This outcome is in line with pre-drill estimates under which the well was targeting a discrete fault block trap containing gross mean prospective resources of 1 Tcf of gas (166 mmboe) and 30mmbbls of condensate within a greater Lapacho area considered to potentially contain some 5 Tcf plus associated condensate.

Consistent with valuation parameters published for the RPS audit report from January 2014, management value Lapacho resources at approximately USD 12 per boe for natural gas and USD 25 per barrel for liquids.

The rig is now progressing to open hole well testing operations and a multi-rate test is planned to commence in the next few days to determine fluid type, flow rates, pressures and permeability.

Upon completion of the Santa Rosa test, the separate, shallow discovery in the upper Icla formation will be tested.

An update with the initial results of the first test is planned in approximately 10 days.President’s 2014 drilling campaign has drilled two wells which have demonstrated the presence of a new Paleozoic hydrocarbon province in the Pirity Basin of the Paraguayan Chaco.

President operates the entire prospective area comprising 34,000 square kilometres spread across three concessions (Pirity, Demattei and Hernandarias).

Some 32 large Paleozoic structures and leads have been identified to date, and management estimates the Paraguayan Chaco hydrocarbon province could contain between one and four billion barrels of gross unrisked recoverable resources on an oil equivalent basis.

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