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President takes control of entire Pirity Rift Basin in Paraguay following Hernandarias deal approval

15th August 2014

President has announced an update on the Hernandarias Block in the Chaco region of Paraguay, and the conditional farm-in previously announced on 10 January, 2014

President takes control of entire Pirity Rift Basin in Paraguay following Hernandarias deal approval
The concession covers 18,507 square kilometres and is immediately to the north of the Pirity Concession where President has recently drilled the Jacaranda prospect

“We are very pleased to have farmed-in to the Hernandarias Concession, which undoubtedly enhances the value of President’s Paraguay interests and the optionality and flexibility for their development,” said Peter Levine, President chairman.

“The discovery by President of a substantial, thick, live source rock in the Pirity Concession, just across the Hernandarias Concession border, is very encouraging for the potential prospectivity of this play. We look forward to working with our partner to progress exploration.”

The Hernandarias Concession has successfully passed through both the Senate and House of Deputies and has been signed into law by the president of Paraguay, Horacio Cartes.

As previously announced, the concession covers 18,507 square kilometres and is immediately to the north of the Pirity Concession where President has recently drilled the Jacaranda prospect.

The completion of the Hernandarias award, together with the Pirity and Demattei Concessions, gives President control and operatorship of the entire Pirity Rift Basin.

The concession is believed to contain the same Paleozoic play system that President has confirmed at Jacaranda, with numerous large rotated fault blocks developed along the northern flank of the Pirity Rift Basin.

To date, 32 large Devonian structural leads and prospects have been identified by President across the entirety of the Paleozoic structural play fairway extending across the three concessions (Pirity, Demattei and Hernandarias), with 17 of these large structures identified in the Hernandarias concession alone.

The discovery of a live petroleum system in the Jacaranda well gives significant encouragement to the promise of the plays in the concession.

Three high graded prospect areas have been identified from recently acquired and historic 2D seismic. The geological structures range in size from 30 square kilometres to 150 square kilometres and are developed at drill depths from 2000 metres downwards.

The relatively shallow depth of burial suggests a majority of prospects will lie in the oil generating window with deeper structures extending down to gas-condensate levels.

As a consequence of the concession passing into law, President has exercised its option under the Conditional Farm-in Agreement (CFA) to farm in up to a maximum of 80 per cent participating interest in the concession and to become its operator.

Pursuant to the terms of the CFA, President has acquired a 40 per cent interest in the concession and will earn a further 40 per cent upon fulfilment of the remaining commitment under a USD 17m work programme, which is defined to include seismic acquisition and one well over the next three years.

Of this USD 17m, USD 1.6m has already been spent during the 2013 seismic programme, with USD 15.4m remaining to be spent over three years.

President’s sole partner in the concession is Hidrocarburos Chaco S.A., a locally owned company, the director and president of which is Dr. Fernando Wiens, an eminent Paraguayan geologist.

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