President Energy (LON:PPC) said last year’s farm-in agreements in to “world class” concessions in Paraguay are set to prompt a step-change in the company’s fortunes.
The company, which also has assets in Argentina and in Louisiana plus a non-core asset in Australia, is particularly excited about the Paraguayan assets.
“By any measure, our Paraguay assets are world class, covering an extensive area within a proven working oil system, on trend geologically with prolific producing oil fields across the border in Argentina,” said company chairman Peter Levine, in the company’s full year results statement.
“I believe that as the operator of this quality asset, with a potential success case for President of over US$2 billion, combined with a stable political environment and very attractive fiscal terms, we have secured the long awaited opportunity we have been searching for,” Levine said.
The company saw net revenue for 2012 rise by 60% to US$11.3mln from US$7.0mln in 2011, while gross profit jumped 64% to US$3.2mln from US$2.0mln the year before.
The increase in revenue was largely due to a full year’s contribution from Argentina and a 15% increase in output from Louisiana, coupled with a further increased bias toward oil production 88% (2011: 66%).
Though the company is a producer, it is still doing a lot of development work on its assets, and like most companies at this stage of development, it is currently loss making. Loss before tax narrowed significantly, however, to US$6.34mln from US$21.41mln.
The company ended the year with US$17.5mln in cash, up from US$6.3mln at the end of 2011, after the company raised cash in October of last year.
Levine was very upbeat about the company’s prospects, and not just in Paraguay.
“Argentina, without which we would not have the opportunity to invest in Paraguay, has the potential to materially increase production should the current fraccing campaign be successful.
“Louisiana continues to contribute to profit and cash flow, and discussions are ongoing regarding a farm-out of the non-core Australian asset,” he revealed.
“President has never been in such a strong real asset position as it is now with Paraguay, the jewel in the crown of our portfolio, and we look forward with confidence to great success in the future,” Levine said.
The market seemed to share Levine’s optimism, bouncing the shares up 6.7% to 20p in the first half hour of trading.