4 March 2015

PRESIDENT ENERGY PLC

("President" or "the Company")

OPERATIONAL UPDATE

President is pleased to provide an Operational Update on its Paraguay and Argentina Assets. The Company also announced today a Firm and Proposed Placing, the details of which can be found at www.presidentenergyplc.com

HIGHLIGHTS

ARGENTINA

·     Commencement of a multi aspect work programme on the Puesto Guardian Concession to release significant upside

·     Work programme to include a combination of up to 10 well work-overs and some 17 new wells 

·     Farm-out process commencing in March on the large deep Palaeozoic Gas Prospect at the Martinez Del Tineo field in the Puesto Guardian Concession which has independently assessed unrisked recoverable Best Estimate Prospective Resources of 570 Bcf of gas and 14.5 MMbbls of condensate with an NPV10 value of US$1.03 billion calculated at historically lower prices

PARAGUAY

·     President will continue the exploration programme on the very prospective Hernandarias Concession with a 600km 2D seismic acquisition currently targeted to commence in the Spring

·     The Hernandarias seismic survey will focus on three significant leads identified by previous surveys and the  information gained from the Jacaranda and Lapacho wells

·     Though no formal process has begun, President has received encouraging levels of interest in its Paraguay assets from major industry players following discovery of contingent resources at Lapacho and significantly de-risked neighbouring prospects

Peter Levine, Chairman, commented:

"President remains focussed on delivering value for shareholders across the asset portfolio. After a year of significant progress in which we confirmed the prospectivety of our Paraguay acreage, we are now focussed on realising that potential. The seismic survey on the Hernandarias Concession and the productive conversations with prospective partners are the first steps in moving the assets forward. 

With the natural focus on Paraguay in 2014, we see Argentina being an important driver of value in 2015. The planned work programme on the Salta region Puesto Guardian Concession is expected to increase production and demonstrate the upside potential of the field. In addition, the Palaeozoic Gas Prospect offers significant upside which has been reflected by the level of interest received from major industry players who also recognise the potential."

ARGENTINA

Introduction

President announced in December the results of the independent assessment of its oil reserves at the Company's Puesto Guardian Concession, Salta region. The report of Gaffney Cline & Associates confirms the management's assessment that, by way of example, only 8% of the 9 MMbbls of Proved (1P) Oil Reserves are being produced. This suggests there is significant potential for further production from the Proved Reserves as well as from the further 8.4MMbbls of Probable and Possible (2P + 3P) Oil Reserves.

Since acquiring full ownership and operatorship of the Puesto Guardian concession, President has expeditiously carried out reprocessing of seismic and reservoir engineering analysis. As a result of this work, President is now ready to embark on a multi aspect work programme on the Concession including a combination of well work-overs and new wells. In parallel, the Company will in March commence a farm-out process of a potentially significant deep gas prospect.  This prospect was identified by President over three years ago but action can only now be taken with the Company having assumed operatorship and full control.

Phase 1 Programme

The Phase 1 work-over programme of up to 10 shut-in wells with Proved Oil Reserves is expected to commence this Spring. A rig has been sourced that will carry out at least the first part of the initial programme. The projected uplift in production will benefit from the Government's recently announced incentive scheme of an additional US$3 per barrel realisation price for each increased barrel produced over existing production. 

Phase 2 Programme

The Phase 2 programme is currently targeted to commence during the latter part of 2015 subject to adequate project finance being in place. This Phase consists of up to 17 new wells to be drilled targeting Proved Oil Reserves. The well locations have already been identified and once Phase 1 commences and is demonstrating the anticipated increases in production, President will consider in more detail various financing options which it believes may be available at that stage. Current projections are that after between US$25m-US$30m of initial development finance, the Phase 2 new well programme will become self-funding.

Extension of Licence Term

Application is being made under new legislation relating to unconventional hydrocarbons recently enacted to obtain extended licence terms over President's Concessions. Under the new legislation tight reservoirs, such as the carbonates and low permeability sand units in President's Concessions, qualify for these new licence terms.  It is hoped that such applications will be approved before the end of 2015.  If granted the end date of the Puesto Guardian Concession would become 2050.  If the extension is granted, the Company's current Proved, Probable and Possible (3P) Oil Reserves of 17.5 MMBbls, would likely be increased by a further 16.5 MMBbls to approximately 34 MMbbls due to transfer from Contingent Resources into Reserves.

Farm-out Deep Gas Prospect

Preparations are being made to run a farm-out process commencing in March for President's 100% owned large deep Palaeozoic Gas Prospect at the Martinez Del Tineo field in the Puesto Guardian Concession. Gaffney, Cline & Associates had previously assessed that this prospect had unrisked recoverable Best Estimate Prospective Resources as of 31 October 2011 of 570 Bcf of gas and 14.5 MMbbls of condensate with an NPV10 value of US$1.03 billion at historically lower prices of US$4.00/MMBtu gas and US$65.00/Bbl condensate (currently US$7.50/ MMBtu for newly discovered gas and US$70 /Bbl condensate). The work carried out by President subsequent to this report, including a successful outcrop survey close to the prospect and the discovery of the Palaeozoic petroleum system across the border in Paraguay, has given significant impetus to this project with initial interest already being shown by major industry players.

Realisation prices in Argentina are currently US$70 for February and production continues to show a modest operational profit.

Matorras and El Ocultar Concessions

In relation to these two wholly owned and operated Concessions adjacent to President's Puesto Guardian Concession, the Company continues to undertake further geological and geophysical studies to evaluate the prospectivity in the Palaeozoic where similar prospects to the deep gas prospect in the Puesto Guardian may exist.

PARAGUAY

Hernandarias Concession

President will continue with its exploration programme in 2015 building on the success it achieved in 2014. The Company has commissioned a 600km 2D seismic acquisition programme on the Hernandarias Concession targeted to commence in the Spring with results expected approximately two months later.

President's analysis of 2014 drilling results following the successful discovery of contingent resources in the Lapacho well in the Pirity Concession confirms that the Hernandarias Block is very prospective.

The seismic survey is focused on three significant leads over which President has already had the benefit of previous seismic data; namely Boqueron with a possible 160 sq km trap area, Labon with a possible 35 sq km trap area and Tuna with a possible 40 sq km trap area.  All leads are considered on present information to contain the Devonian and Silurian packages identified in the Jacaranda and Lapacho wells, although at shallower depths of between 2,000-3000 m.

Pirity Concession

Having discovered contingent resources at Lapacho and significantly de-risked neighbouring prospects, President is considering next steps in relation to its Pirity Concession.  Discussions with major industry players continue with the levels of incoming interest encouraging.

President's 34 per cent net working interest partner in Pirity is currently in default under the relevant Joint Operating Agreement having failed to pay the agreed and signed off contribution monies to the 2014 drilling campaign.  Whilst President trusts that such default will be remedied and matters resolved, President has informed its partner that it reserves all its rights under the said Agreement including but without limitation the right to require the partner to transfer its interest in Pirity at a discounted value.  The current level of default is approximately US$1.8m which President has paid on behalf of its partner to relevant contractors. As announced on 3 March 2015, the Company's working interest partner in the Pirity Concession has announced that certain court action has allegedly taken place against the Company arising out of this dispute. The Company intends to take all necessary steps to protect its interests in this regard.

Demattei Concession

In light of President's analysis of the results of the 2014 drilling programme, the Company is reviewing the prospectivity and work commitments in this Concession. President currently holds a 10.125% working interest with the right to acquire a further 49.875% subject to payment of certain exploration costs.

Trading & Financial Position

Group production for the 12 months to 31 December 2014 averaged 430 boepd, with Louisiana contributing 225 boepd. Cash of approximately US$1.4m was held as at 31 January 2015 with US$10.4m drawn under the US$15 million IYA Loan facility.

Miles Biggins, Bsc Joint Honours University College London, with 25 years of experience in the oil and gas sector, is a Petroleum Engineer and member of the Society of Petroleum Engineers who meets the criteria of qualified persons under the AIM guidance note for mining and oil and gas companies, has reviewed and approved the technical information contained in this announcement.

Contact:

President Energy PLC

Peter Levine, Chairman +44 (0) 207 016 7950

Miles Biggins, COO +44 (0) 207 016 7950

Ben Wilkinson, Finance Director +44 (0) 207 016 7950

RBC Capital Markets

Jeremy Low, Matthew Coakes, Daniel Conti +44 (0) 207 653 4000

Canaccord Genuity Limited

Henry Fitzgerald-O'Connor +44 (0) 207 523 8000

Bell Pottinger             

Gavin Davis, Henry Lerwill +44 (0) 203 772 2500