President completes farm-out to Taiwan state-owned energy firm

President Energy announced the completion of its farm-out of the Pirity concession in Paraguay on Thursday, to the Taiwan state-owned energy company CPC Corporation.

The AIM-traded firm said CPC and itself through its subsidiary companies now had an equal 50-50 interest in the concession, with President continuing as operator under an international joint operating agreement.

Both CPC and President were looking to drill an exploration well at the Delray complex within the concession.

The company said it estimated that the complex had 230 million barrels of unrisked original oil in place, with the location of the exploration well now identified, and planning started for drilling in the first half of 2022, after the end of the rainy season.

It said the well was in a different part of the concession, with “completely different” subsurface features and structure, to the two wells drilled by President in 2014.

While all exploration drilling was “prudently and necessarily” weighted heavily to the downside in terms of success, Delray, with its complex of prospects, was described by the board as the “stand-out exploration location” to be drilled in the concession geologically, as well as in relation to the size of the container.

“We are very pleased to have CPC as a partner in our oil business in Paraguay and look forward to working with them,” said chairman Peter Levine.

“It is obvious that all exploration carries a health warning with material risks to the downside.

“However, the learnings from our previous wells in an entirely different structure within the concession together with subsequent sub-surface studies at Delray points to the fact that the forthcoming exploration well and size of the prize is a compelling well to drill.”

Levine said the Taiwanese authorities had acted “honourably and transparently” throughout discussions, which were intersected and lengthened by the Covid-19 epidemic.

“It is clear CPC have significant in-house expertise and that their involvement in this project has been carefully and thoroughly considered from a technical point of view.

“Their expertise will be mutually beneficial going forward.”

Taiwan had “long-established links” with Paraguay, Peter Levine noted.

“We look forward to playing our part in strengthening those relations further by this newly-established venture and also look forward to possibilities of expanding our relationship with CPC as opportunities may present themselves.”

At 1335 GMT, shares in President Energy were up 12.08% at 2.69p.