President pleased with waterflooding at Puesto Flores

Exploration and production company President Energy updated the market on its activities in the Rio Negro province in Argentina on Wednesday, reporting that the pilot waterflooding project in the Puesto Flores field was showing “concrete signs of success”.

The AIM-traded firm said that if those results were promulgated to other parts of the mature Puesto Flores field, it would both increase production in the short-to-medium term, and extend out decline curves, thus prolonging the field’s life and have a beneficial effect on the extent of recoverable reserves.

It described waterflooding as a “recognised form” of oil recovery in which energy to sweep or move either residual oil or greater oil from the reservoir rock was supplied from the surface by way of water injection, with the induced pressure of additional water.

Widely used in Argentina, it had never been tried in the Puesto Flores field.

Waterflooding, if successful, would enable greater levels of oil in mature fields to be produced which otherwise would be left in the ground.

By doing so, the company said it produced more of the proven and probable oil reserves, and would mitigate the “inevitable effect” of natural decline in production from existing wells by softening the decline curve.

The pilot project was initiated in one fault block within the Puesto Flores field using well PFO-26 to inject produced water that otherwise would have been disposed of in a dedicated disposal well.

President said the objective of the project was to identify whether there was any pressure response from wells in the same structure.

The company said it had now identified a “potentially significant” positive incremental response from two wells, with the first from PFO-14 lying 700 metres away from PFO-26, and the other from PFO-10 which was 386 metres away.

After having considered and discounted other potential reasons for the production increases from the two wells, the company said that after “careful analysis”, it considered that they were a direct result of the waterflooding.

The results so far showed an aggregate increase from the two wells of about 15 cubic metres of oil per day, or around 95 barrels per day, representing a 50% increase in oil production from PFO-14 and 25% from PFO-10.

President said the pilot programme would continue, and consideration would shortly be given as to the possibilities and practicalities of rolling it out on an extended basis with other old non-producing wells being used as injectors.

“The results of the pilot waterflood programme are encouraging,” said chairman Peter Levine.

“With such evidence of success in one structure with two producing wells, whist monitoring how the production curves now progress, consideration is now being given to rolling out over time a waterflooding scheme where sub-surface conditions are suitable both within the Puesto Flores field and other of our fields in Rio Negro.”

Levine said that as in the pilot programme, it was not the equivalent of an overnight sensation and was one that required “continued patience and diligence” to develop a “serious and impactful” field scheme.

“Nevertheless, this should not detract from the potentially significant implications from the clear results so far.”

At 1201 BST, shares in President Energy were up 11.79% at 2.35p.