Oil and gas firm President Petroleum delivered a mixed bag in its most recent update on its Louisiana operations, but investors chose to focus on the negative, sending the share price nearly 7% lower.
Due to unforeseen completion issues, the firm decided to plug and abandon the McKerall 1 sidetrack and well EWL 53. It is thought that production flow from the pay zone on McKerall 1 was inhibited due to concrete invasion of the formation and the cost of attempting to rectify this was not economically justifiable.
Technical issues at EWL 53 prevented completing and producing the well from the most productive zone. While the well has been plugged and abandoned, consideration is being given to the drilling of a simple vertical well targeting the main pay zone identified in logs, the firm said.
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In more positive news, President's current monthly revenue from Louisiana has significantly increased to around $550,000. Net operating profit from operations is running at an average of $421,000 per month for the three months to 30 November, a 169% increase from the beginning of the year where Louisiana contributed $156,000 per month in the first quarter. The ratio of oil to gas has shifted from a 50:50 ratio to a ratio of 85% oil and 15% gas.
Chairman Peter Levine said: "Whilst it has to be acknowledged that Louisiana is now very much secondary to President's activities in Argentina, the increase in revenue from Louisiana is pleasing and is paying the company's general and admin costs as Argentina gears up."
The share price fell 6.67% to 42p by 14:04.
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