President Petroleum's half-year figures may look disappointing, but that should be tempered by news that the group has also identified reserves at its Louisiana A49 East White Lake that are 50 per cent higher than expected.
Operationally, first-half production dropped by a third to 137 barrels of oil equivalent per day (boepd), which meant revenues were static in the period despite favourable oil prices. Moreover, a $2.53m (£1.61m) operating loss was compounded by a $13m impairment charge relating to the group's unsuccessful drilling efforts at the Kafoury 3 well in Louisiana.
Nevertheless, the company has embarked upon a strategic refocus that's designed to significantly increase production by midway through next year. Accordingly, President completed the acquisition of a 50 per cent stake in the Puesto Guardian concession in Argentina, which has estimated proven and probable (2P) oil reserves of 6.6m barrels. President is about to embark on a five-well drilling programme, too, which it believes will result in a sixfold increase in Argentine production to 1,200 boepd.
Including the new Argentine assets, Evolution estimates a core and risked net asset value of $102m, or 57p a share.
| PRESIDENT PETROLEUM (PPC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 35p | MARKET VALUE: | £40.2m | |
| TOUCH: | 34-36p | 12-MONTH HIGH: | 97p | LOW: 21p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 38¢* | NET CASH: | $23.2m | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 1.77 | -0.91 | -1.90 | nil |
| 2011 | 1.74 | -15.7 | -14.4 | nil |
| % change | -2 | - | - | - |
*Includes intangible assets of $20.3m, or 18¢ a share $1=$1.57 | ||||
