President Energy issues operational update

President Energy has been forced to temporarily suspend well DP1002 S/T so that the Drilling Rig can be mobilised to the company's neighbour for drilling their well.

This was due to the significant difficulties encountered in running casing in the drilled well, due to a twist-off of a 1000m section which was lost downhole and not practical to recover within the timeframe.

The mobilisation of an appropriate workover rig to fish the casing is now being considered.

As previously reported, there have been significant service quality issues encountered in this well and the challenges presented have been enormous. Issues with the Rig were followed by a fractured drill pipe and then two failed cement plugs through compressive strength issues.

Whilst President continued to drill through all these difficulties and intercepted the target formation, the attempt at casing this well has proved an issue too far at this present time.

Investigations will now commence with all contractors to identify the failings in operations as it is extremely unusual to encounter such a combination of issues in the course of a single well.

On the well we had leading names in the industry, Helmerich & Payne drilling contractors, Schlumberger mud contractors, Weatherford supplying Company Men, directional drilling and casing running and Baker Hughes cementing.

All of the issues were unforeseen even after taking into account the detailed risk analysis and peer review undertaken before drilling commenced.

Nevertheless, as the decision has been taken to temporarily suspend further attempts at completing this well at this time, President is reviewing further action on this well and on the drilling programme.

As well as the fishing operations being considered, the well remains available for a further side track to re-intersect the producing formation. In the interim the Company is therefore releasing the Drilling Rig on to Petro AP, currently operating in the neighbouring block in order, to drill its Pizarro well.