Paraguay oil explorer President Energy (PPC:AIM) is racing ahead as its Lapacho well appears to have uncovered a commercial oil find in the country. The shares are up 60% since the discovery was announced (20 Oct). Further updates on this drilling effort, a likely flow-test and further work on the previous Jacaranda well could sustain the momentum.
This latest result is significant as the Latin American state currently has no oil reserves and the company has a substantial acreage position. Interestingly it is also yet to reach its primary target with Lapacho. RBC Capital Markets comments: ‘The discovery is in addition to the original 30 million barrel condensate and one trillion cubic feet resource estimate of the Lapacho well.
The well is now drilling ahead to the original target, the 400 metre thick Santa Rosa formation; TD (target depth) still expected in mid-November.’
CanaccordGenuity adds: ‘The Lapacho light oil discovery is an important step towards a commercial find in the Chaco Basin of Paraguay. All the ingredients for liquid hydrocarbon production now appear to be present in the basin but it is still early in the process.’