President Energy has vowed to “vigorously protect its position” if there is not a settlement over claims of losses in excess of $10million.
The ongoing dispute is in regard to service providers at the now compormised Puesto Guardian Concession in Argentina.
President claim that liability lies with the service providers – Weatherford International and H&P Driling Co – for approval of a drill pipe, a lost Bottom Hole Assembly, a failed cement plug, and a loss of casing which led to the halting of the well in 2016.
It is understood that during operations a section of drill pipe went in the hole and fractured leading to the loss of the bottomhole assembly
In a statement President said discussions with the accused parties were “ongoing”, including a mediation process.
But the firm warned it would habe “no choice” but to pursue these claims through legal channels if no satisfactory settlement can be achieved in the near future.
President claim if the well had been completed in accordance with the pre-drill plan, it would have been “very successful”.
It was estimated to have initial flow of over 1,000 barrels of oil per day from a known productive reservoir to which the well was eventually successfully drilled.
Each of the two service providers have themselves made claims against President for unpaid monies.
President rejects these claims.
In addition President’s claims against H&P include the readiness and faults of the relevant Drilling Rig – five days non productive time due to breakdown in the first 21 days of work -, the equipment provided, and the dropping of a drill bit down the hole, fortunately caught by the Blow Out Preventer but writing off the expensive drill bit.
H&P have denied all President’s claims.
Peter Levine, chairman, said: “The result of the Well DP1002 S/T was disappointing. It would in our view have likely to have been an excellent producer. Whilst the undrained oil is still there, it clearly set back the company’s plans materially and the costs thrown away as well as lost production are high numbers.
“I remain hopeful that we can in good faith arrive at a satisfactory settlement of all respective claims with the two relevant service companies with whom we are currently in discussions. It is important that we give ourselves and the other parties this opportunity to resolve matters in a mature and reasonable way.
“If however, such discussions do not bear fruit we will, protecting the interests of our shareholders, without further hesitation or delay, act to vigorously protect the Company’s position and pursue our legitimate and substantial claims whether it be through the Courts or by Arbitration as the case may be.”
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