PPC.L Regulatory News (PPC)

2 May 2013

PRESIDENT ENERGY PLC

("President", "the Company", or "the Group")

Results for the year ended 31 December 2012

President (AIM: PPC), the oil and gas exploration and production company focused on Paraguay with producing assets in Argentina and Louisiana, and exploration assets in South Australia, announces its full year audited results for the year ended 31 December 2012.

Corporate Highlights

·; Significant expansion of the Company with entry into Paraguay by way of a farm-in, as operator, to world class exploration assets, which provide material upside leverage in the near to medium term, with operations already underway

·; Total hydrocarbon production up 44% year-on-year

·; Net risked Prospective Resources increased by 109.3 mmboe, as a result of the Paraguay acquisition and independent technical review during 2012, with risked NPV10 success case value net to President in excess of US$2 billion (management estimates)

·; Increased exploration upside complemented by existing 2P reserves of 6.9 mmboe

·; Fraccing campaign underway in Argentina, and two new 100% owned and operated concessions added to the portfolio through an open tender

·; Louisiana continues to provide solid profits and cash flow

·; Non-core Australian assets subject to current farm-out discussions

·; Net revenue for the year increased by 60% to US$11.3 million (2011: US$7.0 million) while gross profit increased by 64% to US$3.2 million (2011: US$2.0 million)

·; Cash balances of US$17.5 million at the year end with nil gearing and US$15 million of unused loan facilities

·; Board strengthened by appointments of Dr. Richard Hubbard (Chief Operating Officer), Miles Biggins (Commercial Director), and Dr. David Jenkins (Non-Executive Deputy Chairman)

Operations

Paraguay

·; Significant progress since completion of the acquisition only six months ago

·; Extensive 3D seismic acquisition has commenced with results due Q4 2013, with a new CPR to follow

·; Planning commenced for Q2 2014 drilling campaign

·; DeGolyer and McNaughton have independently assessed net mean risked recoverable Prospective Resources of 94 mmbbls of oil, underpinning a management estimated in excess of US$2 billion success case value

·; Development of in country team and resources to execute operational plans

·; Building strong relations with Paraguayan authorities, service providers, and other stakeholders

Argentina

·; Oil production and realised prices have been stable

·; Fraccing campaign commenced aiming at materially increasing near term production, and migration of resource to reserves

·; Re-mapping exercise demonstrates significant undrilled highs with a further 43 mmbbls of gross oil in place identified

·; Two new concessions won at auction, with President having a 100% working interest as operator

·; These concessions protect the Martinez Del Tineo gas and condensate prospect that has been assessed by Gaffney Cline & Associates as worth, on a risked NPV10 basis, US$134 million net to President (US$ 514 million unrisked) on the basis of a gas price of US$4/mcf, (current gas pricing in Argentina for new discoveries is US$7.5/mcf)

Louisiana

·; Production has increased and continues at a three year record level of approximately 250 boepd

·; Oil ratio in Louisiana up from 66% in 2011 to 88%, with premium to WTI still being obtained

·; Average realised oil price during the year of US$106 per barrel

·; New well 54 at EWL producing successfully giving net to President circa 50 boepd

Financial Highlights

·; Net revenue for the year increased by 60% to US$11.3 million (2011: US$7.0 million)

·; Gross profit increased by 64% to US$3.2 million (2011: US$2.0 million)

·; Placing in September linked to the Paraguay acquisition raised US$45 million (US$28 million new net cash to Company)

·; Solid current financial position with year-end cash balance of US$17.5 million after initial payments for Paraguay acquisition, loan repayments and working capital

·; Current nil gearing with US$15 million of unused loan facilities in place

Outlook

·; Exciting prospects in Paraguay with a rapidly moving programme and potential for exponential growth in shareholder value during 2013 and 2014 with a success case target of over US$2 billion net to President

·; Following interpretation of the 3D seismic, Paraguay drilling campaign to commence in Q2 2014

·; Potential to materially increase production in Argentina from current fraccing campaign

·; Louisiana is a continued source of solid profits and cash flow

Commenting on today's announcement, Peter Levine, Chairman said:

"I would first like to thank our loyal shareholders who have supported us through difficult times where we did not achieve the growth in shareholder value I had expected. In my view, the disappointing share price performance clearly does not reflect President's potential.

Through the Paraguay acquisition, we have now made the step change that we were looking for. By any measure, our Paraguay assets are world class, covering an extensive area within a proven working oil system, on trend geologically with prolific producing oil fields across the border in Argentina.

I believe that as the operator of this quality asset, with a potential success case for President of over US$2 billion, combined with a stable political environment and very attractive fiscal terms, we have secured the long awaited opportunity we have been searching for.

With our vigorous programme in Paraguay and on-going work in Argentina we look forward with confidence to rewarding our patient and loyal shareholders with success in the future."

Contact:

President Energy PLC

John Hamilton, CEO +44 (0) 207 016 7950

Ben Wilkinson, Finance Director +44 (0) 207 016 7950

RBC Capital Markets

Jeremy Low, Matthew Coakes, Daniel Conti +44 (0) 207 653 4000

Jefferies Hoare Govett

Simon Hardy, Max Jones +44 (0) 207 029 8316

Pelham Bell Pottinger +44 (0) 207 861 3232

Mark Antelme, Henry Lerwill

The following financial statements are extracted from the Company's audited consolidated accounts for the year ended 31 December 2012. These accounts will be included in full in the Company's Annual Report which will be posted to shareholders in May 2012 and will be made available on the Company's website www.presidentenergyplc.com at the same time.

CHAIRMAN'S STATEMENT

Summary

The year 2012 was rightly dominated by our acquisition, by way of farm-in, of two concessions in Paraguay covering some 16,000 km2. The directors are confident that this world class exploration asset will provide the platform for significant growth in the future. Argentina and Louisiana continue to provide a core foundation of reserves and production for the Company, with the potential for further production growth, particularly in Argentina.

Paraguay

In September, we announced an agreement to farm-in to two contiguous blocks in the Pirity sub Basin of Paraguay. This was a significant transaction for the Company in a relatively untapped region of the world. The transaction is a strategic fit for President, as the petroleum system is well known to the Company through its operations across the border in Argentina. The transaction builds critical mass in the region while providing entry into a new country, and utilises President's expanding technical and operational team. DeGolyer and McNaughton have independently assessed net mean risked recoverable Prospective Resources of 94 mmbbls of oil, which management estimates to underpin a greater than US$2 billion success case value to President.

We have made significant progress in Paraguay since the completion of the transaction six months ago. Seismic operations have commenced, with Global Geophysical Inc. ("Global") contracted to acquire approximately 780 km2 of 3D and 100 km of 2D, with results due in Q4 2013. Global have demonstrated confidence in President and the prospect areas by agreeing a success based fee schedule whereby Global will deliver their full range of services at cost in return for President and its partners paying a discovery success fee to be paid from production over time. Considerable effort has been made to building up an in-country infrastructure, and we have now commenced planning for the Q2 2014 drilling programme.

Argentina

Against a subdued market backdrop, the period was busy for President in Argentina. Three new wells were drilled, 3D seismic was reprocessed and our acreage position increased. The DP-1001 well was brought on-stream, while the PEE-1001 well and DP-1002 well are part of a future frac, sidetrack and work over programme. Average daily production was stable against the previous year and oil prices held firm at approximately US$70 per barrel.

We recently announced the results of a comprehensive independent reprocessing and remapping exercise of the 2006 3D seismic data on two of the five fields within the Puesto Guardian Concession. The work shows significant undrilled highs within the proven field areas and an increase in stock tank oil initially in place ("STOIIP") in the Pozo Escondido field of 215% from 20 mmbbls to 63 mmbbls. These results, when combined with the low oil recovery to date, 1% and 11% for Pozo Escondido and Dos Puntitas respectively, confirm management's view of further development potential in these fields through fracs, sidetracks and further drilling.

After the delays caused by bad weather and upgrading of equipment, we also commenced an initial three well fraccing campaign targeting carbonate reservoirs in the Dos Puntitas and Pozo Escondido fields. If these are successful, it provides encouragement for a further sequence of fracs to target the large oil in place in this reservoir.

Gaffney Cline & Associates ("Gaffney Cline") reviewed an exploration prospect in the Martinez del Tineo field. The prospect is a gas and condensate target analogous to prolific fields near the Bolivian border. Gaffney Cline assigned a gross mean unrisked Prospective Resource estimate of 570 bcf and 14.5 million barrels of condensate. The economics of this prospect have been made materially more attractive now that the gas price in Argentina has increased for new discoveries from US$4/mcf (on which the Gaffney Cline report was based) to US$7.5/mcf.

Based on this prospect, President applied for three open exploration concessions contiguous to Puesto Guardian. We were awarded two blocks as operator, with three years to study the prospectivity on the Concessions on which only sparse data are currently available.

Louisiana

Operations in East White Lake and East Lake Verret continue to provide President with solid cash flow. Production is up 15% from the previous period at 183 boepd for the year and post year-end it continues to rise (currently producing approximately 250 boepd) following a successful new well and recompletions. Oil prices have remained strong, and the bias towards oil production continues at 88% (2011: 66%). New exploration leads have also been identified.

Australia

As the Australian assets are not core to the central strategy of the Company, work on these assets has been low level, and has concentrated on finding industry participation in further activity on PEL 82. These discussions are ongoing.

The USA reserve reduction relates to probable reserves at East Lake Verret. Management has taken the decision not to proceed with the development of wells for which probable reserves were previously recognised.

Corporate

We are delighted to have welcomed Miles Biggins as Commercial Director and Dr Richard Hubbard as Chief Operating Officer to the Board of Directors; each brings a wealth of relevant experience to the team. Dr. David Jenkins also joined the board as Non-Executive Deputy Chairman, bringing 50 years of experience with BP, BHP Billiton, Riverstone and others.

Two share placements were undertaken during the year to fund the Paraguayan farm-in, work programmes in both Paraguay and Argentina, and general working capital. The Company also agreed a US$15 million working capital loan facility.

Financial Review

Revenue for the year increased to US$11.3 million (2011: US$7.0 million) due to increased production in Argentina as a consequence of the development drilling undertaken in Q4 2011/Q1 2012, a full year of production contribution from Argentina (50% interest acquired in July 2011) and a 15% increase in production from Louisiana coupled with a further increased bias toward oil production 88% (2011: 66%). Cost of sales has increased to US$8.1 million (2011: US$5.1 million), reflecting a full year of costs in Argentina. Gross profit for the year stood at US$3.2 million (2011: US$2.0 million).

Administrative expenses increased to US$8.5 million (2011: US$8.0 million) due to a full year of Argentina costs, the continued strengthening of the Company's board and recruitment of key staff to deliver operations. The main components of administrative expenses were staff costs of US$3.6 million, initial set up costs in Paraguay of US$0.6 million, and share based payments of US$0.6 million.

Year-end cash balances of US$17.5 million (2011: US$6.3 million) reflect new cash raised in October of US$28 million less Paraguay back costs associated with the deal. The Group's non-current assets have increased to US$75.7 million (2011: US$54.8 million). Loan finance from IYA (a related party as further detailed in the Annual Report) was repaid in full in October 2012 and the Group had no debt as at the year end, with a new US$15 million 24 month facility from IYA remaining undrawn.

Outlook

President has exciting prospects in Paraguay with the very significant potential for exponential growth in shareholder value during 2013 and 2014. The independent report by DeGolyer and McNaughton underpins management's estimate of a success case in Paraguay of over US$2 billion of value to President.

Argentina, without which we would not have the opportunity to invest in Paraguay, has the potential to materially increase production should the current fraccing campaign be successful.

Louisiana continues to contribute to profit and cash flow, and discussions are ongoing regarding a farm-out of the non-core Australian asset.

President has never been in such a strong real asset position as it is now with Paraguay, the jewel in the crown of our portfolio, and we look forward with confidence to great success in the future.

Finally, I want to express my gratitude to my colleagues, management and staff. Their efforts are exemplified by the professionalism and the expeditious way President has moved in only six months in Paraguay from acquisition to the start of an extensive seismic acquisition campaign. It is further appropriate to extend my sincere appreciation to our loyal and patient shareholders and assure them that we remain fully focused on delivering them the rewards that their patience and loyalty deserve.

Peter Levine

Chairman

2 May 2013

Notes

1. Accounting policies and basis of preparation

The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 31 December 2012 or 2011 but is derived from the 2012 accounts.

A copy of the statutory accounts for the year to 31 December 2011 has been delivered to the Registrar of Companies, and is also available on the Company's web site. Statutory accounts for 2012 will be delivered in due course. The auditor has reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for 2011 or 2012.

Whilst the financial statements from which this preliminary announcement is derived have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use in the EU, this announcement does not itself contain sufficient information to comply with IFRS. The Annual Report, containing full financial statements that comply with IFRS, will be sent out to shareholders in May 2012.

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Therefore, in the preparation of the 2012 financial statements, they continue to adopt the going concern basis.

At 31 December 2012, 8,388,023 (2011 3,425,269) weighted potential Ordinary Shares in the Company which underlie the Company's share option and share warrant awards, and which may dilute earnings per share in the future, have not been included in the calculation of diluted earnings per share because they are anti-dilutive for the years to 31 December 2011 and 2012.

6. Segmental analysis

Revenue for the year increased to US$11.3 million (2011: US$7.0 million) due to increased production in Argentina as a consequence of the development drilling undertaken in Q4 2011/Q1 2012, a full year of production contribution from Argentina (50% interest acquired in July 2011) and a 15% increase in production from Louisiana coupled with increased oil production representing 88% (2011: 66%). Cost of sales has increased to US$8.1 million (2011: US$5.1 million), reflecting a full year of costs in Argentina. Well operating costs in Argentina reflect a full year of costs versus

2011 but also demonstrate improvements in 2H 2012. Well operating costs at interim 2012 were US$3.1 million (of a total Group number of US$3.7 million) and included one off unsuccessful work-over costs in the first half of 2012.

7. Going concern

The Group's cash position at the year-end is US$17.5 million. A loan facility of up to US$15.0 million has been made available to the Group, which is currently undrawn. The Group's funding position is also reliant on production revenues from existing producing wells and wells that are in the process of being tested and developed for commercial production. The principal uncertainty in the Group's forecasts and projections relates to the level of future production and consequent revenues.

The Directors believe that the Group will be able to operate within its existing committed funding and to meet all commitments as they fall due. The Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

8. Subsequent events

In March 2013, the successful drilling of the A-54 well on the East White Lake field, Louisiana, has provided additional production of approximately 50 bopd net to President, taking production from Louisiana to a 3 year high of some 250 boepd.

Also in March 2013, the Company announced it had completed a comprehensive seismic reprocessing and remapping exercise of the existing 3D data on two of the five fields in the Puesto Guardian Concession in Argentina. The work has identified significant undrilled highs within the proved field area and confirmed management's view of the further development potential of the fields. STOIIP increased from 20mmb to 63mmb in the Pozo Escondido field and validated the existing 15mmb STOIIP at the Dos Puntitas field.

At the time of this report, in Argentina a three well work-over and frac campaign has begun primarily to target unproduced oil in the carbonates on the Pozo Escondido and Dos Puntitas fields. These operations are expected to provide a welcome uplift to Argentine production and will be followed by further development planning to unlock the value of the Puesto Guardian asset.

In Paraguay, seismic acquisition operations have begun. Approximately 780 sq kms of 3D seismic and 100 kms of 2D seismic are to be acquired over high-graded areas of the Pirity and Demattei Concessions respectively. The Company is targeting an initial three well drilling campaign for 2014.