President Energy, the energy company with a diverse portfolio of production and exploration assets focused primarily in Argentina, provides an update on oil prices in Argentina.

The Company's last announcement on 12 March 2020 referred to media reports of the prospect of the Government setting an internal fixed price for the domestic oil market in Argentina in order to protect the strategic domestic hydrocarbon industry.

On 18/19 May 2020, a Government Decree was signed and published inter alia setting a fixed reference price for Argentina standard Medanito crude at US$45 per barrel subject to local usual quality discounts. President's core production from its Neuquen basin assets fall under the Medanito category. The Decree has been issued against the backdrop of a phased and orderly exit from the lockdown in the country with many industries now back at work in many provinces, road traffic materially increasing and demand for hydrocarbons showing increases. 

The Decree stipulated other terms and conditions related to the fixed price including but not limited to:

1. the immediate coming into effect of such legislation;
2. the term of the relevant price provisions being until either 31 December 2020 or such time as ICE Brent price exceeds a level of US$45 per barrel for more than 10 consecutive days in any period, whichever time shall first occur. In any event the price will be subject to periodic review;
3. provisions supporting, subject to demand levels of activity on the part of producers;
4. subject to demand mandatory requirements for refiners to pay producers on such fixed price basis and prohibiting refiners from buying crude abroad instead of domestically produced feedstock;
5. anti-monopoly and restrictive practices provisions

The actions by the Government of Argentina to protect and promote the internal hydrocarbon industry as a whole is welcomed. Out of an abundance of caution, the practical implications of the Decree, its implementation and effect upon President is being considered by the Company and further comment will be made once the effect on the ground becomes clear and demonstrative.

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