President Energy Surges After Finding Oil in Paraguay Basin

President Energy Plc made Paraguay’s first major oil discovery in the Chaco basin, sending the U.K. explorer’s shares surging by the most in eight years.

The discovery of light oil in the Lapacho well is expected to have commercial potential, with first output slated for next year, the London-based company said in a statement. The well may hold about 200 million barrels of oil equivalent, it said.

President’s stock price climbed 76 percent to 30 pence by the close on London’s Alternative Investment Market on nine times the 3-month average daily volume. That’s the biggest gain since January 2006. It earlier more than doubled to 35 pence.

“President has demonstrated beyond doubt that movable conventional oil does exist in the Paraguayan Chaco,” Chairman Peter Levine said in today’s statement. “This discovery represents a significant milestone.”

The company has been targeting as many as 1 billion barrels of oil and gas in Paraguay, a landlocked nation between Brazil, Argentina and Bolivia. The flat landscape, stable politics and favorable tax regime make it attractive, Levine said in January.

Production from the Lapacho find will supply the domestic market, reducing reliance on imports of oil and gas, Levine said by phone. Corporation tax is 10 percent with royalties set at 10 percent to 14 percent, depending on volumes, he said.

The explorer also plans to deepen its suspended Jacaranda well following testing of Lapacho, it said in the statement. Amerisur Resources Plc, which also has blocks in the country, earlier rose as much as 7 percent to 49.75 pence in London trading and ended unchanged at the close.

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