An independent audit found potential hydrocarbons reserves totaling more than 1 billion barrels of oil equivalent in President Energy's exploration areas in Paraguay's Chaco region, the British company said in a statement.

The auditor, Houston-based RPS, analyzed 2D and 3D seismic studies conducted by President in three zones of the Pirity basin, where the company plans to drill three exploration wells this year, beginning in May.

It found the prospective resources in those areas amounted to 1.089 billion boe, far surpassing an earlier estimate by Paraguay's Public Works Ministry.

The outcome of the audit is "very positive" and demonstrates the potential for opening up "a significant new hydrocarbon province in northwestern Paraguay," President Energy Chairman Peter Levine was quoted as saying in Friday's statement.

A total of 49 wells have been drilled in Paraguay, 43 of them in the Chaco region, according to the Public Works Ministry's hydrocarbons director, Narciso Cubas, but none has yet produced oil or gas in quantities that would be profitable to develop.

President Energy said earlier this month the Paraguayan government granted it an interest of up to 80 percent in an 18,507-sq.-kilometer (7,145-sq.-mile) prospect area in the Chaco region.

The Hernandarias block is of great interest to President because it has the same geological characteristics as adjacent Andean mountain zones in Bolivia and Argentina, where reserves totaling roughly 14 million barrels of oil equivalent have been found, the company said then.

President Energy has invested some $30 million since last year on a seismic study to determine the location for the three wells it plans to drill this year in its Paraguayan operation areas.

It said that on completion of the Hernandarias agreement it would fund the first $17 million of a work program in that "promising" area, including the drilling of an exploratory well during the three-year exploration phase.

President Energy Chairman Peter Levine said in a statement on Jan. 10 the company would carry out the work in partnership with Paraguay's Hidrocarburos Chaco S.A.

The British company has "a significant level of understanding" of the area due to the work it has carried out in its contiguous Pirity and Demattei concessions, Levine said then.

The Chaco is a vast, semi-arid, sparsely populated region that spans the northern half of Paraguay and also parts of Bolivia, Argentina and Brazil.

Paraguay has searched for oil and gas in that region for years in a bid to end its total dependence on imports of crude derivatives and natural gas from Brazil, Argentina and Venezuela. EFE