REG - Prospex Energy PLC - Italy: Selva Field Development - Q3 2023 Update

Prospex EnergyAnnouncement

01/11/2023 07:00

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RNS Number : 9131R  Prospex Energy PLC  01 November 2023

Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and Gas

 

1 November 2023

 

Prospex Energy PLC

('Prospex' or the 'Company')

 

Italy: Selva Field Development

 

Q3 2023 Operational Update

 

More than 5.6 million scm gas produced and sold to BP Gas Marketing

 

Prospex Energy PLC (AIM: PXEN), the AIM quoted investment company focused on
European gas and power projects, is pleased to provide an Operational Update
including production rates and income for the three months ended 30 September
2023 from the Podere Maiar-1 ("PM-1") gas facility of the Selva Field which is
operated by Po Valley Operations Pty Limited ("PVO"), a wholly owned
subsidiary of Po Valley Energy Limited ("Po Valley Energy") (ASX: PVE).

 

Po Valley Energy has a 63% working interest of the Selva Malvezzi production
concession, while Prospex has the remaining 37% working interest.

 

Operational and Financial Overview

·    PM-1 commenced gas production on 4 July 2023.

·    Following a four-week ramp-up and commissioning programme the PM-1
well flowed at daily production levels of c.72,000 standard cubic metres per
day (scm/d) during the initial testing period, which is expected to be
concluded by the end of December 2023.

·    October production is temporarily running at c.62,000 scm/d as part
of the testing programme which is expected to increase in November.

·    Longer term production rates from the well are targeting at least
80,000 scm/d.

·    All the PM-1 gas is sold to BP Gas Marketing under the 18-month
supply agreement (announced on 14 February 2023) at a supply price linked to
Italy's "Heren PSV day ahead mid" price assessment which tracks the publicly
available Dutch TTF spot prices( 1 ).

·    Gas prices have increased recently from €0.32/scm (€30.3/MWhr) to
a current spot price of €0.53/scm (€50.3/MWhr).  The forward curve TTF
gas prices are currently above €50/MWhr through to the end of Q1 2025( 1 ).

·    Gross quarterly production from the Selva Malvezzi production
concession was 5,658,117 scm (2,093,503 scm net to PXEN) and gross revenue for
the quarter was €1,937,072 (€716,717 net to PXEN).

·    Further upside potential at the Selva Malvezzi Production Concession
is advancing at pace with the operator progressing agreements with local
landowners and the permitting process with the regulatory authorities to
deliver the drilling programmes at Selva North, South and East.

 

Mark Routh, Prospex's CEO, commented:

"Delivering the stable production rates and moreover securing the substantial
cash flows from the brand-new gas plant at the PM-1 gas facility is a
significant achievement by the operator of our Selva Malvezzi production
concession, Po Valley Energy.  This places Prospex in the enviable position
of having stable production and income from two onshore natural gas fields one
in Spain and one in Italy.

"Prospex is working together with the Po Valley team and using this production
income to progress the necessary activities to secure the development drilling
programmes for the other structures on the production concession in order to
convert those contingent and prospective resources into proved, developed and
producing reserves in the near term.

"We have delivered a key step in the Company's strategy to become a
diversified energy producer with multiple producing assets principally in
lower risk, onshore European markets with ready access to infrastructure.  We
are  proud to be supporting the European Energy sector with producing assets
in both Italy and Spain and look forward to updating shareholders on our
continued progress."

 

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR") and is disclosed
in accordance with the Company's obligations under Article 17 of MAR.

 

* * ENDS * *

 

 

For further information visit www.prospex.energy (http://www.prospex.energy)
or contact the following:

 

 

 Mark Routh                                    Prospex Energy PLC            Tel: +44 (0) 20 7236 1177
 Ritchie Balmer                                Strand Hanson Limited         Tel: +44 (0) 20 7409 3494

Rory Murphy
 Jerry Keen                                    Fox-Davies Capital Limited    Tel: +44 (0) 20 3884 7447
 Andrew Monk (Corporate Broking)               VSA Capital Limited           Tel: +44 (0) 20 3005 5000

Andrew Raca/Alex Cabral (Corporate Finance)
 Ana Ribeiro / Susie Geliher                   St Brides Partners Limited    Tel: +44 (0) 20 7236 1177

 

Notes

Prospex Energy PLC is an AIM quoted investment company focussed on high impact
onshore and shallow offshore European opportunities with short timelines to
production.  The Company's strategy is to acquire undervalued projects with
multiple, tangible value trigger points that can be realised within 12 months
of acquisition and then applying low-cost re-evaluation techniques to identify
and de-risk prospects.  The Company will rapidly scale up gas production in
the short term to generate internal revenues that can then be deployed to
develop the asset base and increase production further.

 

About Selva:

 

The Podere Gallina Licence is in the Po Valley region of northern Italy.  The
licence contains the Selva gas-field as well as exciting exploration and
development opportunities.  The Podere Maiar-1 well at Selva was completed in
December 2017 and successfully found a commercial gas accumulation up-dip of
the previous wells on the Selva field.  The Company has a 37% working
interest in the Podere Gallina licence held via Prospex's two wholly owned
subsidiaries, PXOG Marshall Ltd (17% of the Licence) and UOG Italia Srl (20%
of the Licence).

The Podere Gallina Licence holds independently verified 2P gross proven
reserves of 13.4 Bcf (5.0 Bcf net to Prospex at 37% WI) in Selva, gross
Contingent 2C Resources of 14.1 Bcf (5.2 Bcf net) and a further 88.2 Bcf of
gross Best Estimate Prospective Resources (un-risked) (32.6 Bcf net).( 2 )

An independent Competent Person's Report of the Podere Gallina Licence was
prepared by CGG Services (UK) Limited in July 2022 on behalf of the joint
venture.( 2 ) It attributed a total of 379 MMscm (13.4 Bcf) gross 2P reserves
for the Selva redevelopment project.

References:

 1  Source: ICE website forward curve gas prices for the TTF.
https://www.ice.com/products/27996665/Dutch-TTF-Gas-Futures/data?marketId=5360399
(https://www.ice.com/products/27996665/Dutch-TTF-Gas-Futures/data?marketId=5360399)

 2  Source: "Competent Person's Report Podere Gallina Licence, Italy" prepared
by CGG Services (UK) Limited in July 2022 : https://bit.ly/44VF02A
(https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fbit.ly%2F44VF02A&data=05%7C01%7Cana%40stbridespartners.co.uk%7Ce27db61066ba4edeed3f08db94f7d5a5%7C48b7268319d344289c4b73cf144d89ed%7C1%7C0%7C638267564391602202%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=glSh9awfUUAreAZfLeRjoo%2FtRCIsIW2TSML5zO%2FUkew%3D&reserved=0)

 

Glossary:

scm                        Standard cubic metres

scm/d                   Standard cubic metres per day

MMscm               Million standard cubic metres

Bcf                          Billion standard cubic
feet

MMscfd               million standard cubic feet per day

MWh                     Mega Watt hour

TTF                         The 'Title Transfer
Facility' - a virtual trading point for natural gas in the Netherlands.

 

Qualified Person Signoff

In accordance with the AIM notice for Mining and Oil and Gas Companies, the
Company discloses that Mark Routh, the CEO and a director of Prospex Energy
plc has reviewed the technical information contained herein.  Mark Routh has
an MSc in Petroleum Engineering and has been a member of the Society of
Petroleum Engineers since 1985.  He has over 40 years operating experience in
the upstream oil and gas industry.  Mark Routh consents to the inclusion of
the information in the form and context in which it appears.

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