REG - Prospex Energy PLC - Letter to Shareholders and IMC Investor Event

Prospex EnergyAnnouncement

12/03/2026 07:00

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RNS Number : 3047W  Prospex Energy PLC  12 March 2026

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

 

12 March 2026

 

Prospex Energy plc

("Prospex" or the "Company")

 

Letter to Shareholders and IMC Investor Event

 

Prospex Energy plc (AIM: PXEN), the AIM quoted investment company focused on
European gas and power projects, is pleased to provide a letter to
shareholders from the Company's CEO, Tom Reynolds, which is copied in full
below.

 

The Company is also pleased to announce that Tom Reynolds, together with Bill
Smith, Chairman of Prospex, will provide a live Corporate Presentation via
Investor Meet Company on 26 March 2026 at 15:00 GMT. The presentation is open
to all existing and potential shareholders. Questions can be submitted
pre-event via your Investor Meet Company dashboard up until 25 March 2026 at
09:00 GMT, or at any time during the live presentation. Investors can sign up
to Investor Meet Company for free and add to meet PROSPEX ENERGY PLC via:
https://www.investormeetcompany.com/prospex-energy-plc/register-investor
(https://www.investormeetcompany.com/prospex-energy-plc/register-investor)

 

Investors who already follow PROSPEX ENERGY PLC on the Investor Meet Company
platform will automatically be invited.

 

 

Letter to Shareholders

 

Dear Shareholders,

 

It has now been a month since I took over as CEO of Prospex Energy, and I
would like to start by saying how excited I am for the future of our
Company.  Since joining, I have covered a lot of ground travelling to Spain
and Italy to meet our team, partners and key stakeholders, gaining valuable
insight into our asset portfolio and building a schedule of value adding
options for each asset.

 

Investment Thesis and Process

Prospex is quoted on AIM as an investing company with a focus on energy
assets, particularly natural gas and electricity, in Europe.  My investment
thesis for Prospex is simple and can be described in three parts:

·    Real assets - properties which produce real commodities needed by
society and will increase in value during inflationary periods, outperforming
other investment classes when buying power is eroded

·    Value Accretive - each asset offers clearly defined opportunities to
add value through discovery, derisking and/or development. With access to
appropriate resources, we can add value for our shareholders.

·    Resource sovereignty - as established supply chains for energy
delivery to Europe fail or are disrupted, energy resources within Europe will
be recognised as strategically more valuable and asset prices will be revalued

 

Prospex's purpose is to identify opportunities to deploy shareholder capital,
which match the above criteria and manage the resulting investment to deliver
the target return. The medium-term objective is to establish a portfolio of
cash flowing assets capable of offering distributions and/or funding
investment opportunities as they are identified while limiting new share
offerings.

 

Linked to this objective, the Company launched a Convertible Loan Note
offering in December 2025 with a raise target of £1.6 million. The purpose of
this raise was to fund a series of identified elements of investment capex all
of which serve to protect and/or grow existing asset value. At the most recent
close the Company had received cumulative subscriptions for £1.346 million.
Following my review of the assets over the last month I believe it is in
shareholders' interests to complete that raise and as a result the Company
remains open to subscriptions to reach the original target on the same terms.
However, for any subscriptions received from 12 March 2026 onwards the
conversion right will not be capable of exercise until the first anniversary
of subscription 1  (#_ftn1) .

 

As a result, on our existing assets, my focus is to identify ways to increase
value while minimising the need for new equity issues. This will involve
introducing industry investors at the asset level via a farm-in arrangement or
financial investors alongside Prospex as a co-investor in the companies and
underlying assets we hold an interest in. Going forward, every investment we
consider will be guided by a rigorous assessment of incremental value added
per Prospex share.

 

AIM Investing Company

Prospex is one of the few UK publicly traded investing companies offering
direct exposure to onshore European gas markets; we are a unique investment
proposition. Investing companies invest in assets, financial instruments and
other companies relying on distributions and/or exits to deliver returns. This
provides Prospex with very broad flexibility in terms of investment
structures, who it can partner with and the targets it invests in which is a
significant advantage compared to other companies.

 

Macro

Since the onset of the Ukraine conflict, supply of natural gas to Europe has
pivoted from Russian pipeline gas to Liquefied Natural Gas (LNG) import. The
recent closure of the Qatari LNG export terminal demonstrates the fragility
created by this dependency with TTF prices rising c. 75%. The need for secure
domestic energy in Europe is clear, and in my opinion deliverable energy
resources within Europe will increase in value. In addition, domestic
production of natural gas is much less carbon intensive than the life cycle
emissions of LNG.

 

In the short term, higher prices means that Prospex gas production at Selva
Malvezzi in Northern Italy and the Viura Gas Field in Northern Spain will
generate higher levels of cash flow. In the medium term, the potential value
from discovery, de-risking and development options across the entire portfolio
also increases as a result.

 

Producing Assets

Shareholders now own three producing, revenue generating investments - Selva
Malvezzi in Northern Italy, the Viura Gas Field in Northern Spain and El
Romeral in Southern Spain. Whilst there have been some operational issues over
the past year, I expect to be in a position to set out a definitive step plan
for each asset at the upcoming IMC.  I have included a high level summary of
the status for each producing project below:

 

·    At Viura, our partner and operator HEYCO Energy Iberia, is executing
a series of production trials under a range of parameters with the objective
of populating a dynamic reservoir model which will inform key decisions
underpinning future drilling decisions.

 

·    As Selva Malvezzi, I met our partner Po Valley Energy, which plans to
execute a value adding programme of work with the objective of characterising
the exploration upside on the licence and producing an updated Competent
Persons Report in H2 2026 while we apply for the approvals required to drill a
series of exploration wells.

 

·    At El Romeral, we are waiting for permits to drill a five well
programme. Production was able to resume in early February following the
installation of a rental transformer and we have been running production
trials to optimise generation activity with the objective of maximising
revenue. Regarding the five well programme, we have received early expressions
of interest from prospective farm-in investors and look forward to updating
shareholders at the appropriate time if these discussions develop into
actionable proposals.

 

Exploration Assets

Through our ownership in Tarba Energia, which owns the El Romeral licence, we
have an interest in two petroleum exploration licences in Southern Spain, the
Tesorillo and Ruedalabola Permits. A well drilled on Tesorillo delivered gas
to surface in the 1950s and although considered to have high potential,
significant further work will be required to characterise and test the licence
potential.  These licences are currently suspended and Prospex has engaged
with the relevant governmental departments since 2021 seeking permission to
carry out further investigative work. This engagement will continue but there
is no guarantee that regulators will allow activity to re-commence.

 

Offering a more direct path to near term exploration activity, licence
applications are progressing for two areas onshore in southern Poland - San
and Dunajec. These applications represent a new country entry, adding a third
European jurisdiction to our portfolio. Poland benefits from a highly
prospective petroleum system, very supportive regulatory framework and active
network of service providers allowing rapid progress to be made on any
licences awarded.

 

Strong Growth Trajectory

Having conducted a thorough assessment of our portfolio since joining I firmly
believe that we are ideally positioned for growth at a period of surging
market demand. Our gas reserves are significant, especially given the size of
our company, we have a stable production base, and are actively growing, with
a well-defined and robust pipeline that includes several new wells and
European expansion.

 

I feel privileged to have the opportunity to steer Prospex through the next
period of its development. We are entering a new phase of exciting activity,
and I am committed to pursuing our growth objectives with a focus on per share
value. I give my sincere thanks for all the support shown so far and I look
forward to speaking more fully at the upcoming investor call on Thursday 26
March 2026 at 15:00 GMT.

 

In moving forward, keeping our shareholders informed will be critical to our
success and this is my commitment to you; Prospex will aim to host four events
per year - approximately one per quarter - where management will update
shareholders on our plans and developments. I hope that two events will allow
us to meet in person, including the Annual General Meeting.

 

Kind regards,

Tom Reynolds

CEO

 

** ENDS * *

 

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

 

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

Rory Murphy
 Andrew Monk (Corporate Broking)   VSA Capital Limited           Tel: +44 (0) 20 3005 5000

Andrew Raca (Corporate Finance)
 Neil Passmore                     Hannam & Partners             Tel: +44 (0) 20 7907 8500

 Leif Powis
 Ana Ribeiro / Charlotte Page      St Brides Partners Limited    Tel: +44 (0) 20 7236 1177

 

Notes

Prospex Energy PLC is an AIM quoted investing 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.

 1  (#_ftnref1) This does not affect the rights of any subscribers who have
subscribed for Convertible Loan Notes prior to 12 March 2026.

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