REG - Prospex Energy PLC - Operational Update

Prospex EnergyAnnouncement

31/07/2025 07:01

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RNS Number : 3625T  Prospex Energy PLC  31 July 2025

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

 

31 July 2025

 

Prospex Energy plc

("Prospex" or the "Company")

 

Q2-2025 Selva Activity Report and General Operational Update

 

Prospex Energy plc (AIM: PXEN), the AIM quoted investing company focused on
European gas and power projects, provides the following update on operations
at its three main assets, the Viura gas field in northern Spain, the El
Romeral power plant in southern Spain and including an update from the Selva
Malvezzi production concession in northern Italy following the publication by
Po Valley Energy Limited ("PVE") (ASX: PVE) of its Q2‑2025 activity report.

 

Viura

The Operator of the Viura field, HEYCO Energia Iberia S.L. ("HEI" or the
"Operator"), has advised Prospex that it has successfully repaired the leak in
the production tubing of the Viura-1B well, identified in April 2025 (refer to
29 April 2025 announcement).  However, during the newly run completion of the
wellbore, HEI identified an unexpected blockage of residual drilling mud.  A
coil-tubing unit is needed to clear the obstruction, which is currently
preventing the sliding sleeve from being actuated in order to allow gas
production to resume.

 

Although this is a relatively simple process, sourcing an appropriate
coil-tubing unit was not possible in Spain, so procurement necessitated
mobilisation of a unit from Poland, resulting in a delay of bringing the
Viura-1B well back into production.  Resumption of production is expected to
follow shortly after the coil tubing unit is successfully deployed which is
expected to arrive on site mid-August.

 

While the Operator awaits the arrival of the coil tubing unit, operations to
remove the blockage with wire line methods have been ongoing, but this process
is far slower than using the optimum coil tubing equipment.

 

Total natural gas produced from the Viura-1B well from start-up in December
2024 to the end of Q1-2025 was 30.2 MMscm = 1.1 Bcf (which is ≈ 4.4 MMscm =
154 MMscf net to Prospex).

 

The Viura acquisition significantly increased Prospex's proven (2P) reserves
by 6.5 Bcf (0.18 Bcm) net to Prospex.  Gross 2P remaining reserves at the
Viura field is 90 Bcf (2.5 Bcm) and is expected to increase upon further
evaluation of the newly drilled horizons.

 

Prospex owns 7.24% of the Viura field through its ownership of 7.5% of HEI.
Prospex will accrue 14.47% of the production income from the Viura gas field
until payback of its capital investment plus the accrued 10% p.a. interest
thereon.

 

Selva Malvezzi

The operator of the Selva Malvezzi production concession in Italy, Po Valley
Operations Pty Limited ("PVO"), a wholly owned subsidiary of Po Valley Energy
Limited ("PVE") (ASX: PVE), announced its Q2‑2025 activity on 31 July 2025.
 In the report PVO confirmed that it is on target to start field activities
at the Selva Malvezzi Production Concession in October 2025 and steady
production from PM-1 through the quarter.  PVE has a 63% working interest in
the Selva Malvezzi production concession, while Prospex has the remaining 37%
working interest.

 

Gas production and revenues from PM-1 gas facility in the Selva Malvezzi
Production Concession

 

 PM-1 Production Data                         Mar 2025 Quarter  Jun 2025 Quarter
                                              Q1-2025           Q2-2025
 Average gross daily production rate (scm/d)  77,292            79,783
 Quarterly net (37%) production (MMscm)       2,488,031         2,686,307
 Weighted average price (per scm)             €0.50             €0.39
 37% Revenue net to Prospex (€)               €1,235,316        €1,059,843

 

In addition, PVO confirmed the advancement of permitting revisions is underway
to address further studies and recommendations from the technical commission
of Ministry (MASE) Budrio Municipality, Civil Protection and Emilia Romagna
region for the Broader Selva Development Program focussing on  Casale Guida
1d (Selva North), Ronchi 1d (Selva South), Bagnarola 1d(Riccardina), Selva
Malvezzi 1d (East Selva) wells.

 

Highlights

·    Steady gas production from the Podere Maiar-1 well at Selva ("PM 1")
for the quarter averaging 79,783 scm/d continuing to meet predicted levels of
production.

·    Environmental Impact Assessment ("EIA") revisions are underway to
address further studies and recommendations from the technical commission of
Ministry (MASE) Budrio Municipality, Civil Protection and Emilia Romagna
region for the broader Selva Development Program.

·    Field activities are scheduled from October 2025 for the 3D
geophysical survey for the broader Selva Development Program and permitting
processes and landowner agreements continue to advance.

·    Gross quarterly production of 7.260 MMscm of gas (Q1‑2025: 6.724
MMscm), with 2.686 MMscm net to Prospex (Q1‑2025: 2.488 MMscm).

·    Gross revenue for the quarter of €2.864 million (Q1‑2025:
€3.338 million), with €1.059 million net to Prospex (Q1‑2025: €1.235
million)

·    PM-1 continues to sell the gas from Selva Malvezzi to BP Gas
Marketing.

 

Casale Guida 1d, Ronchi 1d, Bagnarola 1d, Selva Malvezzi 1d wells

The Selva Malvezzi Production Concession is the key area of focus for PVO with
the next stages of development at Casale Guida 1d (Selva North), Ronchi 1d
(South Selva), Selva Malvezzi (East Selva) and Bagnarola 1d (Riccardina)
prospects.

 

The drilling programs for the four new drilling projects were submitted to the
UNMIG department of the Italian Ministry of Environment and Energy Security
(MASE) for drilling authorisation in September 2024.  The Environmental
Impact Study (EIA) covering the drilling, development and production phases of
the four wells was filed in December 2024.

 

During May 2025, the EIA technical commission of the Ministry ("MASE")
requested further studies specifically covering assessment of flood risk in
the area given flooding events that occurred in the region in 2023 and 2024.
 In addition, the Budrio Municipality requested a relocation of the Casale
Guida (North Selva) and Ronchi (South Selva) well site due to community
concerns regarding visual and noise impacts on the surrounding area.  The
Selva Malvezzi-1 (East Selva) well site location will also be evaluated
further to mitigate flooding risk concerns raised by the Civil Protection of
Emilia Romagna Region.  PVO is preparing an updated EIA for resubmission
which aligns with the Ministry's observations and recommendations outlined.
The re-location of the surface locations of the two well pads does not impact
the 3D seismic programme.

 

PVO received INTESA from the Region and the final authorisation by the MASE
for the 3D geophysical survey acquisition on the Selva Malvezzi Production
Concession in early April 2025.  Field activities, including the seismic
acquisition, are scheduled for early October 2025 in accordance with guidance
from landowners and relevant Farmer's Associations, ensuring no impact on
their late summer harvest.  Permitting process and landowner agreements
continued to advance in the quarter.

 

El Romeral

The El Romeral power plant near Carmona in southern Spain has not been
producing since 1 July 2025.  As previously reported, a two-week shutdown of
production was expected whilst the plant's main transformer was replaced.
Tarba Energía S.L. ("Tarba") the operator of the plant has been renting a
transformer from a third-party supplier and that company requested that the
transformer be swapped out for a more suitably sized unit at a lower rental
cost.  There have been delays to the arrival of the new transformer unit due
to circumstances beyond the control of either company.  Tarba is receiving
compensation for lost production from the transformer provider at a rate of
€3,000 per day plus other operational costs related to alternative power
provision.  This compensation has now increased to just under €4,000 per
day following the delay on the delivery of the replacement transformer.
Tarba does not have a firm delivery date, the expectation is that replacement
will occur during August.  Whilst this is not an ideal situation, Tarba is
receiving compensation for lost production.

 

Tarba is the company through which Prospex holds its 100% interest in the El
Romeral production concessions and the associated El Romeral gas-to-power
plant situated near Carmona in southern Spain.

 

 

Other investments

Prospex remains committed to its stringent investment criteria; namely its
strategy of investing in onshore natural gas projects across Europe and to
this end, is continuously evaluating new opportunities that have the potential
to deliver long-term value for shareholders.  In Poland, the Company has
applied for licences to own 100% working interest in prospective blocks in
areas which have proven gas production, high potential prospectivity in the
targeted geological horizons and high potential for new reserves to be
unlocked which can be brought onstream within two to three years.  The
licence applications in Poland are with the Ministry of Climate and
Environment for evaluation.  The next step will be the public gazetting of
Prospex's applications and details of the proposed work programmes on the
licences.

 

Mark Routh, Prospex's CEO, commented:

"We are pleased with the consistent production performance achieved at Selva
from the PM-1 well during the quarter, which marks an important milestone for
the project.  In addition, we're encouraged by the progress made and recent
amendments implemented to advance the next stage of development at Selva,
aligning with our broader growth strategy.  I appreciate the interruptions at
some of our other projects are frustrating.  Circumstances beyond our control
have unfortunately collided to impact operations at our investments, but with
our operators we have a clear and proactive plans in place to swiftly and
effectively manage this and reset us on our production and development path.

 

"The value of our portfolio remains strong; we still hold strategic interests
in producing natural gas assets and have significant volumes of Proven,
Contingent and Prospective natural gas resources ready to be unlocked.  I am
confident that the ongoing actions of our operators will ensure the
recommencement of production at Viura and at El Romeral in the near term and
the continuing expansion of Selva.  We are committed to maintaining
transparent communications with our shareholders and will continue to share
further updates on progress from our respective operators as soon as we are in
a position to do so."

 

Investor Meet Company Presentation

Mark Routh, CEO of Prospex Energy and Bill Smith, Chairman of Prospex Energy
will be hosting an investor presentation via the Investor Meet Company
platform on Tuesday 5 August 2025 at 3pm (UK time).  The presentation will
enable existing and prospective investors the opportunity to submit questions
to the board.

 

Investors can register using the link below:

https://www.investormeetcompany.com/prospex-energy-plc/register-investor
(https://www.investormeetcompany.com/prospex-energy-plc/register-investor)

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.

 

* * ENDS * *

 

 

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

 

 Mark Routh                        Prospex Energy PLC            Tel: +44 (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 investment company focussed on high impact
onshore and shallow offshore European opportunities with short timelines to
production.  The Company is building a sizeable oil and gas investment
portfolio and has working interests in three natural gas fields, two in Spain
- the Viura gas field and El Romeral, and one in Italy - the Selva Malvezzi
concession, which are operated by the Company's partners.  Prospex has also
initiated applications for open-acreage exploration permits in Poland.

 

Prospex'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 is committed to rapidly scaling 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.

 

Qualified Person Signoff

In accordance with the AIM note 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 more than 40 years of 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.

Glossary:

Bcf                            Billion standard
cubic feet

Bcm                          Billion standard cubic
metres

Boe                           Barrels of Oil
Equivalent (where 1 MMBoe = 5.8 Bcf)

MMBoe                  Million Barrels of Oil Equivalent

mcf                           Thousand standard
cubic feet

MMscf                    Million standard cubic feet

MMscfd                  Million standard cubic feet per day

MMscm                  Million standard cubic metres

MMscm/d             Million standard cubic metres per day

MWh                       Mega Watt hour

scm                           Standard cubic metres

scm/d                      Standard cubic metres per day

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

 

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