REG - Prospex Energy PLC - Warrego Energy interests in Spanish assets

Prospex EnergyAnnouncement

11/11/2022 07:16

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RNS Number : 0597G  Prospex Energy PLC  11 November 2022

 

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

 

11 November 2022

 

Prospex Energy PLC

('Prospex' or the 'Company')

 

Potential sale of Warrego Energy interests in Spanish assets

 

Prospex Energy PLC, the AIM-quoted investment company focused on European gas
and power projects, notes the announcements made on the ASX by Warrego Energy
Ltd ("Warrego") (ASX:WGO) on 10 November 2022, regarding a potential sale of
its shares in Tarba Energía S.L. ("Tarba") as a result of a proposed merger
of Warrego with Strike Energy Ltd ("Strike").  Warrego is a co-owner of Tarba
and the coventurer in the assets that Prospex holds in Spain.

 

Warrego has confirmed that it has received from Strike a confidential,
non-binding indicative all-share merger proposal that may be implemented
through a scheme of arrangement, which is being reviewed by Warrego.  The
announcement by Warrego also references its shareholding in Tarba and the
Company understands that Strike does not wish to participate in assets outside
of Australia.  Should any scheme of arrangement between Warrego and Strike be
agreed, then within a 12-month period, Strike would use best endeavours to
sell Warrego's Spanish assets and additional consideration would be
distributed to the Warrego shareholders.  It would appear that both parties
contemplate divestment of Warrego's Spanish assets.

 

The Spanish assets owned and operated by Tarba comprise the El Romeral gas to
power plant and related gas concessions near Carmona in Andalucía, southern
Spain and the Tesorillo exploration permit in the Cadiz province in Southern
Spain, which is currently suspended.  Prospex owns a 49.9% working interest
in El Romeral and a 15% working interest in Tesorillo, with Warrego owning
50.1% and 85% respectively.  There is a Shareholders Agreement governing the
Tarba shares under which, among other rights, Prospex has an option to
increase its working interest in Tesorillo to 49.9% upon payment of €1.725
million prior to the drilling of an appraisal well.

 

Mark Routh CEO of Prospex commented:

"Should any deal be struck by Warrego the focus by any potential new owner is
most likely to be on the asset base in Western Australia.  This may result in
the disposal of Warrego's Spanish portfolio, which is in no way a reflection
of the quality of the assets.  We will continue to monitor the progress of
the negotiations between Warrego and Strike and update the market in due
course."

 

A copy of the announcement released on the ASX by Warrego on 10(th) November
2022 can be found here: https://bit.ly/3UL91gg (https://bit.ly/3UL91gg) .

 

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

Andrew Raca/Alex Cabral (Corporate Finance)
 Colin Rowbury                                 Novum Securities Limited    Tel: +44 (0) 20 7399 9427

Jon Belliss
 Susie Geliher                                 St Brides Partners Limited  Tel: +44 (0) 20 7236 1177

Ana Ribeiro

 

Notes

 

About El Romeral

The El Romeral gas and power project in Spain, with gas production wells
supplying gas to an 8.1MW power plant near Carmona in Southern Spain is owned
and operated by Tarba.  It is currently operating at about 30% of its full
capacity because Tarba is waiting on permits to drill further infill wells on
the concessions to increase production.  Tarba can now be categorised as a
hybrid energy provider with the successful installation of photovoltaic panels
on the roof of the plant.  Prospex owns a 49.9% working interest in the El
Romeral project via Tarba.  The remaining 50.1% working interest is owned by
Warrego Energy Limited (ASX:WGO).  Tarba sells electricity generated from the
plant on the spot market in Spain.  The Tarba team has continued to liaise
with various government agencies to progress drilling and environmental
approvals for El Romeral.  The El Romeral licences comprise three contiguous
production concessions.  There are no financial or drilling commitments
attached to the El Romeral Exploitation Concession.

 

About Tesorillo

The Tesorillo Project in the Cadiz province of Southern Spain comprises two
petroleum exploration permits, the Tesorillo and Ruedalabola Permits that were
approved as a joint investigation programme.  The Tesorillo Project covers
94,000 acres and includes a known gas discovery at the Almarchal-1 well.
 Prospex owns a 15% working interest in the Tesorillo project via Tarba.
The remaining 85% working interest is owned by Warrego Energy Limited
(ASX:WGO).  Prospex has the right to acquire a further 34.9% of the Tesorillo
Project on payment of €1.725 million prior to the drilling of the appraisal
well on Tesorillo.   The Tesorillo Project is estimated to contain 831 Bcf
gross unrisked prospective resources on a best estimate basis and has
excellent proximity to pipelines and infrastructure.  (Best Estimate
Prospective Resource assessment independently verified by Netherland, Sewell
and Associates - 5 May 2015.)

 

On 12 May 2021 an application was submitted to MITECO (the Spanish Regulator)
to convert the vast majority of the existing Tesorillo Project to an
exploitation concession, together with a field development plan for approval
and all of the necessary supporting documents.  The application was submitted
before the Climate Change Act 7/2021 of 22 May 2021 came into force.  The
outcome of this application is still under consideration by MITECO and will
not be known for some time.

 

The Tarba team has continued to liaise with various government agencies to
progress drilling and environmental approvals for Tesorillo.  Tarba is
targeting conventional sandstone gas reservoirs.  There are no financial or
drilling commitments attached to the Tesorillo Project Exploitation Concession
application.

 

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