TIDMPXEN
RNS Number : 0668X
Prospex Energy PLC
18 December 2023
Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and
Gas
18 December 2023
Prospex Energy PLC
('Prospex' or the 'Company')
Year End Review and Business Development Update
Prospex Energy PLC, the AIM quoted investment company focused on
European gas and power projects has released a review of the year
and provides an update on its business development activities in
2023.
Review of 2023
As we reach the end of 2023, it is important to reflect on what
Prospex has achieved during the year and the various milestones it
has reached, including the start of production at the Selva field,
our second producing project in Europe, and the significant
reduction of debt, making us well positioned to capitalise on
future investment opportunities.
In February, Po Valley Operations Limited, the operator of the
Selva Malvezzi production concession, in which Prospex has a 37%
working interest, signed a gas sales agreement on behalf of the
Joint Venture with BP Gas Marketing.
In April, the Company strengthened the Board with the
appointment of Mr Andrew Hay as Non-Executive Director. Andrew has
30 years of experience in the corporate finance sector with
expertise in capital markets and a deep understanding of the
upstream energy markets.
Construction of the gas processing facility at the Podere Maiar
1 wellsite at the Selva field in the Po Valley was completed on
schedule in May and within 3% of budget with the successful
connection to the SNAM gas grid.
In May, through Tarba Energía, 20 hectares adjacent to the El
Romeral power plant in Spain was leased for 25 years for Project
Helios a 5MW solar panel project. The development of Project Helios
will produce electricity through photovoltaic solar energy and
increase output from the plant by up to 60%.
Final safety checks by the local Fire Department were
successfully completed in June and formal documentation was issued
by the Italian Energy Ministry to enable the commencement of gas
production from the Selva field.
Gas production started on 4 July 2023 from the Selva field in
the Po Valley region of northern Italy. Prospex now has production
income from two onshore assets in two European countries.
Commissioning of the new gas processing facilities at the Podere
Maiar-1 well site was completed in August.
By September, all of the convertible loan notes issued in July
2022 were converted to equity at 4.25p per share. The GBP1.87
million raised helped fund the Selva development project to first
gas.
In October, Po Valley reported production at the Podere Maiar-1
gas well was running at 62,000scm/d in line with the outlined
ramp-up and testing programme.
Gross quarterly production for the third quarter of 2023 is
reported at 5,658,117 scm (2,093,503 scm net to PXEN) and gross
revenue for the quarter is EUR1,937,072 (EUR716,717 net to
PXEN).
The El Romeral power plant in Spain will have generated gross
revenues from electricity production of about EUR1.8 million in
2023 (approximately EUR0.9 million net to PXEN).
Permit applications underway to drill five wells in Spain and
three wells in Italy.
Business Development Update
During 2023, Prospex either worked up or was offered more than
25 deals or farm-ins in its core geographical area of interest of
Europe focussing on natural gas and power projects. The Prospex
technical team undertook in depth evaluations on 12 of these
opportunities and recommended that the Board should progress to
make an offer on two deals which were advanced to the heads of
terms stage. One of those was ultimately not concluded since the
Board considered, on more detailed investigation, that it involved
onerously high drilling and development costs in the context of the
geological chance of success. The other opportunity passed our due
diligence process, and the Company was ready to invest, subject to
a fundraise. Unfortunately, due to continued challenging market
conditions, we were advised that the market would not support a
fundraise of any magnitude before the New Year, so the Company was
unable to commit to the farm-in.
The Company will continue to evaluate investment opportunities
in the New Year. However, and in order to minimise diluting
investors, Prospex is actively pursuing the self-funded acquisition
of highly prospective open-acreage in proven onshore basins in
Europe.
Mark Routh, Prospex's CEO, commented:
"As I look back on 2023, I am proud of what the Company has
achieved. We now have two producing, cash generative assets in
Europe. This was made possible by issuing convertible loan notes
last year, which enabled us to fund the Selva development project
to first gas production in early July 2023 - a significant
milestone.
"Regarding business development, it is very frustrating that all
the hard work and economic evaluation throughout the year cannot be
reported until there is a signed deal capable of acceptance. Our
strategy as an investment company is to invest in projects which we
believe have the potential to be value accretive for shareholders
and which generate interest and improve the sentiment of the stock
in the market.
"The Company uses its skills and experience to evaluate deals
and will only pursue those which are in the interests of our
shareholders. The Board does not believe it is in shareholders'
interests to finance deals on disadvantageous terms. In recent
months, the state of the stock market has made it almost
impossible, in the Board's opinion, to finance good deals on good
terms.
"We acknowledge that the current share price does not reflect
the real value of the business, as is the case with many listed
companies in the small-cap arena. However, we remain focused on
delivering on our strategy and expect that as we make progress and
the general market conditions improve, this will ultimately be
reflected in the market value of the Company."
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 and to view the summary of the year
review visit www.prospex.energy or contact the following:
Mark Routh Prospex Energy Tel: +44 (0) 20 7236
PLC 1177
Ritchie Balmer Strand Hanson Tel: +44 (0) 20 7409
Rory Murphy Limited 3494
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Jerry Keen Fox-Davies Tel: +44 (0) 20 3884
Capital Limited 7447
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Andrew Monk (Corporate Broking) VSA Capital Tel: +44 (0) 20 3005
Andrew Raca/Alex Cabral (Corporate Limited 5000
Finance)
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Ana Ribeiro / Susie Geliher St Brides Partners Tel: +44 (0) 20 7236
Limited 1177
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END
UPDBRBDDUSBDGXR
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