Prospex Oil and Gas PLC Key Environmental Approval for Italian Gas Field (0408Z)
January 07 2020 - 9:45AM
UK Regulatory
TIDMPXOG
RNS Number : 0408Z
Prospex Oil and Gas PLC
07 January 2020
Prospex Oil and Gas Plc / Index: AIM / Epic: PXOG / Sector: Oil
and Gas
Prospex Oil and Gas Plc ('Prospex' or the 'Company')
Key Environmental Approval for Italian Gas Field
Prospex Oil and Gas Plc, the AIM quoted investment company, is
pleased to announce that it has been advised by the operator, Po
Valley Operations Limited ('PVO'), that formal technical
environmental approval for the development of the Selva Malvezzi
Gas-Field ('Selva') in northern Italy has been received from the
Italian Environment Ministry. Environmental approval is a precursor
to final sign off by Ministerial decree, the issuing of the
required INTESA (intergovernmental agreement) and the final grant
of a production concession from Italy's Economic Development
Ministry. Gas production at Selva, which has gross gas reserves of
13.3bcf (2P), is targeted to commence in 2020.
A preliminary Production Concession for Selva was granted by the
Italian Government in January 2019 (see announcement of 15 January
2019 for further details). Under the proposed development plans for
Selva, which historically produced 83Bcf of gas between 1960 and
1984, a fully automated gas plant will initially be installed at
the existing Selva/ Podere Maiar 1dir well site, along with a
one-kilometre long pipeline to connect the well with the nearby
Italian National Gas Grid. The planned Selva development has a
small footprint of less than half a hectare and will have no
emissions from any future commissioning of its gas inventory.
Based on dynamic reservoir studies, an initial daily production
rate is being targeted at Selva of up to 150,000 cubic metres (5.3
mmscf/d) from two gas-bearing reservoirs, C1 and C2, in the
Medium-Upper Pliocene sands of the Porto Garibaldi formation. The
Podere Maiar well was drilled into Selva in Q4 2017. During
testing, peak flow rates of 148,136 scm/day (5.2mmscf/d) on a 3/8
inch choke and 129,658 scm/day (4.6 mmscf/d) on a 3/8 inch choke
were recorded from the C1 and C2 reservoirs respectively.
Selva, which sits within the 331km(2) Podere Gallina Exploration
Permit (the 'Podere Gallina'), of which Prospex holds a 17%
economic interest, in the Po Valley region of Italy. As previously
announced, a Competent Person's Report produced by geophysical
services consultancy, CGG Services (UK) Limited ('CGG') assigned 2P
gas reserves of 2.26Bcf to Prospex's 17% interest in Podere Gallina
In addition to these reserves, CGG estimates Selva's two historic
gas producing North Flank and South Flank reservoirs have a 60% -
70% chance of holding gross contingent resources ('2C') of 14.1Bcf.
Podere Gallina also holds four large prospects (East Selva, Fondo
Perino, Cembalina, and Riccardina) which have been assigned
aggregate gross prospective resources (best estimate) of
91.5Bcf.
Prospex non-executive Chairman, Bill Smith, said, "Thanks to the
receipt of this environmental approval, first gas production at
Selva remains on course to commence at an initial rate of 150,000
cubic metres per day later this year. At this rate and at current
gas prices, Selva will generate significant cash flow that will not
only highlight the disconnect that has opened up between our market
capitalisation and the value of our assets, but will also free up
funds for reinvestment across our asset base. This will soon
include the recently announced conditional acquisition of up to a
49.9% indirect stake in El Romeral, an integrated gas production
and power station operation located in southern Spain. Comprised of
three producing wells which supply gas, through its own network, to
a 100%-owned 8.1 MW power station and multiple low risk development
opportunities with gross contingent and prospective gas resources
of 5Bcf and 90 Bcf respectively, El Romeral, together with Selva
coming on stream, promises to generate much high impact newsflow in
2020. I look forward to providing further updates on our progress
in the year ahead."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
* * ENDS * *
For further information visit www.prospexoilandgas.com or
contact the following:
Edward Dawson Prospex Oil and Gas Plc Tel: +44 (0) 20 3766
0325
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Jack Botros
Duncan Vasey Peterhouse Corporate Finance Tel: +44 (0) 20 7469
0932
Frank Buhagiar St Brides Partners Ltd Tel: +44 (0) 20 7236
Priit Piip 1177
Notes
Prospex Oil and Gas 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.
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END
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