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

6 June 2022

Prospex Energy PLC

('Prospex' or the 'Company')

Po Valley: Production Concession Approval Process Update

Prospex Energy PLC, the AIM quoted investment company focused on European gas and power projects, is pleased to announce that Po Valley Energy Limited (ASX:PVE) ('Po Valley' or the 'Operator') has received the penultimate approval for production at the Podere Maiar gas field located in onshore northern Italy, which lies within the Selva Malvezzi Production Concession ('Selva').  Prospex holds a 37% working interest in the Podere Gallina Exploration Permit with the Operator holding the remaining 63%.

Highlights

·          Emilia Romagna Regional Council approves INTESA (local government production agreement) for the Podere Maiar gas field at Selva

·          INTESA is a prerequisite for Italy's Ecological Transition Ministry ('MiTE') to grant a Final Production Concession at Podere Maiar

·          Final Production Concession will allow Po Valley to install gas plant and a 1km pipeline - contract negotiations are underway to complete this

·          The Company expects first gas from Podere Maiar in the first half of 2023, subject to final approval

Mark Routh, Prospex's CEO, commented:

"We are extremely pleased that the regional authorities have approved the INTESA having received no objections from the local authorities to proceed with the gas development.  This marks an important step in progressing Podere Maiar towards production.

"This approval from the Emilia Romagna regional council has taken some time to achieve and we are pleased to now be moving towards the Final Production Concession alongside our partners, Po Valley, so that we can stay on track for our goal of first gas from Podere Maiar next year."

Further Information

Po Valley was awarded the Selva Malvezzi preliminary gas Production Concession (80.68km²) in 2019 and received the final Environmental Impact Assessment ('EIA') decree issued by the Ministry on 29 March 2021.

The Podere Maiar gas field, within Selva, is in a defined "suitable area" under the Plan of Areas (PiTESAI).  Granting of the INTESA opens the way for the anticipated grant of the Final Production Concession by the Ministry.  This will allow Po Valley to proceed with installing a fully automated gas plant at the existing Selva/Podere Maiar 1dir well site and a 1,000m (1km) pipeline to the adjacent National Gas Grid, where the regulator SNAM can connect the pipeline to the grid.

Po Valley has commenced negotiating contracts to complete this construction in a timely manner, with anticipated first gas from Podere Maiar in the first half of CY2023.  Based on dynamic reservoir studies, the field development is designed to produce at a maximum rate of up to 150,000 cubic metres/day (5.3 million standard cubic feet per day ('MMscfd')) from successfully tested C1 and C2 production levels in the Medium- Upper Pliocene sands of the Porto Garibaldi Formation.  (Refer to Po Valley (ASX:PVE) ASX release dated 29 May 2018)

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.

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For further information visit www.prospex.energy or contact the following:

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'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.

About El Romeral and Tarba

The El Romeral gas and power project in Spain, with gas production wells supplying natural gas to an 8.1MW power plant near Carmona in Southern Spain is owned and operated by Tarba Energía SL ('Tarba').  It is currently operating at about 20% of its full capacity because Tarba is waiting on permits to drill further infill wells on the concessions to increase production.  Prospex owns a 49.9% working interest in the El Romeral project via Tarba.  The remaining 51.1% working interest is owned by Warrego Energy Limited (ASX:WGO).  Tarba sells electricity generated from the plant on the spot market in Spain.  Current spot market prices have reached all-time highs in recent months.  The El Romeral licences comprise three contiguous production concessions.

About Selva

The Podere Gallina Licence is in the Po Valley region of Italy.  The licence contains the currently shut‑in Selva gas-field as well as exciting exploration opportunities.  The Podere Maiar-1 well was completed in December 2017 and successfully found a commercial gas accumulation up-dip of the previous wells on the Selva field.  The Company now has a 37% working interest in the Podere Gallina licence.

The Podere Gallina Licence holds independently verified 2P gross reserves of 13.4 Bcf (5.0 Bcf net to Prospex at 37% WI), gross Contingent 2C Resources of 14.1 Bcf (5.2 Bcf net) and a further 91.5 Bcf of gross Best Estimate Prospective Resources (33.9 Bcf net).

An independent Competent Person's Report of the Podere Gallina Licence was prepared by CGG Services (UK) Limited in January 2019 on behalf of the joint venture.^[1] It attributed a total of 379 MMscm (13.4 Bcf) gross 2P reserves for the Selva redevelopment project.

The CPR also attributed Best Estimate gross prospective (un-risked) gas resources of 1,493 MMscm (52.7 Bcf) on the Podere Gallina Licence in three separate structures.

References:

[1] Source: "Competent Person's Report Podere Gallina Licence, Italy" prepared by CGG Services (UK) Limited in January 2019 https://bit.ly/3nZNfYf].

Glossary:

scm                        Standard cubic metres

MMscm               Million standard cubic metres

Bcf                          Billion standard cubic feet

MMscfd               million standard cubic feet per day

Qualified Person Signoff

In accordance with the AIM notice 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 over 40 years 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.

The updated Corporate Presentation for Q2-2022 is available on the Company's website at https://bit.ly/3vhTXwL.