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

29 July 2022

Prospex Energy PLC

('Prospex' or the 'Company')

Production Concession Granted for the Selva Field in Italy

Prospex Energy PLC (AIM: PXEN), 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 approval for the production concession at the Podere Maiar gas field located in the Po Valley onshore in northern Italy, which lies within the Selva Malvezzi production concession ('Selva').  Prospex holds a 37% working interest in the Podere Maiar licence with the Operator holding the remaining 63%.

Highlights

·    Production Concession at Selva fully approved by Italy's Ministry of Ecological Transition

·    On the assumption that the joint venture parties meet the development costs and secure the necessary contractors to undertake the development work, first gas is anticipated in  H1 of 2023

·    Contracts can now be awarded and first payments made to the contractors for the construction of the automated gas plant facilities, the installation of a 1,000 metre four-inch pipeline and the connection to the national gas grid network operated by SNAM

·    Prospex will now pay its 37% share of the €757,000 SNAM Bond (€280,090 net to Prospex) necessary to procure the connection to the national gas grid

Mark Routh, Prospex's CEO, commented:

"We are extremely pleased to have received the final approval of the Production Concession from the Italian regulatory authority, the Ministry of Ecological Transition.  This allows work to commence immediately to connect the suspended Podere Maiar-1 well to the adjacent National Gas Grid operated by SNAM.  I acknowledge the hard work and advanced planning by the Operator's team in Italy whose perseverance and professionalism has led to securing this major milestone for both Po Valley and Prospex.

"The development of this indigenous gas field is good for local jobs, boosts the economy of the region and although relatively small, this gas production will go some way towards alleviating the energy and gas supply shortfalls being experienced in Italy and indeed the whole of Europe."

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 Emilia Romagna Regional Council approved INTESA (local government production agreement) for the Podere Maiar gas field at Selva on 5 June 2022.  Po Valley will now apply to the Ministry for the formal transfer of 37% to Prospex of the quotas in Po Valley's Selva Malvezzi concession.  This legal transfer can only happen after production concession approval and is essentially a formality.  It will not delay field development activity undertaken by the Operator and its contractors.

The Podere Maiar gas field, within the Selva Malvezzi concession, is in a defined "suitable area" under the Plan of Areas ('PiTESAI').  

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 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 whilst Tarba waits 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 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 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 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) in Selva, 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).^[1]

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 Q3-2022 is available on the Company's website at https://www.prospex.energy/home/