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

14 February 2023

Prospex Energy PLC

('Prospex' or the 'Company')

Italy: Selva Field Development

Gas Sales Agreement signed with BP Gas Marketing

Prospex Energy PLC (AIM: PXEN), the AIM quoted investment company focused on European gas and power projects, is pleased to announce that the Operator of the Selva Malvezzi production concession in which Prospex has a 37% working interest, has signed a gas sales agreement ("GSA") with BP Gas Marketing Limited ("BPGM"), an indirect, wholly owned subsidiary of BP International Limited ("BPI") under which BPGM will purchase the forecast gas production from the soon to be completed Podere Maiar-1 production facility in the Selva Malvezzi production concession located in the Po Valley Region of Italy.  Po Valley Operations Pty Limited ("PVO"), a wholly owned subsidiary of Po Valley Energy Limited (ASX: PVE) is the Operator of the Selva Malvezzi production concession with 63% ownership interest and Prospex has the remaining 37% working interest.

Highlights

·    18-month GSA contract to commence on 1 April 2023 with potential to extend

·    An estimated 37 million standard cubic metres of natural gas is expected to be supplied to BPGM under the contract

·    Gas supply price will be linked to Italy's "Heren PSV day ahead mid" price assessment

·    The Joint Venture is fully funded to complete the Podere Maiar-1 production facility development and first gas is on track for early Q2 2023.

Mark Routh, Prospex's CEO, commented:

"The gas sales agreement with BP Gas Marketing Ltd marks a significant milestone for the Company and its joint venture partner, Po Valley as we get closer to first gas production from the Selva field development.  We are delighted that Po Valley has secured the agreement with BP Gas Marketing Limited, a recognisable brand in the industry, to take delivery and sell our gas and look forward to working with them.  Prospex is selling its share of the gas production jointly with the Operator, Po Valley, under a joint marketing agreement, in order to optimise the value of our gas sales.

"First gas is still on track for early in the second quarter of 2023, on schedule and on budget."

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 the Gas Sales Agreement:

Key terms of the GSA include:

About Selva:

The Podere Gallina Licence is in the Po Valley region of northern Italy.  The licence contains the currently shut‑in Selva gas-field as well as exciting exploration and development opportunities.  The Podere Maiar-1 well at Selva 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 held via Prospex's two wholly owned subsidiaries, PXOG Marshall Ltd (17% of the Licence) and UOG Italia Srl (20% of the 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 88.2 Bcf of gross Best Estimate Prospective Resources (un-risked) (32.6 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.

References:

[1] Source: "Competent Person's Report Podere Gallina Licence, Italy" prepared by CGG Services (UK) Limited in July 2022 [https://bit.ly/3JASCc2]

Glossary:

scm                       Standard cubic metres

MMscm               Million standard cubic metres

Bcf                        Billion standard cubic feet

MMscfd               million standard cubic feet per day

MWh                    Mega Watt hour

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.

An Investor Presentation from January 2023 is available on the Company's website at https://www.prospex.energy/home/