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

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR FORWARDING, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION.  PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT. 

The communication of this announcement, and any other documents or materials relating to the Proposed Fundraise and the Loan Notes is not being made, and such documents and/or materials have not been approved, by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000.  Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom.  The communication of such documents and/or materials as a financial promotion is only being made to, and may only be acted upon by, those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Financial Promotion Order")) or persons who are within Article 43 of the Financial Promotion Order (being existing members or creditors of the Company) or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.

19 December 2025

Prospex Energy PLC

('Prospex' or the 'Company')

£565,000 Issuance of Convertible Loan Notes

Proposed Fundraise of up to £1.6 million to Support Portfolio Capital Expenditure

Prospex Energy PLC (AIM: PXEN), the AIM-quoted investment company focused on European gas and power projects, announces that it has issued £565,000 in unsecured Convertible Loan Notes ('the Loan Notes') to existing and new investors ('the Subscribers'), including all of the directors of the Company.

The Company will now offer any existing shareholders and qualified investors the opportunity to participate in the Loan Notes on the same terms, for a total subscription (including the £565,000 received to date) of up to £1.6 million.  The offer will remain open until 9 January 2026.  Further details on how to subscribe to the Loan Notes can be found below.

Highlights

·    £565,000 raised via the issue of unsecured Convertible Loan Notes of £1 each, due at the end of June 2028.  Offer remains open until 9 January 2026 to raise up to £1.6 million.

·    The Loan Notes are convertible at 3p per ordinary share at any time at the election of the investor.

·    Interest at 12% per annum is payable quarterly, with the first two interest payments on 31 March 2026 and 30 June 2026 to be capitalised and added to the loan principal rather than paid in cash.

·    Loan principal to be repaid in three tranches at the end of December 2027, the end of March 2028 and the end of June 2028.  Forecast increased gas production from the drilling campaigns on all three of the Company's production concessions is expected to cover the capital repayments.

·    Net proceeds will be used to support the Company's ongoing activities, including current and future capital expenditure requirements.

·    Ongoing operational costs and overheads continue to be met from production income generated by the Company's strategic asset portfolio.

Mark Routh, Prospex's CEO, commented:

"The proceeds of the Loan Notes will mostly be used to fund the Company's 37% share of the 3D seismic acquisition on the Selva Malvezzi production concession in Italy.  A minimum of £800,000 is required to cover the cash calls in respect of this asset received and to be received from the operator.  £300,000 of the fund raise to is cover the commitment for a new transformer at the El Romeral power plant in southern Spain which is on order for delivery later in 2026.  The balance of the £200,000 cash call from HEYCO Energy Group, Inc. to fund the Viura asset which was due in June 2025 is to be transferred into the Loan Notes.

"The Company believes it has a diverse and highly prospective investment portfolio with the potential to deliver significant value over time and, on this basis, encourages shareholders to consider participating in the offer of the Loan Notes."

Use of Funds and Structure

The funds raised from the issue of these Loan Notes is to fund the ongoing growth of the Company and its current and future capital expenditures.  Ongoing operational expenditures and overheads are covered from production income from the Company's portfolio of assets.

The £565,000 Loan Notes issued to date comprises the following:-

·    £300,000 in new cash from directors and existing shareholders,

·    £200,000 of Loan Notes have been issued to HEYCO Energy Group, Inc. to fulfil the balance of the June cash-call on Viura, which the Company did not pay at the time, and

·    £65,000 of Loan Notes issued to cover a cash advance to cover the deposit on ordering a new transformer at El Romeral.

The Company will accept further Loan Note subscriptions up to a total of £1.3 million (including the £565,000 committed to date) to cover:-

·    £235,000 to fund the balance of the cost of the new El Romeral transformer in Q3-2026

The Company will accept further Loan Note subscriptions up to a maximum £1.6 million for general corporate purposes including contingency and costs.

Selva Malvezzi

£800,000 of the net proceeds of this fund raise is to provide funds towards the Company's share of development costs at the Selva Malvezzi concession, in the Po Valley in Italy, which includes cash calls under the Joint Operating agreement received and to be received from the operator to cover the Company's share of the costs of the 3D seismic acquisition programme which completed last month.

Viura

£200,000 of the issuance is to meet the balance of the June cash-call on Viura in northern Spain which was not fulfilled by the fund raise in June 2025.  HEYCO Energy Group, Inc. has agreed that this £200,000 is to be converted into the Loan Notes.

Tarba - El Romeral

A total of £300,000 of the net proceeds is to meet the cost of a new transformer at the El Romeral power plant in Carmona southern Spain, which is due for delivery in 6-8 months, which is when the final payment of £235,000 will become due.  The transformer was ordered in November and a 20% deposit of £65,000 has already been paid and converted into the Loan Notes.

Further Information on the Subscribers and the Loan Note

The Loan Notes will pay 12% interest per annum quarterly, with the first two quarterly interest payments on 31 March 2026 and 30 June 2026 to be capitalised and added to the loan principal rather than paid in cash.  Quarterly cash interest payments will be made thereafter with the first payment on 30 September 2026.  Unless converted, the Loan Note principal is to be repaid in three equal capital repayments scheduled at the end of December 2027, the end of March 2028 and the end of June 2028.  Forecast increased gas production from the drilling campaigns on all three of the Company's production concessions is expected to cover the capital repayments.

The Company can elect to pay the interest in Euros by giving 10 business days' notice.  The Company can elect, on a change of control of the Company, where a single party has over 50% of the issued share capital of the Company, to convert some or all of the issued Loan Notes, including capitalised interest, into ordinary shares at the lower of the 3p conversion price or the prevailing market price.  Accrued but unpaid interest may be paid in cash at the time of conversion or added to the loan principal and converted at the election of the Noteholder.

Existing share authorities are sufficient to satisfy any potential conversion of the maximum approved amount of £1.6 million plus any accrued interest.

The Company can elect to repay the Loan Notes in full or part at any time by giving the noteholders one months' notice.  

How to subscribe to the Loan Notes

The Loan Notes will be issued by the Company directly to each subscriber.

The Loan Note Investor Presentation and Term Sheet can be downloaded from the Company's website at https://prospex.energy/investors/corporate-documents.

To subscribe to the Loan Notes please contact the Company's brokers VSA Capital or Hannam & Partners by email:-

VSA Capital                         email mail@vsacapital.com

Hannam & Partners        email info@hannam.partners

Loan Note Subscriptions to date

£565,000 Loan Notes have been issued to 8 individual subscribers, including all of the current Directors and one member of the executive management team who is also a Person Discharging Managerial Responsibility ("PDMR"):

Director*/PDMR†                                   Amount

Bill Smith*                                                    £25,000

Alasdair Buchanan*                                 £25,000

Mark Routh*                                              £10,000

Andrew Hay*                                             £20,000

Richard Jameson†                                    £65,000

Total                                                            £145,000

Related Party Transaction

The participation in the Loan Notes by the Directors, and HEYCO Energy Group, Inc., constitutes a related party transaction under the AIM Rules.  Due to the participation by all of the directors in the Loan Notes, there is not a director, or directors, independent of the issue of the Loan Notes to provide the necessary AIM Rule 13 related party transaction opinion.  Accordingly, Strand Hanson Limited, the Company's Nominated Adviser, confirms it is satisfied that the terms of the participation by the Directors and HEYCO Energy Group, Inc., in the Loan Notes is fair and reasonable insofar as the Company's shareholders are concerned.

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 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 Viura:

The Viura acquisition significantly increased Prospex's estimated reserves by 6.5 Bcf (0.18 Bcm) net to Prospex.  The Operator's best estimate of recoverable gross remaining reserves at the Viura field is 90 Bcf (2.5 Bcm) and is expected to increase upon further evaluation of the newly drilled horizons.  Once the newly reprocessed 3D seismic is reinterpreted it is the Operator's intention to update the reservoir model, gas in place and obtain an independently verified report on the reserves for the Viura field.

About Tarba:

Tarba normally generates electricity at its El Romeral power plant from its own natural gas production from the concessions, which in July 2024 were granted a ten-year extension by the central Spanish Ministry to July 2034.  The plant is currently not producing electricity whilst a new transformer is being sourced.  The five wells currently in the final stages of the permitting process are planned to target the five optimum structures on the El Romeral concessions, which will produce biogenic gas from shallow subsurface horizons.  The depth of the wells average about 700 metres and will each take no longer than 3 to 4 weeks to drill once a suitable drilling rig has been mobilised after the well permits are secured.

El Romeral Gas Reserves and Resources

An independent Competent Person's Report including the gas Reserves as well as the Contingent and Prospective gas Resources of the El Romeral Licence areas, was prepared by Netherland Sewell & Associates Inc. on 9 October 2019.^[2]  In addition to the 2P reserves of 8.5 MMscm (0.3 Bcf) it attributes a total of 142 MMscm (5.0 Bcf) of 2C resources and 2,541 MMscm (89.7 Bcf) Best Estimate Prospective resources to the El Romeral Licence Concessions.

Prospex through its ownership of Tarba now owns 100% of the El Romeral Concessions.

About Selva:

The Selva Malvezzi Production Concession is in the Po Valley region of northern Italy.  The concession contains the 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 Production Concession held via Prospex's two wholly owned subsidiaries, PXOG Marshall Ltd (17% of the Licence) and UOG Italia Srl (20% of the Licence).

The Selva Malvezzi Production Concession holds independently verified 2P gross proven 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 which was converted into the Selva Malvezzi Production Concession at first gas in July 2023, was prepared by CGG Services (UK) Limited in July 2022 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 : Selva-CGG_CPR-July-2022

^[2] Source: "Competent Person's Report Netherland Sewell & Associates Inc. 9 October 2019.

El-Romeral-NSAI-CPR-2019

Glossary:

Bcf                          Billion standard cubic feet

MMscm               Million standard cubic metres

MMscfd               million standard cubic feet per day

MWh                     Mega Watt hour

scm                        Standard cubic metres

scm/d                   Standard cubic metres per day

TTF                         The 'Title Transfer Facility' - a virtual trading point for natural gas in the Netherlands.

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.