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

1 November 2023

Prospex Energy PLC

('Prospex' or the 'Company')

Italy: Selva Field Development

Q3 2023 Operational Update

More than 5.6 million scm gas produced and sold to BP Gas Marketing

Prospex Energy PLC (AIM: PXEN), the AIM quoted investment company focused on European gas and power projects, is pleased to provide an Operational Update including production rates and income for the three months ended 30 September 2023 from the Podere Maiar-1 ("PM-1") gas facility of the Selva Field which is operated by Po Valley Operations Pty Limited ("PVO"), a wholly owned subsidiary of Po Valley Energy Limited ("Po Valley Energy") (ASX: PVE).

Po Valley Energy has a 63% working interest of the Selva Malvezzi production concession, while Prospex has the remaining 37% working interest.

Operational and Financial Overview

·    PM-1 commenced gas production on 4 July 2023.

·    Following a four-week ramp-up and commissioning programme the PM-1 well flowed at daily production levels of c.72,000 standard cubic metres per day (scm/d) during the initial testing period, which is expected to be concluded by the end of December 2023.

·    October production is temporarily running at c.62,000 scm/d as part of the testing programme which is expected to increase in November.

·    Longer term production rates from the well are targeting at least 80,000 scm/d.

·    All the PM-1 gas is sold to BP Gas Marketing under the 18-month supply agreement (announced on 14 February 2023) at a supply price linked to Italy's "Heren PSV day ahead mid" price assessment which tracks the publicly available Dutch TTF spot prices^[1].

·    Gas prices have increased recently from €0.32/scm (€30.3/MWhr) to a current spot price of €0.53/scm (€50.3/MWhr).  The forward curve TTF gas prices are currently above €50/MWhr through to the end of Q1 2025^[1].

·    Gross quarterly production from the Selva Malvezzi production concession was 5,658,117 scm (2,093,503 scm net to PXEN) and gross revenue for the quarter was €1,937,072 (€716,717 net to PXEN).

·    Further upside potential at the Selva Malvezzi Production Concession is advancing at pace with the operator progressing agreements with local landowners and the permitting process with the regulatory authorities to deliver the drilling programmes at Selva North, South and East.

Mark Routh, Prospex's CEO, commented:

"Delivering the stable production rates and moreover securing the substantial cash flows from the brand-new gas plant at the PM-1 gas facility is a significant achievement by the operator of our Selva Malvezzi production concession, Po Valley Energy.  This places Prospex in the enviable position of having stable production and income from two onshore natural gas fields one in Spain and one in Italy.

"Prospex is working together with the Po Valley team and using this production income to progress the necessary activities to secure the development drilling programmes for the other structures on the production concession in order to convert those contingent and prospective resources into proved, developed and producing reserves in the near term.

"We have delivered a key step in the Company's strategy to become a diversified energy producer with multiple producing assets principally in lower risk, onshore European markets with ready access to infrastructure.  We are  proud to be supporting the European Energy sector with producing assets in both Italy and Spain and look forward to updating shareholders on our continued progress."

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 Selva:

The Podere Gallina Licence is in the Po Valley region of northern Italy.  The licence 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 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 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).^[2]

An independent Competent Person's Report of the Podere Gallina Licence was prepared by CGG Services (UK) Limited in July 2022 on behalf of the joint venture.^[2] It attributed a total of 379 MMscm (13.4 Bcf) gross 2P reserves for the Selva redevelopment project.

References:

[1] Source: ICE website forward curve gas prices for the TTF.  https://www.ice.com/products/27996665/Dutch-TTF-Gas-Futures/data?marketId=5360399

[2] Source: "Competent Person's Report Podere Gallina Licence, Italy" prepared by CGG Services (UK) Limited in July 2022 : https://bit.ly/44VF02A

Glossary:

scm                        Standard cubic metres

scm/d                   Standard cubic metres per day

MMscm               Million standard cubic metres

Bcf                          Billion standard cubic feet

MMscfd               million standard cubic feet per day

MWh                     Mega Watt hour

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.