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

31 October 2024

Prospex Energy PLC

("Prospex" or the "Company")

Italy: Selva Malvezzi Production Concession

Q3 2024 Activity Report

Prospex Energy PLC (AIM: PXEN), the AIM quoted investment company focused on European gas and power projects, is pleased to provide an update from the Selva Malvezzi production concession in Italy following the publication by Po Valley Energy Limited ("Po Valley Energy") (ASX: PVE) of its Q3 2024 activity report.  Po Valley Operations Pty Limited ("PVO"), a wholly owned subsidiary of PVE is the operator of the Selva Malvezzi production concession, which has a 63% working interest, while Prospex has the remaining 37% working interest.

Highlights

·    The Podere Maiar-1 well at Selva ("PM-1") has continued to perform consistently during Q3 2024.

·    Average daily production for the quarter Q3 2024 was 76,910 scm/d.

·    PM-1 continues to sell the gas to BP Gas Marketing under a 12-month continuation of the offtake agreement.

·    Strong weighted average gas sales price for the quarter of €0.39/scm (~€37/MWh) an increase on the previous quarter (€0.34/scm).

·    Gross Quarterly production was 7.02 MMscm of gas (2.6 MMscm net to Prospex) and gross revenue for the quarter was €2.76 million (€1.02 million net to Prospex).

·    Routine slick line operation carried out in September 2024 with results in line with expectations and confirming an average daily production rate of 80,000 scm/day for the foreseeable future.

·    Four new drilling applications filed with the Ministry of Environment and Energy Security at the end of September 2024.  All four wells are located within the Selva Malvezzi Production Concession.

·    Environmental Impact Studies for these 4 new wells are well advanced and on track for submission in Q4-24.  Upon submission, the Ministry of Environment and Energy Security will commence their formal assessment.

·    Preparation for the 3D geophysical survey acquisition on the Selva Malvezzi Production Concession was significantly progressed during the quarter.  All environmental approvals have been received.  The geophysical campaign will commence once final sign off from the regional authority is received which is expected after the regional elections scheduled for the second half of November 2024. 

Gas production and revenues from the PM-1 gas facility in the Selva Malvezzi Production Concession for the four quarters from Q4-2023 to Q3-2024 are shown in the table below:

Mark Routh, Prospex's CEO, commented:

"I am very pleased to report that Po Valley Energy, the operator of our Selva Malvezzi Production Concession continues with sound and reliable operations ensuring consistent and increasing income from the concession as gas prices in Europe continue to rise.

"It is also very good news that the permits to drill the four further wells on the concession have been submitted to the regulatory authorities and that there has been positive progress on the permitting process for the 3D seismic survey planned to be acquired from Q4-2024.

"I have been advised by the operational team at Po Valley Energy that the recent flooding in the Emilia Romagna region in northern Italy has not affected the area of the Selva Malvezzi Concession nor the SNAM pipeline connection station."

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, please contact:

Further information on the Company can be found on its website at www.prospex.energy.

Notes

Prospex Energy PLC is an AIM quoted investment company focused 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 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 : 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.