Prospex Energy PLC El Romeral: Income and Production Update (7852J)

TIDMPXEN

RNS Number : 7852J

Prospex Energy PLC

29 April 2022

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

29 April 2022

Prospex Energy PLC

('Prospex' or the 'Company')

El Romeral: Income and Production Update

Prospex Energy PLC (AIM: PXEN), the AIM quoted investment company focused on European gas and power projects, is pleased to provide an update on the production strategy of, and income from, the El Romeral power plant in southern Spain ('El Romeral'). El Romeral continues to provide a very healthy income from selling electricity into the spot market in Spain at near record price levels. The Company holds a 49.9% working interest in El Romeral through its interest in Tarba Energía S.L. ('Tarba').

Highlights:

   --    Loan plus interest repayment made by Tarba to its two shareholders on 28 April 2022. 

-- Loan repaid of EUR289,577, plus accrued interest of EUR19,092.97, equalling a total of EUR308,669.97. Prospex's share of this is EUR153,698.64.

-- Tarba has now repaid in full its two shareholders, Prospex and Warrego Energy Ltd, the outstanding loans held in the El Romeral asset of EUR589,577, plus accrued interest of EUR19,092.97.

-- The El Romeral power plant is now operating 24 hours a day seven days a week as its default operating mode, thereby boosting revenue.

Further information

As a direct result of continuing strong electricity prices, Tarba has repaid its outstanding debt to its two shareholders in full. Tarba repaid EUR300,000 to its shareholders on 30 December 2021 and paid the outstanding amount of EUR289,577 plus accrued interest of EUR19,092.97 on 28 April 2022. Prospex's share of this latest repayment is EUR153,698.64.

The high income from electricity generation at the plant at near record prices has been augmented by the ability of the plant to run 24-hour operations. Having successfully run the plant since mid-March for 24 hours a day six days a week, the operational team and the subsurface technical team at Tarba have been working together closely to monitor the performance of the plant and the gas production with input from reservoir modelling. With the plant now fully automated, the Tarba executive management team has taken the decision to run the plant 24 hours a day, seven days a week as the default operating mode. Electricity generation can be suspended if needed when electricity pool prices drop below breakeven prices. This has happened rarely in recent months but with volatility in the spot price for electricity, the recent plant automation project has ensured that production and income can be fully optimised. Tarba has cash in hand of more than EUR600,000 after this loan repayment. Gross electricity sales revenue for the quarter ended 31 March 2022 was EUR1,046,485.

Mark Routh, Prospex's CEO, commented:

"El Romeral continues to generate very healthy revenues with electricity spot prices at record levels. This full loan repayment by Tarba Energía to its two shareholders has been made possible not only by recent high electricity prices but also because of the successful implementation of the plant automation project executed in December last year, which has now resulted in 24/7 plant operations. Settling this debt cleans up Tarba's balance sheet and provides it with the financial flexibility to capitalise on further business development opportunities being worked up in and around the power plant.

"Tarba remains ready to increase its gas to power generation capacity at El Romeral as soon as the permits to drill a portfolio of infill wells on the El Romeral concessions are received. Achieving 100% output capacity could be realised from the first two infill wells. A further increase of the plant's generation capacity would be possible in parallel with the drilling programme.

"The current energy crisis has highlighted the need for long-term energy independence and security of supply, not only in Europe but globally. Investment in onshore, indigenous local projects such as El Romeral, is key if we are to address the challenges posed by the rise in global energy prices and volatility in international markets. We are delighted to be part of the solution, albeit in a small way."

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:

 
Mark Routh       Prospex Energy PLC        Tel: [phone] 
                                                           1177 
Rory Murphy      Strand Hanson Limited     Tel: [phone] 
 Ritchie Balmer                                            3494 
Colin Rowbury    Novum Securities Limited  Tel: [phone] 
 Jon Belliss                                               9427 
Duncan Vasey     Peterhouse Capital        Tel: [phone] 
 Lucy Williams    Limited                                  9797 
Susie Geliher    St Brides Partners        Tel: [phone] 
 Ana Ribeiro      Ltd                                      1177 
 

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 20% of its full capacity because Tarba is waiting 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 51.1% working interest is owned by Warrego Energy Limited (ASX:WGO). Tarba sells electricity generated from the plant on the spot market in Spain. Current spot market prices have reached all-time highs in recent months. The El Romeral licences comprise three contiguous production concessions.

The updated Corporate Presentation for Q2-2022 is available on the Company's website at https://bit.ly/3vhTXwL .

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April 29, 2022 02:01 ET (06:01 GMT)