Prospex Energy PLC Selva Field: Completion of gas plant construction (5550Z)

TIDMPXEN

RNS Number : 5550Z

Prospex Energy PLC

16 May 2023

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

16 May 2023

Prospex Energy PLC

('Prospex' or the 'Company')

Italy: Selva Field Development

Completion of gas plant construction and connection to gas grid

Prospex Energy PLC (AIM: PXEN), the AIM quoted investment company focused on European gas and power projects, is pleased to announce that construction of the gas plant at the Podere Maiar-1 wellsite of the Selva field in the Po Valley, Italy has been completed. The connection to the gas grid operated by SNAM is also complete allowing the delivery of gas to the market as soon as final operational and safety inspections are complete, which the operator, Po Valley Energy anticipates by the end of May.

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

   --    Podere Maiar-1 ("PM-1") gas plant development is complete and ready for commissioning 
   --    SNAM connections are complete, enabling delivery of PM-1 gas to the SNAM gas grid in Italy 

-- Commercial arrangements complete, allowing PM-1 gas to be delivered under the gas supply agreement announced on 14 February 2023

-- With the SNAM connection and transmission arrangements finalised, Po Valley Operations has initiated the process of recovering EUR757,000 performance bond funds (100% basis - EUR280,090 net to Prospex), previously deposited with SNAM

-- PM-1 gas plant construction and development achieved with only minor cost increases. This result is particularly noteworthy given the current inflationary environment and supply chain issues

-- First gas supply from PM-1 is contingent upon final operation and safety inspection. PVO anticipates this prior to the end of the month

The completion of SNAM connections and commercial arrangements paves the way for the delivery of PM-1 gas to the SNAM grid in Italy. With these connections and arrangements in place, PM-1 gas can now be delivered under the gas supply agreement, announced on 14 February 2023.

Additionally, the successful completion of the SNAM connection and transmission arrangements has resulted in PVO initiating the process for the recovery of the performance bond funds deposited with SNAM. The amount involved in this recovery process is EUR757,000 (100% basis), with EUR280,090 net to Prospex.

Construction and grid connection has been largely completed on schedule and budget, with only a 3% cost difference to budgeted expenditure. This amounts to EUR132,000 (100% basis), EUR48,840 net to Prospex. Given the global supply chain concerns the joint venture is delighted with this outcome.

Initial production of PM-1 gas is contingent on the signoff of the final operation and safety inspection. PVO anticipates that this will occur before the end of May 2023.

Mark Routh, Prospex's CEO, commented:

"I congratulate the team at Po Valley for delivering a safe and very high-quality gas plant development. This has been achieved by PVO and the main contractor, TESI working with the SNAM construction engineers to install the new gas processing plant and the construction and connection to the SNAM operated national grid network. This has in turn triggered the recovery of the performance bond deposited with SNAM worth EUR280,090 to Prospex.

"I was fortunate to visit the well site at the same time as the PVE board in late April and saw first-hand the high standards of installed equipment and importantly the robust safety culture of the TESI and PVO teams. The development has been delivered on schedule and within our budgeted contingency, which is a significant achievement with the ongoing supply chain challenges facing the industry generally. I look forward to updating shareholders on the commissioning and delivery of first gas to the SNAM grid, which the operator anticipates by the end of May."

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 
Ritchie Balmer          Strand Hanson Limited       Tel: [phone] 
 Rory Murphy                                                        3494 
                        --------------------------  -------------------- 
Andrew Monk (Corporate  VSA Capital Limited         Tel: [phone] 
 Broking)                                                           5000 
 Andrew Raca/Alex 
 Cabral (Corporate 
 Finance) 
                        --------------------------  -------------------- 
Colin Rowbury           Novum Securities Limited    Tel: [phone] 
 Jon Belliss                                                        9427 
                        --------------------------  -------------------- 
Susie Geliher           St Brides Partners Limited  Tel: [phone] 
 Ana Ribeiro                                                        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 Selva:

 
 
 PM - 1 gas plant complete and ready for commissioning 
 

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.

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May 16, 2023 03:30 ET (07:30 GMT)