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.
