Prospex Energy PLC (AIM:PXEN) Viura-1B Well Flow Rates Exceed Expectations

Viura-1B Well Flow Rates Exceed Pre-Drill Expectations Doubling

 Prospex’s Net Production and Revenues

Prospex Energy plc (AIM:PXEN), the investment company focused on European gas and power projects, is very pleased to report the flow rates achieved from the flow testing of the recently drilled and completed Viura-1B development well in northern Spain, which have exceeded pre-drill expectations.

Highlights:

·    Viura-1B has been completed and it is being tested, having achieved flow rates up to 500,000 scm/d (17.7 MMscfd), which is 72,000 scm/d (2.6 MMscfd) net to Prospex.

·    The gas from the flow testing has already been sold on the market.

·    The Viura-1B well will now be placed on long term production at a stabilised plateau rate of 300,000 scm/d (10.6 MMscfd), which is 43,000 scm/d (1.5 MMscfd) net to Prospex.

·    Prospex’s net production has more than doubled since the beginning of December to ≈82,000 scm/d or ≈2.9 MMscfd.

·    This production increase does not include the production from the existing Viura-1ST3 well which has been producing intermittently since mid October at rates up to 200,000 scm/d (7.1 MMscfd), which is 29,000 scm/d (1.0 MMscfd) net to Prospex, as water handling issues are managed until the completion of the current workover on the Viura-3 water injection well.

·    Recent increased energy prices in Europe have resulted in much higher revenues from the Company’s investments.

·    Enhanced production income will make an important contribution to continued expansion, with eleven further wells planned in the next 18 months to two years across Prospex’s three onshore production concessions in Spain and Italy, and prospective blocks identified for acquisition in Poland.

Mark Routh, the CEO of Prospex, commented:

“The Viura-1B well test flow rates have exceeded pre-drill expectations from the larger than prognosed reservoir section of the main Viura reservoir target.  The flow rates confirm the success of this development well with the added bonus that the gas produced from the flow tests has already been sold to the market and that the well is being put on long-term production at a rate of 300,000 scm/d which is 10.6 MMscfd (43,000 scm/d or 1.5 MMscfd net to Prospex).  This and the production from the existing Viura-1ST3 well has more than doubled Prospex’s net production – directly accruing revenues to the Company’s investments as our gas and generated electricity are sold into the burgeoning European energy markets.

“More than doubling the production and therefore the revenue from our producing assets will put Prospex on an extremely sound footing to be able to fund its expansion plans of the eleven new wells currently going through permitting process on our approved onshore production concessions in Spain and Italy.  It will also facilitate our proposed expansion plans onshore in Poland where we expect to be providing further news on the licence applications in the New Year.”

Further Information

Prospex owns 7.2365% of the Viura field through its ownership of 7.5% of HEYCO Energy Iberia S.L. (“HEI”).  Prospex is receiving 14.473% of the production income from the Viura gas field until payback of its capital investment (expected to be ≈£8 million) plus the accrued 10% p.a. interest thereon.

The Viura-1B well has been connected to the existing gas processing facilities at the Viura gas plant and the gas from the flow testing has been sold on the market since the flow testing commenced on 29 November 2024.  Therefore, the Company has been accruing its share of that production income which will now continue as the well is placed on long-term production on completion of the flow testing programme.

Three zones have been completed and tested in the main reservoir target of the Utrillas-A formation in the Viura-1B well.  The maximum flow rate achieved on test was 500,000 scm/d, which is 17.7 MMscfd (72,000 scm/d or 2.6 MMscfd net to Prospex).  At the conclusion of the multi-rate flow testing and pressure build-up measurement programme the well will be placed on long term production at a stabilised plateau rate of 300,000 scm/d, which is 10.6 MMscfd (43,000 scm/d or 1.5 MMscfd net to Prospex).

At these rates, as from the beginning of December 2024, Prospex’s total accrued net daily production from its Spanish and Italian portfolio has more than doubled from ≈38,000 scm/d or ≈1.3 MMscfd to ≈82,000 scm/d or ≈2.9 MMscfd.  This enhanced production income from the three onshore revenue generating production assets is being accumulated to fund the drilling programmes on Prospex’s three onshore production concessions on which there is a total of eleven further wells planned in the next 18 months to two years:

·    The Viura Gas concession, northern Spain – two further development wells planned into the proven, developed producing Viura gas field in Q1/Q2 2025, one of which already has the full permit to drill approved.  These two new production wells Viura-3B and Viura-3A will be placed on immediate production in the same way as the recently drilled Viura-1B well.

·    The Selva Malvezzi concession, northern Italy – permit applications have been submitted to drill four further wells; two development wells into structures classified as contingent resources, North Selva and South Selva and two exploration wells classified as prospective resources, East Selva and Riccardina.  These wells, which are targeting a total of 88 bcf gross (33 bcf net to Prospex), are anticipated to receive permits to drill in the second half of 2025.

·    The El Romeral concessions, southern Spain – permit applications have been submitted to drill five further wells, two development wells into structures classified as contingent resources Sevilla-3E and Santa Clara-2 and three exploration wells Nuevo Gamo, Santa Rita and Romeral-2S classified as prospective resources.  These five wells are targeting a total of 18.2 bcf gross (9.1 bcf net to Prospex).  The Company hopes to receive permits to drill these five new wells by the end of 2025.

Prospex has also identified and hopes to acquire prospective blocks in Poland, which meet the Company’s stringent investment criteria; namely, areas which have proven gas production, high potential prospectivity in the targeted geological horizons, high potential for new reserves to be unlocked and can be brought onstream within two to three years.

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