Prospex Energy PLC – Final Results for Year ended 31 December 2022 & AGM

Final Results for Year ended 31 December 2022

and

Annual General Meeting

Prospex Energy plc, the AIM quoted investment company, is pleased to announce its audited Final Results for the year ended 31 December 2022 and Notice of Annual General Meeting (“AGM”) on 20 June 2023.

Corporate and Financial Highlights (as of 31 December 2022)

·    Total Assets of £16,064,640 from £6,697,305 in 2021, an increase of 240% reflecting the after-tax effect of the revaluation of the Company’s working interest in the Podere Gallina licence in Italy increasing to 37% from 17% which completed in April 2022.

·    The combined value of these equity investments, current and non-current loans is £21,561,316 up from £8,726,484 in 2021 a 221% increase.

·    Successfully completed a placing of £2,454,800 in February at 3.5p per share with no warrants.

·    Raised debt/equity hybrid financing of £2,370,000 in aggregate from the issue of convertible loan notes convertible at 4.25p per share and 5.5p per share to existing and new investors, with participation of all the directors of the Company.

·    Hybrid financing enabled Prospex to fund fully its 37% share in the Selva field development to the point of first gas then scheduled early in the second quarter of 2023.

·    Cash and cash equivalents at the year-end of £1,482,762 (2021: £220,060).

Operational Highlights

·    Selva Field

 During the year development work started at the Selva field in the Po Valley region of northern Italy, operated by Po Valley Energy (ASX:PVE) (“Po Valley” or “the operator”).

 In January 2022, Po Valley, started and fully funded the installation of the background seismic monitoring network to be operational ahead of the 12 months required by the regulators.

 In June 2022, the penultimate approval for the production concession at the Podere Gallina licence was granted by the Emilia Romagna Regional Council.  This local government approval was a prerequisite for Italy’s MITE to grant the Final Production Concession at Selva Malvezzi.

 On 29 July 2022, full production concession approval was granted by the MITE.  In August 2022, contracts were awarded, and construction commenced of the automated gas plant facilities, the installation of a 1,000 metre four-inch pipeline and the connection to the national gas grid network operated by SNAM.

 In September 2022, Po Valley completed the land acquisition required to connect the pipeline from the suspended well at Selva Malvezzi to the SNAM gas grid and purchased the required 1km of 4-inch steel pipe.

 In November 2022, final approvals were received to commence field development works at the Selva Gas Field and gas plant construction and pipeline installation started.

·    El Romeral

 Operations continued at El Romeral in Andalucía, southern Spain through the Company’s investment in Tarba Energía, the operator.

 Gross monthly revenue from electricity generation at the El Romeral power plant peaked at over €500,000 in March 2022.

 In March 2022, Tarba completed the El Romeral plant automation project which started in December 2021 allowing 24/7 production operations.

 On 28 April 2022, Tarba completed the repayment of its outstanding loans plus interest to the two co-owners Prospex Energy and Warrego Energy.

 In June 2022, Tarba commenced the first of two solar installation projects at El Romeral, ‘Project Apollo’ the installation of solar panels on the power station roof.  The second solar project ‘Project Helios’ which involves the installation of a 4.9MW solar farm adjacent to the power plant was recommended for an investment decision and front-end engineering and design (‘FEED’) studies commenced.

 By August 2022 the El Romeral asset was generating healthy revenues with daily electricity spot prices averaging more than €180/MWhr in the quarter to 30 June 2022.

 In August 2022, the installation of 83 solar panels on the roof of the power plant was completed.  Project Apollo has an estimated return on investment of 3 – 4 years.

 By December 2022, the reinterpretation of the reprocessed 2D seismic lines across the El Romeral Production Concessions started in May 2022, was nearing completion with the aim of optimising the top 5 drilling targets for the permitting application process as requested by MITECO, the Spanish regulator.

Post period highlights

·    In February 2023, a joint Gas Sales agreement was signed to offtake and sell gas from the Selva field in Italy.

·    In May 2023, the gas plant construction at Selva was completed and is ready for commissioning.  The connections to the gas grid operated by SNAM are complete, enabling the delivery of gas to the Italian gas grid.  With the SNAM connection and transmission arrangements finalised, Po Valley Operations has initiated the process of recovering €757,000 performance bond funds (100% basis – €280,090 net to Prospex), previously deposited with SNAM.

·    In April 2023, the Company strengthened the board of directors with the appointment of Andrew Hay as a Non-Executive Director. 

Notice of Annual General Meeting

The Company also gives notice that its AGM will be held at the offices of Shakespeare Martineau LLP, 6th Floor 60 Gracechurch Street, London, United Kingdom, EC3V 0HR at 11.00 a.m. on 20 June 2023. 

The Financial Results for the year ended 31 December 2022 together with the Notice of AGM will be available to download today from the Company’s website and will also be posted to shareholders on or around 26 May 2023.

Commenting on the results, Mark Routh, Prospex’s CEO, said: 

“I am pleased with these strong results that have laid the foundation for Prospex to progress to the next level, with increased gas production imminent from the Selva field in Italy.  2023 is set to be a truly transformational year for the Company.  We are continuously looking for ways to improve our current investments and we have made advancements at our Spanish plant with Project Helios which would increase output from the plant by up to 60%.  With the completion of the project expected to take less than 12 months, it is an exciting time in Prospex’s history.

“Looking ahead, I expect to be reporting on the organic growth of the Company’s assets with several future planned wells proceeding through the permitting process.  We are continually monitoring other prospects for any potential opportunities to expand the business but will remain technically rigorous in our selection of growth opportunities that we believe will only benefit the Company.

“Prospex is in a strong operational position with an experienced team who remain committed to increase shareholder value.”


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