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

3 May 2023

Prospex Energy PLC

('Prospex' or the 'Company')

Spain: Project Helios Update - Photovoltaic Hybridisation Project

to Increase Electricity Production by 60 percent

Prospex Energy PLC (AIM: PXEN), the AIM quoted investment company focused on European gas and power projects, is pleased to announce that the development of the photovoltaic hybridisation solar project at the El Romeral power plant, known as "Project Helios", which would increase output from the plant by up to 60%, is progressing well ahead of the final investment decision, which is scheduled for consideration in June 2023. 

Highlights

·    20 hectares adjacent to the El Romeral power plant has been leased for 25 years

·    The project to install an array of solar panels with a maximum power output of 5MW peak, is out to tender with five companies based in Spain with tenders expected to complete in early May 2023

·    Final Investment Decision ("FID") for the project is scheduled for consideration in June 2023

·    Permitting, procurement and installation expected to take less than 12 months

·    Existing grid connection has 8.2MW output allocated to El Romeral which is currently utilising just 2.7 MW

·    Further grid capacity is available to accept increased output with the existing infrastructure

The El Romeral power plant is operated by Tarba Energía S.L. ("Tarba"), which is based near Carmona east of Seville in the province of Andalusia, Spain.  The power plant is co-owned through Tarba by Prospex which has a 49.9% working interest and Warrego Energy Limited which has a 50.1% working interest.  Warrego Energy is now wholly owned by Hancock Energy (PB) Pty Ltd. in Perth Western Australia.  Hancock Energy is an active and supportive joint venture owner in Tarba.

The plot of 20 hectares adjacent to the power plant has been leased for an initial period of 2 years with a start date of 1 January 2023.  The first two years are at the reduced rate of €800 per hectare per year with a break clause should full permitting or FID not proceed in that timeframe.  Thereafter once the project has received full authorisations the lease rate for the next 25 years is at €2,000 per hectare per year adjusted for CPI annually.  There is the option to extend the lease in increments of 10 years after this date.

The El Romeral power plant produces electricity from natural gas produced from the three contiguous El Romeral production concessions in the region which are wholly owned by Tarba.  By developing Project Helios for the production of electricity through photovoltaic solar energy, electricity production through renewable energy would increase output from the plant by up to 60%.

The new project is a pioneer in the hybridisation of technologies, using the resources and income from electricity generation from conventional natural gas production to re-invest in renewable energy generation from a photovoltaic plant.  The hybridisation will use the existing connection to the electricity grid and is expected to provide sufficient energy to supply more than 20,000 homes.

The El Romeral power plant was recently declared a public utility by resolution of the Junta de Andalucía.  This declaration comes with no further liabilities and is testament to the good relations that Tarba has built up with the local authorities and the community of Carmona.  This recognition has been welcomed by Tarba and consolidates Tarba's long-term commitment to the population of Carmona as a stable supplier of electricity to the region.

Mark Routh, Prospex's CEO, commented:

"The existing connection to the national grid network operated by Red Eléctrica de España at El Romeral is a significant asset.  Project Helios will allow Tarba to increase its capacity for power export in the near term alongside the capacity increase expected from drilling new gas wells on the existing El Romeral production concessions.  A revision to the application to drill new wells on the concessions was submitted in March 2023 and is now proceeding through the Environmental Impact Assessment process as required by the regulatory authorities.

"The investment in photovoltaic solar technology at Project Helios is due to increase output at the plant by 60%, this alongside Tarba's natural gas power plant marks an important step not only in the security of energy supply, but also in the ecological transition process.  It is now widely acknowledged that natural gas has a crucial role to play in both of these very current issues."

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For further information visit www.prospex.energy or contact the following:

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 30% of its full capacity because Tarba is waiting on permits to drill further infill wells on the concessions to increase production.  Tarba is already categorised as a hybrid energy provider with the successful installation of photovoltaic panels on the roof of the plant in August 2022.  Prospex owns a 49.9% working interest in the El Romeral project via Tarba.  The remaining 50.1% working interest is owned by Warrego Energy Limited.  Tarba sells electricity generated from the plant on the spot market in Spain.  The El Romeral licences comprise three contiguous production concessions.

The El Romeral Power Plant at Carmona near Seville, Andalucía.