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

5 July 2023

Prospex Energy PLC

('Prospex' or the 'Company')

Italy: Selva Field Development

Start of gas production from Podere Maiar-1 in Italy

Prospex Energy PLC (AIM: PXEN), the AIM quoted investment company focused on European gas and power projects, is pleased to announce the start of gas production from the Podere Maiar-1 ("PM-1") gas facility at the Selva field in the Po Valley region of northern Italy.  First gas was achieved following the completion of operational and safety inspections with successful sign off from UNMIG and the Fire Department and subsequent go-ahead from the Ministry last week, solidifying its authorisation for gas production at PM-1.

Construction and grid connection of PM-1 to the SNAM grid in Italy was announced on the 16 May 2023, with all activities completed on schedule and within 3% of budget.

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 a 63% working interest, while Prospex has the remaining 37% working interest.

Highlights

·    Podere Maiar-1 commenced gas production in Italy, delivering first gas on 4 July 2023

·    First gas will provide the Company with its maiden revenue from the Selva Malvezzi Production Concession in Italy

·   PM-1 will provide gas directly to the domestic Italian market under an 18-month supply agreement with BP Gas Marketing announced on 14 February 2023

·    Further upside potential at the Selva Malvezzi Production Concession (Figure 1), as Po Valley Energy, the Operator, intends to advance other projects within the Concession.

Mark Routh, Prospex's CEO, commented:

"I am absolutely thrilled to be announcing the start of first gas from the Podere Maiar-1 well in the Selva Field, a pivotal milestone in our company's development and a credit to the work of our partners at Po Valley Energy and their team on the ground, Po Valley Operations, who have made today's announcement possible.

"I would also like to thank our shareholders, who have supported us as we transitioned to become a gas producer in Italy with guaranteed revenues from our 37% interest in the field, on the back of the 18-month supply agreement with BP Gas Marketing.  We are optimistic additional gas producing wells will be developed within this Concession which hosts several lookalike prospective wells and we look forward to updating the market on our progress in this regard."

"This is 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".

As part of the gas production process, Po Valley Energy will actively monitor production parameters in order to determine the optimal flow rate and ensure sustainable production levels from the Podere Maiar-1 well.  By settling on a sustainable flow rate, it aims to maximise the production potential from the Selva Malvezzi concession.  The Company will update shareholders on the production rates in the coming months.

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.

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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 Selva:

The Podere Gallina Licence is in the Po Valley region of northern Italy.  The licence contains the 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).  Prospex estimates that the net monthly revenue from the 37% working interest in Selva at current TTF gas prices will exceed £300,000 net of tax and royalties.

The Podere Gallina Licence holds independently verified 2P gross proven 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 July 2022 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.