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

7 August 2023

Prospex Energy PLC

('Prospex' or the 'Company')

Italy: Selva Field Development

Successful ramp-up and commissioning of the Podere Maiar-1 gas facility in Po Valley

1,800,000 scm gas produced during ramp-up 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 announce that Po Valley Energy Limited ("Po Valley Energy") (ASX: PVE) has successfully completed the ramp-up and commissioning process at the Podere Maiar-1 ("PM-1") gas facility of the Selva Field.

Po Valley Operations Pty Limited ("PVO"), a wholly owned subsidiary of Po Valley Energy, is the Operator of the Selva Malvezzi production concession with a 63% working interest, while Prospex has the remaining 37% working interest.

Highlights

·    The four-week ramp-up and commissioning programme at the PM-1 production facility was completed during the week ending 4 August 2023

·    A seamless ramp-up and commissioning process has concluded with slick line rig removal of data gathering memory gauges from the lower C2 production zone as part of a three-day scheduled shut down

·    Production at PM-1 has recommenced with forecast daily production levels of 72,000 standard cubic metres per day (scm/d) until all data analysis is complete

·    Gas produced during the ramp-up period is estimated to be approximately 1,800,000 scm with 100% of this gas sold to BP Gas Marketing under the 18-month supply agreement

·    Detailed analysis of well data is currently underway with results expected within three weeks

·    Further upside potential at the Selva Malvezzi Production Concession (Figure 3), as Po Valley Energy, the operator, intends to advance other projects within the concession.

Mark Routh, Prospex's CEO, commented:

"I am very pleased that Po Valley Energy has completed the ramp-up and commissioning process at the PM-1 gas facility of the Selva field.  The final transition to ongoing production at PM-1 is underway which marks a major milestone for both Po Valley and Prospex.  The ongoing production from PM-1 is an outstanding platform from which the Joint Venture can actively pursue the exploration and development of nearby lookalike wells. 

"I would also like to take the opportunity to congratulate Po Valley Energy and their team on the ground, for the highly effective management of the start-up phase of the PM-1 gas facility during July.  The necessary and prudent data acquisition programme of downhole pressures and temperatures has been completed and will be analysed in order to develop the optimum ongoing production strategy. 

"We have now 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."

PVO announced early this morning that the ramp-up and commissioning phase of its PM-1 gas facility in the Selva Malvezzi Production Concession, located in the Po Valley plains of northern Italy, is complete.

The ramp-up and commissioning process progressed in a seamless manner and concluded with a scheduled three-day shut down and removal of memory gauges from the lower C2 production zone.  A slick line rig attended site during the last day of the shut-down period to complete this successful work programme with memory gauge removal and acquisition of pressure / temperature gradient data after which production at the PM-1 facility recommenced.

Analysis and understanding of data from the memory gauges removed from the well and pressure / temperature gradient are important data points for long term reservoir behaviour and determining associated production levels.  This data is being analysed in order to determine optimal and long-term production levels.  It is expected that this analysis will take approximately three weeks.  In the interim period, stable production at PM-1 will continue at approximately 72,000 scm/d.

Gas produced during the ramp-up period is estimated to be 1,800,000 scm, however, this amount is subject to final reconciliation with commercial stakeholders via standard commercial processes.  PM-1 sold 100% of this gas to BP Gas Marketing under the 18-month gas supply agreement (announced on 14 February 2023).

The ramp-up and commissioning at PM-1 incorporated steady increases in volume starting at ~35,000 scm/d moving to ~50,000 scm/d.  Thereafter, a step up in volume of 10,000 scm/d occurred on a weekly basis with production in the final week at ~80,000 scm/d prior to the scheduled three-day shut down.

With gas production commencing 4 July 2023 and ramp-up and commissioning concluding 4 August 2023, PVE and Prospex can look forward to initial gas production cashflows before the end of August 2023.

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.

* * ENDS * *

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:

Figure 1 - Podere Maiar - 1 Well Site

Figure 2 - Nitrogen and compressed air tanks

Figure 3: Selva Malvezzi Production Concession

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).

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/44VF02A

Glossary:

scm                        Standard cubic metres

scm/d                   Standard cubic metres per day

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.