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

 

27 May 2025

 

Prospex Energy PLC

('Prospex' or the 'Company')

 

Final Results for Year ended 31 December 2024

and

Notice of Annual General Meeting

 

Prospex Energy plc, an AIM quoted investment company, is pleased to announce its audited Final Results for the year ended 31 December 2024 (the "year-end") and Notice of the Annual General Meeting ("AGM") on 25 June 2025.

 

Corporate Highlights

·    At the end of 2024, the financial position of the Company had significantly strengthened with three revenue generating onshore natural gas investments situated in stable European countries - two in Spain and one in Italy.

·    A fundraise in August 2024 of £4.2m gross via the issue of 69,955,393 new shares at 6p each, was applied in the same month to acquire 7.5% of HEYCO Energy Iberia S.L. ("HEI"). HEI has majority ownership in the producing Viura gas field in northern Spain, now the Company's third producing asset.
14.473% of the net after-tax production income from the Viura gas field accrues to the Company's investment until completion of the drilling programme and payback of its initial capital investment plus a 10% preferred return, after which its share reverts to 7.2365%.

·    The results from the Viura-1B well, announced in December 2024, confirmed this investment decision. As this asset was acquired during the year, the fair value attributed to it is the actual amount invested at year-end, and it has not been revalued. 

·    During the year the Company expanded its activities into Poland, and created PXEN Tatra Sp. Z. o. o., a wholly owned subsidiary of Prospex, following its qualification to apply for onshore acreage hydrocarbon exploration licences in country.

·    Exemplary safety performance by our operators, contractors and partners with no lost time incidents and no environmental issues or events.

Financial Highlights

·    The Company recorded a loss for the year of £46,759 (2023: loss - £1,231,400), a 96% reduction on last year.  

·    The Company is reporting a 19.5% increase in shareholder equity (net asset value) at year-end of £4,013,106, to £24,590,154 (2023: £20,577,048).

·    The revaluation of investments at fair value resulted in an increase of 4.59% to £16,310,197 (2023: £15,594,931) and an unrealised gain of £713,583 (2023: unrealised loss - £469,709).

·    In March 2024, the Company made final settlement of all remaining interest-bearing debt and interest. No further debt finance was required or raised during the year.

·    Consistent with the Company's strategy, cash inflows from the Company's investment portfolio (which are received as loan repayments until repayment of capital and interest) were reinvested for growth, with further investment in all of the Company's assets during the year.

·    At year-end, the Company held cash and cash equivalents of £1,185,386 (2023: £3,186).

 

Post period highlights

·    On 15th April 2025, the Company's wholly subsidiary, PXOG Muirhill Limited, completed the acquisition of 100% of Tarba Energía S.L. ("Tarba") through the purchase of the entire shareholding held by Warrego Energy Pty Ltd ("Warrego") in Tarba (the "Warrego Shares").
The Company now owns a 100% indirect working interest in El Romeral asset and the Tesorillo and Ruedalabola exploration permits.

·    The Company has invested a further £903,000 in the Viura asset during 2025.

·    Both of the above were completed using the Company's existing capital resources.

·    The Company appointed Hannam & Partners ('H&P') as Joint Broker.

·    The management team has been strengthened with the appointment of Richard Jameson, as Chief Operating Officer.

 

Operational Highlights

Viura Field - Northern Spain

·    The Viura acquisition significantly increased Prospex's proven (2P) reserves by 6.5 Bcf (0.18 Bcm) net to Prospex.  Gross 2P remaining reserves at the Viura field is 90 Bcf (2.5 Bcm) and is expected to increase upon further evaluation of the newly drilled horizons.

·    Successful drilling and discovery of the Viura-1B well which reached its revised total depth in October 2024, encountering high-quality gas-bearing formations, including a new discovery in the previously unexplored Utrillas-B reservoir.  Further testing is planned for 2026.

·    Viura-1B was completed and tested with flow rates up to 500,000 scm/d (17.7 MMscfd), initiating production at 300,000 scm/d (10.6 MMscfd), significantly boosting Prospex's total gas output in December 2024.

·    Total natural gas produced from the Viura-1B well from start-up in December 2024 to the end of Q1-2025 was 30.2 MMscm = 1.1 Bcf (which is ≈ 4.4 MMscm = 154 MMscf net to Prospex).

·    Post Period the Company announced the temporary cessation of production of the new Viura-1B well due to a leak in the completion tubing.  The Operator is sourcing the necessary equipment including mobilising a suitable drilling rig in order to perform the workover by mid-June 2025.

·    Drilling Phase 2 wells Viura-3A and Viura‑3B is now anticipated in 2026.

El Romeral - Southern Spain

·    Ten year extension of the natural gas exploitation concessions at "El Romeral 1, 2 and 3" to July 2034.

·    Significant progress was made by the operator on the permitting process of the five new wells to be drilled on the concessions and the Environmental Impact Assessment.  It is anticipated that the drilling permits may be issued in 2025.

·    Potential connection and gas sales to Enagas Gas Grid, subject to the issue of the permits to drill the five new El Romeral gas wells.

Selva Field - Northern Italy

·    Strong production and revenues with gross gas production for 2024 totalling 27.5 million scm, with 10.2 million scm net to Prospex.  Gross revenue reached €10.3 million, with €3.8 million net to Prospex at an average realised gas price of €0.37/scm.

·    Average gross daily production increased steadily each quarter, ending the year at nearly 80,000 scm/day.  Quarterly net revenues to Prospex rose from €705,000 in Q1 to €1.25 million in Q4.

·    Extension of long-term gas sales contract with BP Gas Marketing ("BPGM"), originally effective from April 2024, was extended by 12 months in October.  A further renewal is anticipated by October 2025.

·    Drilling applications for four new wells in the Selva Malvezzi production concession were filed in Q3-2024 with the technical office of the Ministry of Environment and Energy Security.

·    Lifting of the inherent hydrocarbon exploration and extraction restrictions on the Plan for the Sustainable Energy Transition of Eligible Areas ("PiTESAI") has led to increased access for activities on the Selva Malvezzi Concession.

·    Approval for strategic 3D Seismic Campaign was obtained in January 2025, paving the way for four new planned wells.

 

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

"2024 was a year in which we made significant progress towards the development of our stated strategy - to become a mid-tier independent European energy producing group.  We are pleased to report a significant increase in net asset value by more than £4 million, underpinned by our growing portfolio of high-quality energy investments.  Ending the year debt-free, with more than £1.1 million in cash and financially self-sustaining on a business-as-usual basis, marks a key milestone for the business, enabling us to reinvest organically and strengthen our foundation for future growth from a far stronger balance sheet.

 

"The subsequent successful acquisition of Tarba Energía, and the increase of investment in the Viura asset, both completed with existing cash reserves, highlight our disciplined approach to portfolio development, supported by the continued confidence of our investors.  Looking ahead, we remain focused on both organic growth from our existing assets and the pursuit of new opportunities that meet our rigorous investment standards and look forward to a successful 2025."

 

 

Notice of Annual General Meeting

 

The Company also gives notice that its AGM will be held at Huckletree Bishopsgate, 8 Bishopsgate, London EC2N 4BQ, at 11.00 a.m. on 25 June 2025.

The Financial Results for the year ended 31 December 2024 together with the Notice of AGM will be available to download from the Company's website: https://prospex.energy/ and will also be posted to shareholders on or around 28 May 2025.

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:

 

Mark Routh	Prospex Energy PLC	Tel: +44 (0) 20 7236 1177
Ritchie Balmer Rory Murphy	Strand Hanson Limited	Tel: +44 (0) 20 7409 3494
Andrew Monk (Corporate Broking) Andrew Raca / Alex Cabral (Corporate Finance)	VSA Capital Limited	Tel: +44 (0) 20 3005 5000
Neil Passmore / Leif Powis	Hannam & Partners	Tel: +44 (0) 20 7907 8500
Ana Ribeiro / Charlotte Page	St Brides Partners Limited	Tel: +44 (0) 20 7236 1177

 

 

Prospex Energy Plc

 

Chairman's Report

for the year ended 31 December 2024

Prospex Energy is an AIM quoted company with a focus on European natural gas and electricity.  Several significant developments took place in 2024, and the stage was set for additional opportunities in 2025 and beyond.  At 31 December 2024, through its investments the Company has working interests in three producing natural gas fields, two in Spain - the Viura gas field and El Romeral, and one in Italy - the Selva Malvezzi concession, which during 2024 were operated by the Company's partners.  Two of these generated income throughout the year - electricity sales from its gas-to-power facility at El Romeral in southern Spain and natural gas sales from the Selva field in northern Italy.  This has enabled the Company's investment vehicles to reinvest for growth and to make partial repayments to the Company of their interest-bearing debt, being funds which were invested during the acquisition, exploration and development phases.  In August 2024, the Company acquired a 7.2365% working interest in the producing Viura concession in Northern Spain (14.473% until pay back of capital investment plus a 10% preferred return) and gas sales accrued to this investment from that date.  Income from Viura was and is being reinvested in further drilling at Viura until completion of the drilling programme in 2026.

Prospex Energy acquired its 7.2365% working interest in the Viura gas field by way of a 7.5% shareholding in HEYCO Energy Iberia S.L through its subsidiary PXOG Muirhill Ltd. including a share of 90 Bcf proven gas reserves and the Viura gas processing plant.

The Company also created an investment vehicle in Poland, PXEN Tatra Sp. Z o.o., which is 100% owned and during 2024 initiated applications for open-acreage exploration permits in that country.  These permits have not yet been awarded.

Operations in all the Company's investment portfolio were carried out with an exemplary safety performance by our operators, contractors and partners with no lost time incidents and no environmental issues or events.  The Company continues to monitor its Health, Safety and Environment ("HSE") performance by promoting a high level of HSE awareness and culture with its partners, operators and subcontractors.

In 2024, the financial position of Prospex Energy was significantly strengthened with production income from three onshore producing gas assets situated in two stable European countries.  All these assets have significant growth potential which will be realised with the successful completion of drilling programmes which are already well advanced in the permitting processes, comprising five wells at El Romeral, four wells at Selva Malvezzi and two wells at Viura.  The Viura wells are already permitted; the remaining nine drilling permit applications, at El Romeral and Selva, are expected to be received during 2025 or early 2026.  This puts the Company in the position to achieve significant growth from its existing production concessions on all three of its main investments.  The timing of these eleven wells is not certain and accumulated production income from its existing assets will be deployed to fund the drilling campaigns.  The Company will actively seek other sources of funding to grow the production asset base which may include debt finance, farm-out activity or portfolio rationalisation.

Final Settlement of Convertible Loan Note Debts

In March 2024, the Company settled the third and final capital repayment plus accrued interest on the Convertible Loan Notes issued in September 2022 from accumulated cash within the Company.  The convertible loans which were convertible at 5.5p per share of original aggregate value of £500,000 were issued to three individuals pursuant to a Convertible Loan Note Deed dated 2 September 2022.  In settlement of the third and final quarterly debt repayments, a total of £175,239 was paid to the three Convertible Loan Note holders being the capital repayment of £168,487 plus accrued interest to 31 March 2024 of £6,753.

Viura- through PXOG Muirhill and HEYCO Energy Iberia S.L.

In August 2024, the Company raised, in aggregate, gross proceeds of approximately £4.20 million via a Placing, Subscription and WRAP Retail Offer of 55,633,333 Placing and Subscription Shares and the 14,322,060 WRAP Retail Offer Shares, amounting in aggregate to the issue of 69,955,393 new Ordinary Shares at an Issue Price of 6 pence per share.  The WRAP Retail Offer, which was significantly oversubscribed, raised aggregate gross proceeds of £859,323. 

The gross proceeds from this fundraise enabled Prospex to acquire 7.5% of HEI.  This investment was closed on 19 August 2024.  HEI has majority ownership in the Viura gas field in northern Spain, owning 96.4865% of the Viura concession, its reserves, existing production and the surface facilities.  This translates to a Prospex Energy indirect ownership of 7.2365% in the Viura concession.  The investment was an important step in the development of the Company's strategy to become a mid-tier independent European energy producing group. 

 

Prospex Energy committed to fund 15% of the 2024-2026 HEI development programme for its 7.5% stake in HEI, however, this was not a standard "2:1 Promote" transaction.  Whilst Prospex is funding 15% of costs to earn 7.5% of HEI, the Company will be repaid its capital investment from 15% of the HEI production income (after OPEX and taxes), plus a 10% preferred return on its investment, until payback of both, at which point Prospex's share of net income reverts to 7.5%.

The Viura investment has increased the Company's proven reserves.  The Viura estimated 2P gross remaining reserves is 90 Bcf (2.5 Bcm) which is 6.5 Bcf (0.18 Bcm) net to Prospex.  The investment has not been revalued pending completion of the drilling programme and a new Competent Person's Report being prepared.

During 2024 Prospex invested ~£3.9million towards the Viura phase 1 development programme which included the Viura-1B well.  A further ~£903,000 has been invested during 2025, bringing the total invested in Viura by Prospex Energy at the date of this report to ~£4.8m.  The Viura Phase 2 development programme will be funded from net proceeds of Phase 1 production together with debt-finance, further investor contributions into HEI, or a combination of both.

Drilling of the Viura-1B well commenced on 22 June 2024.  On 21 October 2024, the Viura-1B development well successfully reached its revised targeted Total Depth ("TD") of 4,500 metres (≈4,100 meters True Vertical Depth ("TVD")) in the 6-inch hole section of the bottom 450 metres of the well. 

The Viura-1B well encountered the main Utrillas-A reservoir 50 metres higher than expected, with good quality reservoir rock and significant gas shows throughout drilling, and gas-bearing formations extending 30 metres deeper than nearby wells in the formation. 

With unanimous investor agreement, it was decided to drill the Viura-1B well deeper to evaluate the unexplored Utrillas-B formation, beneath the proven and producing Utrillas-A formation.  This resulted in the discovery of a new gas-bearing section in the Viura gas field.  Good gas shows and several potential reservoir formations were identified in this previously undrilled section and valuable new data was acquired.  Further testing of the Utrillas-B is planned during Phase 2 in 2026.

The total extra cost of deepening the well to appraise the Utrillas-B section was a gross cost of €2.5 million.  Prospex met its 15% share of the costs (€375,000) to deepen and complete the well from existing cash reserves.

In December 2024, the Company announced the results from drilling the Viura-1B development well.  Viura-1B was completed and tested, having achieved flow rates up to 500,000 scm/d (17.7 MMscfd), which was 72,000 scm/d (2.6 MMscfd) net to Prospex.  The Viura-1B well started production at an initial rate of 300,000 scm/d (10.6 MMscfd), which is 43,000 scm/d (1.5 MMscfd) net to Prospex, more than doubling the Company's share of production across all assets in December to ≈82,000 scm/d or ≈2.9 MMscfd.

Production facilities at the Viura gas plant, which is connected to the Spanish national grid network meant that gas produced during the testing phase was immediately processed and sold.

Subsequent to the reporting date, from January to March 2025, gross production rates reduced to an average of ≈248,000 scm/d (8.5 MMscfd), ≈35,893 scm/day (1.25 MMscfd) net to Prospex.

Included in Phase 1 was a workover to convert the suspended well Viura-3 into a water injection well which unfortunately was not successful. 

Post period end in April 2025 the field was shut-in to allow well workovers with production anticipated to recommence by mid-June 2025.

El Romeral - through PXOG Muirhill and Tarba Energía S.L

Ten-year Extension of Concessions

On 25 July 2024, the Spanish regulatory authority granted a ten-year extension of the natural gas production concessions - El Romeral 1, 2 & 3 owned by Tarba  Energía S.L. ("Tarba") to July 2034.  This enables electricity supply to the grid from the Romeral gas-to-power facility until at least July 2034, when the concessions may be extended for a further ten-year period.  Tarba's electricity production plant in Carmona near Seville was declared a Public Utility by the Andalusian Regional Government at the beginning of 2023 and is the only facility in Spain that converts electricity from natural gas at the same location as the gas is extracted from the subsurface.

Permitting Applications for five additional wells

Tarba Energía, the operator of the El Romeral asset has been working through the complex regulatory requirements in the application for permits to drill five additional wells and an Environmental Impact Assessment, believed to be the final step, was commenced in April 2025.  It is anticipated that the regulatory authorities will issue the drilling permits in 2025.

 

Potential Connection to Enagas Gas Grid and other Business Development

Furthermore, the El Romeral asset has the potential to sell gas directly to the Enagas operated national gas grid with a relatively short pipeline extension and tie-in, solar generation and battery storage and gas storage in existing depleted wells.  The first two projects, direct gas sales and solar expansion, have both been advanced as far as the Company will allow pending the permitting of the five further gas wells.  The permitting of these five El Romeral gas wells is expected in 2025 and applications for a further five wells will be submitted as soon as these are received.

Post Period Acquisition of Tarba Energía shares

On 15 April 2025 Prospex through its wholly owned subsidiary, PXOG Muirhill Limited, exercised a right of first refusal to acquire the shares of Tarba Energía that were not previously owned, thus bringing Prospex's interest in Tarba Energia to 100%.

Selva Malvezzi - through PXOG Marshall Ltd. and UOG Italia Srl.

Production and Revenues for 2024

The gross production from the Selva Malvezzi concession in 2024 was 27.5 MMscm of natural gas, 10.2 MMscm net to Prospex.  Gross revenue from the Selva Malvezzi concession in 2024 was €10.3 million, €3.8 million net to Prospex with the weighted average price for the gas sold of €0.37/scm.

The breakdown of production and revenue for the year is shown in Table 1.

PM-1 Production Data	Mar 2024 Quarter	Jun 2024 Quarter	Sept 2024 Quarter	Dec 2024 Quarter
	Q1-2024	Q2-2024	Q3-2024	Q4-2024
Average gross daily production rate (scm)	69,976	74,904	76,910	79,596
Quarterly net (37%) production (MMscm)	2.363	2.529	2.596	2.710
Weighted average price (per scm)	€ 0.30	€ 0.34	€ 0.39	€ 0.46
37% Revenue net to Prospex ('000)	€ 705	€ 855	€ 1,020	€ 1,250

Table 1.           Gas production and revenues from the Selva Malvezzi Production Concession in 2024

Approval of 3D Seismic Campaign

In January 2025, Po Valley Energy Limited (ASX: PVE) ("Po Valley Energy", "Po Valley", "PVE") successfully obtained regional approval ("INTESA") from the Emilia Romagna Regional Council to commence its works under the planned 3D‑seismic campaign.  This campaign covers the entire Selva Malvezzi Production Concession Area (the "Concession") and is an integral part of the ongoing development programme, which envisages the drilling of four new wells on the Concession, building upon the current Podere Maiar-1 well production.  Po Valley Operations Pty Limited ("PVO"), a wholly owned subsidiary of PVE, is the operator of the Concession (the "Operator"), has a 63% working interest, while Prospex has the remaining 37% working interest.  The granting of the Regional INTESA is an important step in the authorisation process, which will complete with the issuing of a formal decree from the Ministry of Environment and Energy Security once all documentation has been verified.  In anticipation of the INTESA, the Operator has completed all preliminary works in relation to the design, planning and permitting of the campaign.  With the grant of the INTESA, it has been possible to commence the formalisation of the permitting and agreements with landowners.  As part of these preparatory activities, the Operator participated in constructive co-ordination meetings with the relevant farmers associations and has worked closely with relevant representatives to ensure that all the planned activity aligns with industry best practices.

The nature of the 3D seismic campaign and the technology that will be used is purposefully designed to ensure that the environmental footprint is negligible and can be carried out quickly.  The campaign is expected to take no more than three weeks. 

Once the seismic data has been acquired, the dataset will be processed and interpreted in-house with the aim of optimising the subsurface drilling locations targeted by the planned four new wells on the Concession.  The Environmental Impact Assessment to obtain the permits to drill these four new wells was lodged with the Ministry of Environment and Energy Security on 24 December 2024.

Preparation for the 3D geophysical survey acquisition on the Selva Malvezzi Production Concession was significantly progressed during Q4‑2024.  All environmental approvals have been received, and planning and permitting is well advanced.

 

Gas Sales Contract with BP Gas Marketing

In February 2023 Po Valley Operations Limited ("PVO"), the operator of the Selva Malvezzi production concession, in which Prospex has a 37% working interest, signed an 18-month gas sales contract with BP Gas Marketing ("BPGM") to commence on 1 April 2024 with potential to extend, on behalf of the Joint Venture.  This contract was extended for a further 12-months in October 2024.  The joint venture is confident that the BPGM contract will be renewed before October 2025.  The gas supply price is linked to Italy's "Heren PSV day ahead mid" price assessment.

In January 2024, after six months of strong gas production, PVO confirmed that the PM-1 well was continuing to perform as expected.  The commissioning and testing period undertaken by PVO defined the optimal well performance and confirmed the optimum flow rates from the well to ensure no debris accumulation and to establish the most efficient rate of production for the long term.  As a precaution, a Surface Sand Detector was installed which provides added protection to the gas plant.  The operator continued to build on the upside potential of the Selva Malvezzi production concession , by  progressing agreements with local landowners and advancing the permitting process with the regulatory authorities in order to deliver the drilling programmes at Selva North, South and East and Riccardina.

Lifting of restrictions on the PiTESAI

In May 2024, the Italian authorities lifted the inherent hydrocarbon exploration and extraction restrictions on the Plan for the Sustainable Energy Transition of Eligible Areas ("PiTESAI").  This was officially confirmed in June 2024.  This resulted in increased access for activities on the Selva Malvezzi Concession, meaning that East Selva may now be drilled from an optimum location, no longer requiring a highly deviated well thereby reducing risk and cost.  The improved regulatory environment and geopolitical landscape in Italy, resulted in a reform of the permitting process and schedules allowing the operator, PVO, to apply for the permitting of four wells on the concession targeting increased future revenues.

Onshore Licence Applications in Poland - through PXEN Tatra Sp. Z o.o.

In March 2024, Prospex registered a wholly owned subsidiary company called PXEN Tatra Spółka Z Ograniczoną Odpowiedzialnością ("PXEN Tatra") or PXEN Tatra Sp. Z o. o. (which translates to PXEN Tatra Limited Liability Company).  The company has been named after the Tatra National Park and the Tatra Mountain range in southern Poland, which form a natural border between Slovakia and Poland.  PXEN Tatra is 100% owned by the Company.  

On 21 May 2024, PXEN Tatra applied to the regulator in Warsaw for pre-qualification to apply for and operate Polish exploration licences.  Pre-qualification involves demonstrating the technical and financial capacity to own licences and is a necessary step prior to any licence application.  On 3 October 2024 PXEN Tatra officially secured this qualification, and applications for licenses were immediately submitted.

The Company has identified and hopes to acquire prospective blocks in Poland, which meet its 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.  Details of the new licence areas applied for will be made public when the official applications are publicly gazetted after the submission to the Ministry of Climate and Environment.  The licence applications have been submitted based on a 100% initial working interest.  The award of the blocks will be based upon the proposed geological and geophysical work programmes and the work commitments. 

Marking a potential entrance to develop onshore natural gas in a third European nation, the reasons for choosing to expand into Poland, include the favourable regulatory environment and prospective hydrocarbons, but also importantly the Company's previous experience in country.  Poland is well known for its hydrocarbon resources and has a regulatory regime which is supportive of natural gas investment with a track record in quickly approving permits for hydrocarbon exploitation activities as the nation focusses on its security of energy supply.  The Prospex senior team has valuable prior exploration experience in Poland and is very familiar with the regional geology and importantly, the regulatory environment.  Throughout its prior operations in Poland during 2016, Prospex met all local regulatory commitments, which puts the Company in a good position to leverage the experience and relationships gained at that time.  It is also important to note that Poland has a well-established petroleum service infrastructure in Country for any drilling operations to draw on. 

In order to manage the applications, in April 2024 PXEN Tatra engaged an experienced Country Manager in Poland.  Prospex already has a consultant Reservoir Geologist based in Poland who is an integral part of Prospex group's technical team, so this natural expansion of the team ensures that the Company can manage operations effectively.

Post period end:

El Romeral 5-well permitting

In February 2025, the Spanish Ministry Initiated the Statutory Environmental Impact Assessment ("EIA") Consultation and Public Gazetting of Statutory EIA Consultation with respect to the application for permitting to drill five further wells on El Romeral Production Concessions.  The five wells are planned to target the five optimum structures on the El Romeral concessions, which will produce biogenic natural gas from shallow subsurface horizons.  The depth of the wells average about 700 metres and will each take no longer than 3-4 weeks to drill once a suitable drilling rig has been mobilised.  No objections have been received from the public and statutory consultees on the Environmental Impact Assessment to drill the five wells on the El Romeral concessions.

Tarba submitted the EIA to Spain's Ministry for the Ecological Transition and the Demographic Challenge (the "Ministry") in Madrid in May 2024 prior to confirmation that the El Romeral Concessions were granted an extension for 10 years until July 2034.

El Romeral Transformer Replacement

On 11 January 2025, the main 9MW transformer at the El Romeral plant which exports the generated electricity to the national grid failed, resulting in the shutdown of the plant which occurred safely and with no harm to personnel or other equipment.  The local team of the Tarba Energía operator rented a replacement transformer which was successfully installed and electricity generation re-started on 1 February 2025.  The original transformer which was more than 22 years old and its repair was deemed uneconomic has been sold for its inherent scrap value.  The new rental transformer is a higher specification at 16-20 MW and will be replaced by a new appropriately sized transformer in due course.

100% acquisition of Tarba Energía

On 15 April 2025 Prospex through its wholly owned subsidiary, PXOG Muirhill Limited ("Muirhill") completed the acquisition of 100% of Tarba Energía S.L. ("Tarba") through the purchase of the entire shareholding held by Warrego Energy Pty Ltd ("Warrego") in Tarba (the "Warrego Shares") (the "Acquisition").  This opportunity arose because Warrego had received and accepted an offer for its shares from a third party which Prospex had a right to match and pre-empt.

As a result of this acquisition, Prospex now owns a 100% indirect working interest in both the El Romeral asset and the Tesorillo and Ruedalabola exploration permits located in the Cadiz province of southern Spain.

Under the terms of the Acquisition, Muirhill has paid to Warrego €562,725 of the total consideration of €662,725.  The balance of €100,000 is payable upon securing drilling permits.  The Acquisition was funded entirely by the Company's existing capital resources.

It represents a highly competitive acquisition price equating to US$0.016/mcf or US$0.092/Boe and has the potential to increase significantly the production and revenues on the El Romeral concession once the permits to drill the five new wells are approved

 

Preparation of consolidated financial statements

Prospex Energy Plc is an Investment entity as defined by IFRS 10, as such the results of its subsidiaries are not consolidated up to the parent company.  These financial statements therefore represent the financial position of the Company on a standalone basis, and the Company's investments in its subsidiaries, joint ventures and underlying assets are recognised at fair value through profit and loss.  

Financial Review

The Company recorded a loss for the year of £46,759 (2023: loss - £1,231,400).

The current year's loss includes an unrealised gain on revaluation of investments of £713,583 (2023: unrealised loss £469,709).

Administrative expenses increased by £150,939 (13.6%) to £1,263,452 (2023: £1,112,513).
Net finance income increased by £335,507 to £614,433 (2023: £278,926).

The Company is reporting an increase in shareholder equity (net asset value) at 31 December 2024 of £4,013,106, to £24,590,154 (2023: £20,577,048).

Total Assets increased by £3,958,557 to £25,757,867 (2023: £21,799,310). 
The increase is primarily attributable to the investment in Heyco Energy Iberia, operator of the Viura asset, via the Company's wholly owned investment vehicle, PXOG Muirhill Limited.  As this asset was acquired during the year, the fair value attributed to it is the actual amount invested at year-end.  The Company has invested a further £903,000 in the Viura asset subsequent to the year-end.

Total Liabilities decreased by £54,549 to £1,167,713 (2023: £1,222,262).
This is comprised primarily of provision for deferred tax.

The revaluation of investments at fair value resulted in an increase of 4.59% to £16,310,197 (2023: £15,594,931) and the unrealised gain of £713,583 (2023: unrealised loss - £469,709).

This unrealised gain comprises the change in the fair value of the Company's wholly owned investment vehicle, PXOG Marshall Limited, which directly and indirectly owns 37% of the Selva Malvezzi concession in Italy.  The change takes into account the reduction in remaining reserves from 2024 gas production, interest payable to the Company on its loans, and deferred taxes, offset by a reduction in the liability of PXOG Marshall to the Company through loan repayments made during 2024. 

The Italian asset has been re-valued on a methodology consistent with that used in prior years audited financial statements, updated to reflect underlying future gas pricing based on the benchmark Title Transfer Facility ("TTF") European forward contract gas prices applicable at 31 December 2024. 

 

At 31 December 2024, the Company held cash and cash equivalents of £1,185,386 (2023: £3,186).

Amounts owed to the Company by its investment vehicles earn interest and are repaid out of surplus funds arising from after-tax net earnings in the underlying undertakings.  Where appropriate, surplus funds within the investment entities are reinvested, at the direction of the Company, to develop and diversify the underlying assets.

The strengthening of the Company's balance sheet during the year was a result of a combination of factors including the investment in the Viura asset, receipt of loan repayments from the Company's wholly owned investment vehicles, and the conversion or repayment of the Company's own remaining interest-bearing debt.  The Company has no remaining debt and no further debt finance has been required or raised.

Business Development

During 2024, Prospex continued to evaluate potential deals or farm-in opportunities.  The Prospex technical team undertook in depth evaluations on a number of potential opportunities and importantly recommended that the Board should progress to participate in the Viura producing natural gas asset in northern Spain.  Results to-date at Viura have confirmed this investment decision and established the potential for significant additional upside in the near future.  The technical team's input was also integral to the decision to register as an Operator and apply for exploration licenses in Poland.

The Company continues its strategy of as far as possible reinvesting the investment returns within its investment vehicles for growth.  This enables the Company to minimise its need to raise funds externally, and when it does so, ensure that the funds so raised are invested directly into growing the value and diversification of the investment portfolio.

The Company continues to focus on onshore natural gas and power assets in Europe.  The Company's leadership continues to have confidence that this geographical and product focus is an essential ingredient to setting Company strategy and defining the boundaries within which we operate. 

Management and Staff

Subsequent to the reporting date, in April 2025, a new senior member of staff Richard Jameson was appointed to the Company's executive management team as Chief Operating Officer.  Richard is already a shareholder of the Company, having supported the Company in several funding rounds and brings to the Company many years of technical experience at senior levels in the oil and gas sector.

The Company benefits from an exceptional team of geologists and technical specialists with experience and knowledge in Italy, Spain and Poland and who engage constructively with the Company's partners.  Each team member is highly skilled and energetic in pursuing business development opportunities which fit the Company's rigorous investment criteria.

Outlook

The Board is satisfied with the progress made during the year under review and the prospects for the future, with a number of significant activities to be undertaken in each area of operations, subject to regulatory approval.  The Company's net asset value, of which its portfolio of investments is the most important part, grew significantly during 2024.  Additionally, the Company ended the year debt-free, self-sustaining on a business-as-usual basis, and continues to actively reinvest funds generated within the Company's investment portfolio for growth.  This has continued post year-end with the acquisition of Tarba Energía and the further investment in the Viura asset.

Additional funding obtained from the Company's investors in August 2024 was successfully applied in the Company's acquisition of the Viura asset.  Your board of directors and indeed the entire staff, are extremely appreciative of the trust and confidence placed in us.  On behalf of the entire team, I thank all investors, both long term and those who have recently joined, for their support.  Our unwavering focus is the continued growth of the value of the Company in terms of net assets and cash generation through production of natural gas and electricity.

Having further strengthened the balance sheet during 2024, this growth will be both organic, with prospects for increasing the output and diversification of existing assets and external, with the active pursuit of new assets which meet the Company's discerning investment requirements, to add to the portfolio. 

The Board is always conscious of the Company's responsibilities as thoughtful investors in the energy sector and proud of the contribution its investments make to Europe's overall energy requirements.

 

 

Bill Smith

Non-Executive Chairman

22 May 2025

 

 

Prospex Energy Plc

Statement of Profit or Loss and Other Comprehensive Income

for the year ended 31 December 2024

 

		2024		2023
	Notes	£		£
Other operating income	5	-		36,936
Administrative expenses		(1,263,452)		(1,112,513)
Share-based payment charges		(96,388)		(296,191)
OPERATING LOSS		(1,359,840)		(1,371,768)
Gain/(loss) on revaluation of assets	12	713,583		(469,709)
		(646,257)		(1,841,477)
Finance income	7	621,486		519,982
Finance costs	7	(7,053)		(241,056)
LOSS BEFORE INCOME TAX	8	(31,824)		(1,562,551)
Income tax	9	(14,935)		331,151
LOSS FOR THE YEAR		(46,759)		(1,231,400)
LOSS PER SHARE	10
Basic loss pence per share		(0.01)p		(0.41)p
Diluted loss pence per share		(0.01)p		(0.41)p