TIDMPXEN
RNS Number : 7723Z
Prospex Energy PLC
27 January 2022
Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and
Gas
27 January 2022
Prospex Energy PLC
('Prospex' or the 'Company')
Update on the Selva Field Development in Italy
Highlights
-- Production Concession for Selva Malvezzi expected at the end of March 2022
-- Po Valley Energy, the operator, starts and fully funds the
installation of the seismic monitoring network to be operational
ahead of the 12 months required by the regulators
-- First gas production estimated by Q1 2023
-- Prospex remains fully committed to increasing its stake to 37% in the Selva gas field
Prospex Energy PLC,) the AIM quoted investment company focused
on European gas and power projects, provides an update on the Selva
field development project in Italy, in which the Company currently
holds a 17% working interest in the Podere Gallina licence through
its wholly-owned subsidiary PXOG Marshall Limited ('PXOG') with the
Selva Malvezzi concession contained in this licence.
On 10 August 2021 the Company announced the conditional
acquisition of a further 20% of the Podere Gallina licence from AIM
quoted United Oil and Gas plc (AIM:UOG) ("UOG") and UOG Holdings
plc (a wholly-owned subsidiary of UOG) by way of a corporate
transaction of 100% of UOG Italia S.r.l. ("UOG Italia") which has a
20% working interest in the Podere Gallina licence. UOG Italia is a
wholly-owned subsidiary of UOG Holdings plc. Under the terms of the
Sale and Purchase Agreement with UOG, the long-stop date by which
the transaction should complete has been extended by mutual consent
from 7 March 2022 to 6 April 2022.
Production Concession Progress
On 21 January 2022, the operator, Po Valley Energy (ASX:PVE)
('Po Valley') advised the Joint Venture partners that the INTESA
(the agreement) for the Selva Malvezzi concession has been sent by
the Ministry for Ecological Transition ('MITE') to the Emilia
Romagna Region (the Regional Government). This is the pre-award for
the intergovernmental agreement and is the penultimate step for the
approval of the Production Concession which Po Valley is expecting
at the end of March 2022. Once the Production Concession is awarded
the field development project activity can commence. The target for
first gas is Q1-2023.
Environmental Monitoring and Funding by Po Valley
After the production concession is granted, before any gas may
be extracted from the Selva field, there is a regulatory
requirement to establish a 12-month baseline of local seismicity to
ensure that any gas extraction from the area does not lead to
increased local seismic activity.
The operator, Po Valley, has this week completed the drilling of
three shallow monitoring boreholes, one at 141 metres and two
shallower boreholes at 10 metres. By the end of this week the
second 140 metre borehole will be completed and equipped with
piezometers. The water level transducers and settlement gauges will
be installed on 28 January 2022. The supply and installation of
transducers and datalogger are planned for 14 February 2022. On 26
January civil works for the seismic stations commenced and the
seismic monitoring network is expected to operational by 15
February 2022.
This work has been started and funded 100% by Po Valley earlier
than the required 12 months and in advance of the award of the
Production Concession at which time it becomes a firm commitment
which all Joint Venture Partners have agreed to fund. The Joint
Venture partners, PXOG and UOG have agreed to fund their share of
this work and all development costs when the Production Concession
is awarded. Po Valley has advised PXOG and UOG that failure to fund
any commitments under the Joint Operating Agreement when they
become due could be construed as notification to relinquish the
licence. Po Valley has indicated it wishes to take over the
partners' participating interests, however, the Joint Venture
partners refute that Po Valley has the right to do so and do not
intend to relinquish their interest in the Licence and have
informed Po Valley accordingly. Further updates will be made in due
course.
SNAM tie-in Contract
On 10 December 2021, the operator, Po Valley advanced a
refundable bond payment to Snam Rete Gas S.p.A. ("SNAM") of
EUR757,000 on behalf of the Podere Gallina Licence Joint Venture
group, in order to confirm a contract with SNAM for the
construction of a delivery point from the suspended gas well Podere
Maiar ("PM-1") of the Selva field to the SNAM gas grid network.
Prospex, on behalf of PXOG has undertaken to pay PXOG's 17% share
of the SNAM EUR757,000 refundable bond payment to PVO (EUR128,690)
within 21 days of written confirmation by MITE of the award of the
Selva Malvezzi Production Concession.
Mark Routh Prospex's CEO commented:
"We are working with Po Valley to achieve first gas from Selva
as soon as possible, but with no guarantee on the timing of the
Production Concession award, any funding of development activity
prior to award is premature. However recent events are positive,
and we are now seeing the final steps towards the granting of the
Production Concession.
"We are very excited that we are making encouraging progress
towards gas production at Selva which will be a transformational
asset for Prospex. We fully intend to complete acquisition from UOG
and look forward to further activity on the wider Podere Gallina
licence in the future."
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
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Colin Rowbury Novum Securities Limited Tel: +44 (0) 20 7399
Jon Belliss 9427
Duncan Vasey Peterhouse Capital Tel: +44 (0) 20 7220
Limited 9797
Susie Geliher St Brides Partners Tel: +44 (0) 20 7236
Ana Ribeiro Ltd 1177
Notes
About Selva:
The Podere Gallina Licence is in the Po Valley region of Italy.
The licence contains the currently shut--in Selva gas-field as well
as exciting exploration opportunities. The Podere Maiar-1 well was
completed in December 2017 and successfully found a commercial gas
accumulation updip of the previous wells on the Selva field. The
Company currently has as 17% working interest in the Podere Gallina
licence. The Company announced on 10 August 2021 the conditional
acquisition of a further 20% of the Podere Gallina licence from
UOG. Subject to securing funding Prospex is set to increase its
working interest to 37% in Q2 2022.
The Podere Gallina Licence holds independently verified 2P gross
reserves of 13.4 Bcf (5.0 Bcf net to Prospex at 37% WI), gross
Contingent 2C Resources of 14.1 Bcf (5.2 Bcf net) and a further
91.5 Bcf of gross Best Estimate Prospective Resources (33.9 Bcf
net).
[ Source : CGG Services (UK) Limited Competent Persons Report -
January 2019 https://bit.ly/3nZNfYf ].
The updated Corporate Presentation for Q1-2022 is available on
the Company's website at https://bit.ly/3G6JtCm .
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END
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