TIDMPXOG
RNS Number : 3106P
Prospex Oil and Gas PLC
07 February 2019
Prospex Oil and Gas Plc / Index: AIM / Epic: PXOG / Sector: Oil
and Gas
7 February 2019
Prospex Oil and Gas Plc ('Prospex' or the 'Company')
Selva Gas Field, Onshore Italy
Maiden Gas Reserves for Prospex
Highlights:
-- Gross 2P reserves of 13.3 billion cubic feet ('bcf') assigned
to Selva Gas Field in northern Italy by independent geophysical
services consultancy, CGG, representing the Company's maiden
reserves via its 17% interest
-- Equates to 2.26 bcf of net 2P reserves attributable to
Prospex's 17% interest in the Podere Gallina Exploration Permit
-- Reclassification of gross contingent resources follows
successful drilling and testing of Podere Maiar well ('PM-1') in
January 2018
-- Selva is due to commence production in 2020 at a gross rate
of up to 150,000 cubic metres per day
-- Reserves are subject to the award of a Production Concession,
for which preliminary approval has been granted
-- Combined additional prospective resources of up to 50bcf
(100% best case) with 30-34% chance of success estimated for East
Selva and Fondo Pierino prospects on Podere Gallina
Prospex Oil and Gas Plc, the AIM quoted investment company, is
pleased to announce gross gas reserves ('2P') of 13.3 bcf for the
Selva Malvezzi Gas Field ('Selva') in northern Italy, representing
the first reserves for Prospex. This follows the successful
drilling and testing of the Podere Maiar 1 well in 2018 which
informed a reclassification of previously reported gross contingent
resources ('2C') by independent geophysical services consultancy,
CGG Services (UK) Limited ('CGG') via a Competent Persons Report
(CPR) for the co-venturers in Selva. Selva sits within the 331km(2)
Podere Gallina Exploration Permit (the 'Podere Gallina') in the Po
Valley region of Italy. Prospex holds a 17% interest in Podere
Gallina, equating to net 2P reserves attributable to the Company of
2.26 bcf for Selva.
Selva Gas Field Reserves
Selva Gas Field Reserves
(bcf)
February 2019
---------------- -----------------------------
1P 2P 3P
---------------- ---------- -------- -------
Gross 4.1 13.3 29.8
Net to Prospex 0.697 2.26 5.1
---------- -------- -------
Additional Prospectivity at Podere Gallina
Additional prospects have been identified within Podere Gallina,
including the Selva East, Selva South Flank, Fondo Pierino and
Riccardina structures. The gross prospective resources are
tabulated below:
Gross un-risked prospective
resources bcf (100% best
estimates)
Prospect Best Chance of Success
------- ---------------------
Selva East 34.8 30%
------- ---------------------
Fondo Pierino 14.6 34%
------- ---------------------
Cembalina 3.3 51%
------- ---------------------
Selva South To be determined in Q2 2019
Flank
------------------------------
Riccardina To be determined in Q2 2019
------------------------------
All the above structures are located within the Production
Concession licence application area (the 'Production Concession').
Following the anticipated final grant of the Production Concession,
East Selva will be a priority for drilling. The chances for success
at East Selva were significantly upgraded to 30% following the
successful PM-1 well.
Prospex non-executive Chairman, Bill Smith, said, "Our 2.26bcf
share of the Selva Gas Field's reserves represents another first
for Prospex. While bringing the Bainet gas field in Romania online
generated our first production and revenues in 2018, Selva is the
first time that valuable reserves have been assigned to one of our
projects by an independent third party. Not only is this a major
milestone for the Company, it provides Prospex with significant
asset backing, particularly when compared to our current market
valuation of approximately GBP3.3m.
"In a short space of time, Prospex has been transformed from an
investment company with a growing portfolio of interests in late
stage European onshore projects, to one that is asset-backed and
cash flow generative. Thanks to an inventory of multiple targets
across our existing portfolio, including the up to 2 Tcf Tesorillo
Gas Project in southern Spain and a further 50bcf of prospective
resources identified in Italy, we are well placed to build on our
success to date, particularly as, in line with our investment
criteria, all our projects hold historic discoveries and are
located close to producing fields. I look forward to providing
further updates on our progress, as we focus on closing the
disconnect between our share price and the value of our
portfolio."
Further Information
The Selva gas field sits within the Podere Gallina Exploration
Permit and was a significant historical producer for Eni S.p.A,
producing 2,380 MMscm (84 bcf) from 24 wells between 1956 and 1984.
Podere Maiar was drilled in Q4 2017 into Selva and during testing,
peak flow rates of 148,136 scm/day (5.2mmscf/d) on a 3/8 inch choke
and 129,658 scm/day (4.6 mmscf/d) on a 3/8 inch choke were recorded
from the C1 and C2 reservoirs respectively.
The proposed development of Selva centres on the installation of
a fully automated gas plant at the existing Selva/Podere Maiar-1d
appraisal/redevelopment well site. Based on dynamic reservoir
studies, phase one is targeting daily production at a rate of up to
150,000 cubic metres (5.3 mmscf/d) from two gas-bearing reservoirs,
C1 and C2, in the Medium-Upper Pliocene sands of the Porto
Garibaldi formation. In addition, a 1km long pipeline will be laid
to connect the plant to the Italian National Grid.
A further phase of the development is planned, which is
contingent on the results of a planned 3D seismic acquisition
programme (subject to JV approval) and involves the drilling of
additional wells to significantly expand the Production
Concession's natural gas resource base. Drilling will target
prospects including Selva East and Selva South Flank which fall
within the Production Concession area. Final approval from the
Italian Government is subject to customary regulatory processes
being completed, including the approval of an Environmental Impact
Assessment.
The Italian Ministry has confirmed that recent government
amendments to energy policy will not affect the approval processes
for Selva, which continues to progress through the normal approval
procedures. In January 2019, the Italian Government granted the
Selva Field a preliminary award for the Production Concession and
Selva remains on course to commence first production in 2020.
CGG has given its consent to the reference to its CPR and its
contents in this announcement. The CPR conforms with the guidelines
and definitions of the Petroleum Resources Management Systems (2007
and 2011). CGG confirms it has reviewed this announcement and
confirms that the estimates have been correctly extracted from the
CPR. The CPR has been signed by Andrew Webb who has over 30 years
of relevant experience in the oil industry and is a member of the
Society of Petroleum Engineers.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
* * ENDS * *
For further information visit www.prospexoilandgas.com or
contact the following:
Edward Dawson Prospex Oil and Gas Plc Tel: +44 (0) 20 3766
0325
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Jack Botros
Duncan Vasey Peterhouse Corporate Finance Tel: +44 (0) 20 7469
0932
Frank Buhagiar St Brides Partners Ltd Tel: +44 (0) 20 7236
Priit Piip 1177
Notes
Prospex Oil and Gas 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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