Prospex Energy PLC Production Update from El Romeral Power Project (9288D)
March 08 2022 - 1:00AM
UK Regulatory
TIDMPXEN
RNS Number : 9288D
Prospex Energy PLC
08 March 2022
Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and
Gas
8 March 2022
Prospex Energy PLC
('Prospex' or the 'Company')
Update on Production from El Romeral Power Project
Prospex Energy PLC, the AIM quoted investment company focused on
European energy projects, is pleased to provide an update on the
production strategy from its El Romeral power project near Carmona
in Southern Spain in which the Company holds a 49.9% working
interest through Tarba Energía S.L. ("Tarba").
Considering the recent energy shortfalls being experienced
across Europe, the owners of Tarba (Prospex and Warrego Energy
Limited) have temporarily agreed to operate the power plant 24
hours per day for six days per week from 4 March 2022 until 15
March 2022 at which point the reservoir performance and the
operating regime will be reviewed.
Recently, revenues generated by the plant have been at an
all-time high as a result of the current electricity prices.
Switching to almost continuous operations will further boost
revenue.
This has been made possible as a direct result of the successful
plant automation work completed at the end of 2021. The automation
of the power-plant has enabled 24/7 production and therefore an
ability to produce at times of peak demand, regardless of day or
time.
The price of electricity in Spain remains at unprecedently high
levels and is currently more than six-times what it was in March
2021 when the El Romeral power-plant was acquired.
Currently Tarba has cash in hand of more than EUR450,000. In
January and February 2022 monthly income from power generation was
EUR285,125 and EUR262,974 respectively.
A reservoir modelling project to history-match and forecast gas
production profiles from the El Romeral concession is nearing
completion. Tarba's management team intend to move to continuous
daily gas production and generate electricity from the plant 24
hours per day as soon as results from the study indicate that it is
prudent to do so. Any change in the production regime will be
carried out subject to the safety of personnel, and as permitted by
the operational condition and maintenance requirements of the
facilities.
Continuous operations will also optimise reservoir management
because a constant flow of gas from a gas well is preferable to
shutting in production several times a week. Generator efficiency
will also benefit from 24/7 operations.
Further additional production capacity exists if new wells can
be drilled on the concessions to increase gas production. Tarba
applied for permits to drill several infill wells in September 2021
and continues to pursue the consent of the regulatory authorities
which is expected later this year.
Mark Routh, Prospex's CEO, commented:
"Before switching to continuous plant operation which has been
made feasible by the plant automation project which completed in
December 2021, it is essential that safe and reliable operating
procedures and systems are tested and proven. It was also crucial
that a reservoir modelling history matching and production
forecasting study was undertaken to ensure that moving to
continuous operations would not jeopardise gas production. When the
results of this study are known I believe that a move to 24/7
operations is not only beneficial but prudent."
"It is extremely satisfying that Prospex, through its ownership
of Tarba, is now able to increase its electricity output at a time
when security of energy supply is so important to us all. I accept
that it is a small contribution but our generation capacity could
be increased five-fold by receiving permissions to drill our
planned infill wells, the first two of which are to be drilled into
proven discoveries."
"The extra income generated from the new production regime and
the current forward curve electricity prices puts Prospex in a very
healthy position for further growth opportunities."
"I expect to be sharing further updates 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:
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
Lucy Williams Limited 9797
Susie Geliher St Brides Partners Tel: +44 (0) 20 7236
Ana Ribeiro Ltd 1177
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 El Romeral and Tarba
The El Romeral gas and power project in Spain, with gas
production wells supplying gas to an 8.1MW power plant near Carmona
in Southern Spain is owned and operated by Tarba. It is currently
operating at about 20% of its full capacity because Tarba is
waiting on permits to drill further infill wells on the concessions
to increase production. Prospex owns a 49.9% working interest in
the El Romeral project via Tarba. The remaining 51.1% working
interest is owned by Warrego Energy Limited (ASX:WGO). Tarba sells
electricity generated from the plant on the spot market in Spain.
Current spot market prices have reached all-time highs in recent
months. The El Romeral licences comprise three contiguous
production concessions.
The updated Corporate Presentation for Q1-2022 is available on
the Company's website at https://bit.ly/3G6JtCm .
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