Prospex Energy PLC Completion of Acquisition of Gas & Power Project (6048Q)
March 01 2021 - 01:00AM
UK Regulatory
TIDMPXEN
RNS Number : 6048Q
Prospex Energy PLC
01 March 2021
Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and
Gas
Prospex Energy PLC ('Prospex' or the 'Company')
Completion of Acquisition of El Romeral Gas & Power Project
in Spain
Highlights
-- Completion of acquisition of a 49.9% interest in El Romeral
gas and power operation in Spain - includes three producing wells
and 8.1 MW power station
-- Significant potential to increase gas production and electricity generation at El Romeral
-- El Romeral complements existing portfolio of onshore European
gas projects which includes Selva field in Italy where first gas is
expected in 2021
Prospex Energy PLC, the AIM quoted investment company focused on
European gas and power projects, is pleased to announce the
completion of the acquisition (the 'Acquisition') of a 49.9%
interest in El Romeral, an integrated gas production and power
station operation in southern Spain ('El Romeral' or the
'Project'). El Romeral, which includes three producing wells that
supply gas, through its own network, to a 100% project-owned 8.1 MW
power station, has been acquired by Tarba Energia ('Tarba').
Prospex owns a 49.9% interest in Tarba B shares with its partner
Warrego Energy Limited owning the balance.
Following the completion of the Acquisition, Tarba has assumed
the day-to-day management and control of the Project and will look
to implement a number of short-term operational enhancements and
efficiencies.
The medium-term target at El Romeral is to increase on site gas
production and, in turn, electricity generation at the Project's
power plant towards its nameplate capacity from the current 22%
level. Historically, the power station at El Romeral regularly
produced c. 60,000 Mwh per annum when gas was not a limiting
factor. In the medium to long-term, Tarba expects on site gas
production can be increased via the drilling of new wells targeting
already identified development locations and very-low risk
prospects which have been assigned gross contingent and prospective
gas resources of 5billion cubic feet ('Bcf') and 90Bcf,
respectively. Tarba will also carry out a review of existing wells
to evaluate the potential to enhance production rates via
workovers.
Prospex non-executive Chairman, Bill Smith, said, "El Romeral
adds to our portfolio three producing gas wells and an operating,
but underutilised, 8.1 MW power station, which cost EUR10 million
to construct. For a net consideration of EUR375,000, the
Acquisition, in our view, represents excellent value. El Romeral
however was not just acquired for the value on offer but also for
the potential to add value. Specifically, increasing operations at
the power plant to 100% capacity from the current 22% level could
generate annual revenues of c. EUR4 million. Being operationally
geared, a high proportion of these revenues will flow through to
the bottom line. To reach this level of revenue generation, an
increase in on site gas production is required. Two development
locations with gross contingent resources of 5Bcf and 11 prospects
with 90Bcf of gross un-risked prospective resources provide
multiple, low risk opportunities to achieve this. A path to value
creation at El Romeral is in place.
"Thanks to both the existing operations and the considerable
development potential, El Romeral provides significant asset
backing to Prospex Energy, and that is before our interest in the
Selva gas field on the Podere Gallina permit in Italy is taken into
account. Selva is expected to commence production at an initial
rate of up to 150,000 scm/day later this year. As a result, it is
not just El Romeral that is both a value and growth play, but
Prospex Energy itself. With this in mind, I look forward to
providing further updates on our progress as we focus on realising
the underlying value and potential of our asset base."
This announcement contains inside information.
* * ENDS * *
For further information visit www.prospexoilandgas.com or
contact the following:
Edward Dawson Prospex Energy PLC Tel: +44 (0) 20 3948
1619
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Jack Botros
Colin Rowbury Novum Securities Limited Tel: +44 (0) 20 7399
Jon Belliss 9427
Duncan Vasey Peterhouse Corporate Finance Tel: +44 (0) 20 7469
0932
Frank Buhagiar St Brides Partners Ltd Tel: +44 (0) 20 7236
Cosima Akerman 1177
Notes
Prospex Energy PLC is an AIM quoted investment company focussed
on high impact onshore and shallow offshore European gas and power
opportunities. The Company acquires undervalued projects and then
applies low cost re-evaluation techniques to identify and de-risk
prospects. Prospex currently holds a portfolio of three projects:
the Podere Gallina Permit in Italy where first gas at the Selva
field is targeted for 2021; the El Romeral gas and power project in
Spain which includes three producing wells that supply gas to a
100% project-owned 8.1MW power plant; and the large scale Tesorillo
gas project in southern Spain which has the potential to hold gross
un-risked Prospective Resources of 830 Bcf of gas (Best Estimate),
with upside in excess of 2 Tcf. The Company's strategy is to
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.
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