TIDMPXEN
RNS Number : 7898P
Prospex Energy PLC
14 February 2023
Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and
Gas
14 February 2023
Prospex Energy PLC
('Prospex' or the 'Company')
Italy: Selva Field Development
Gas Sales Agreement signed with BP Gas Marketing
Prospex Energy PLC (AIM: PXEN), the AIM quoted investment
company focused on European gas and power projects, is pleased to
announce that the Operator of the Selva Malvezzi production
concession in which Prospex has a 37% working interest, has signed
a gas sales agreement ("GSA") with BP Gas Marketing Limited
("BPGM"), an indirect, wholly owned subsidiary of BP International
Limited ("BPI") under which BPGM will purchase the forecast gas
production from the soon to be completed Podere Maiar-1 production
facility in the Selva Malvezzi production concession located in the
Po Valley Region of Italy. Po Valley Operations Pty Limited
("PVO"), a wholly owned subsidiary of Po Valley Energy Limited
(ASX: PVE) is the Operator of the Selva Malvezzi production
concession with 63% ownership interest and Prospex has the
remaining 37% working interest.
Highlights
-- 18-month GSA contract to commence on 1 April 2023 with potential to extend
-- An estimated 37 million standard cubic metres of natural gas
is expected to be supplied to BPGM under the contract
-- Gas supply price will be linked to Italy's "Heren PSV day ahead mid" price assessment
-- The Joint Venture is fully funded to complete the Podere
Maiar-1 production facility development and first gas is on track
for early Q2 2023.
Mark Routh, Prospex's CEO, commented:
"The gas sales agreement with BP Gas Marketing Ltd marks a
significant milestone for the Company and its joint venture
partner, Po Valley as we get closer to first gas production from
the Selva field development. We are delighted that Po Valley has
secured the agreement with BP Gas Marketing Limited, a recognisable
brand in the industry, to take delivery and sell our gas and look
forward to working with them. Prospex is selling its share of the
gas production jointly with the Operator, Po Valley, under a joint
marketing agreement, in order to optimise the value of our gas
sales.
"First gas is still on track for early in the second quarter of
2023, on schedule and on budget."
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.
* *S * *
For further information visit www.prospex.energy or contact the
following:
Mark Routh Prospex Energy PLC Tel: +44 (0) 20
7236 1177
Ritchie Balmer Strand Hanson Limited Tel: +44 (0) 20
Rory Murphy 7409 3494
Andrew Monk (Corporate Broking) VSA Capital Limited Tel: +44 (0) 20
Andrew Raca/Alex Cabral (Corporate 3005 5000
Finance)
Colin Rowbury Novum Securities Tel: +44 (0) 20
Jon Belliss Limited 7399 9427
Susie Geliher St Brides Partners Tel: +44 (0) 20
Ana Ribeiro Limited 7236 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 the Gas Sales Agreement:
Key terms of the GSA include:
Parties PVO and BPGM
Start date 1 April 2023
End date 30 September 2024 (18 months duration)
Extension of contract No automatic right to extend, parties to
commence extension discussions 30 days before
30 September 2024
Termination rights Termination conditions standard for a contract
of this nature including gas quality and
delivery specifications and payment
SNAM delivery point Budrio 50202301
Gas supply volumes
(estimate) - standard * 12,142,200 scm for the thermal year ending 30 Sep
cubic metres (scm) 2023 (6 months)
* 24,970,400 scm for the thermal year ending 30 Sep
2024 (12 months)
GSA gas pricing
* Linked to Heren PSV day ahead mid
* Heren PSV day ahead mid is a virtual, market-based
price assessment announced in the ICIS Heren report
at 5:30pm on any Banking Day for gas prices in Italy.
PSV is short for "Punto di Scambio Virtuale" which
translates to "virtual trading point"
* Heren PSV day ahead mid is the arithmetic mean of the
Day-ahead Offer price and the Day-ahead Bid price for
Natural Gas at the PSV on such Banking Day; and (ii)
in respect of a Day that is a non-Banking Day, the
arithmetic mean of the Weekend Offer price and
Weekend Bid price for Natural Gas at the PSV on such
non-Banking Day as published, in each case, on the
Banking Day immediately preceding the relevant Day by
ICIS Heren under the heading: "PSV Price Assessment"
in "European Spot Gas Markets", and expressed in
Euros per MWh
* As Heren PSV day-ahead mid pricing is only available
in ICIS Heren reports (private and subscription
based), Dutch TTF spot price is considered a useful
proxy which is publicly available. Refer to competent
persons report July 2022, Section 5 'Economic
Analysis' (see link below)
PVO supply volume
nominations * PVO to provide provisional nominations monthly,
weekly and daily
* Actual and binding nominations required by 2pm on any
Banking Day
GSA payment terms GSA includes detailed invoicing process for
gas sales and SNAM transport costs. Settlement
and payment process completes 20 days after
month end
Podere Maiar - Expected to be Euro 0.60 million per annum,
1 operating costs abandonment costs expected to Euro 2.70 million.
Refer to competent persons report July 2022,
Section 5 'Economic Analysis' (see link below)
About Selva:
The Podere Gallina Licence is in the Po Valley region of
northern Italy. The licence contains the currently shut--in Selva
gas-field as well as exciting exploration and development
opportunities. The Podere Maiar-1 well at Selva was completed in
December 2017 and successfully found a commercial gas accumulation
up-dip of the previous wells on the Selva field. The Company has a
37% working interest in the Podere Gallina licence held via
Prospex's two wholly owned subsidiaries, PXOG Marshall Ltd (17% of
the Licence) and UOG Italia Srl (20% of the Licence).
The Podere Gallina Licence holds independently verified 2P gross
reserves of 13.4 Bcf (5.0 Bcf net to Prospex at 37% WI) in Selva,
gross Contingent 2C Resources of 14.1 Bcf (5.2 Bcf net) and a
further 88.2 Bcf of gross Best Estimate Prospective Resources
(un-risked) (32.6 Bcf net).([1])
An independent Competent Person's Report of the Podere Gallina
Licence was prepared by CGG Services (UK) Limited in January 2019
on behalf of the joint venture.([1]) It attributed a total of 379
MMscm (13.4 Bcf) gross 2P reserves for the Selva redevelopment
project.
References:
[1] Source : "Competent Person's Report Podere Gallina Licence,
Italy" prepared by CGG Services (UK) Limited in July 2022 [
https://bit.ly/3JASCc2 ]
Glossary:
scm Standard cubic metres
MMscm Million standard cubic metres
Bcf Billion standard cubic feet
MMscfd million standard cubic feet per day
MWh Mega Watt hour
Qualified Person Signoff
In accordance with the AIM notice for Mining and Oil and Gas
Companies, the Company discloses that Mark Routh, the CEO and a
director of Prospex Energy plc has reviewed the technical
information contained herein. Mark Routh has an MSc in Petroleum
Engineering and has been a member of the Society of Petroleum
Engineers since 1985. He has over 40 years operating experience in
the upstream oil and gas industry. Mark Routh consents to the
inclusion of the information in the form and context in which it
appears.
An Investor Presentation from January 2023 is available on the
Company's website at https://www.prospex.energy/home/
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