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(Alliance News) - Prospex Energy PLC shares fell on Monday, after it released its year-end review and business development update.
Shares in Prospex were down 11% at 4.84 pence each in London on Monday morning. In the last 12 months, the stock is down 60%.
On Monday, the Europe-focused gas and power project investor released its year-end review and business development update.
Prospex reported gross quarterly gas production of 5.7 million standard cubic meters for the third quarter of 2023, and gross revenue of EUR1.9 million.
In July, the group began production at its Podere Maia-1 gas well site at Selva field, Italy. Along with a reduction in debt, Prospex said this makes it "well positioned to capitalise on future investment opportunities."
In October, the Podere Maia-1 well was running at 62,000 standard cubic meters per day. The company is targeting long-term production of at least 80,000 scm/d after the testing period concludes in December.
By September, Prospex converted all convertible loan notes issued in July 2022 into equity at 4.25 pence each. The GBP1.9 million raised was used to fund the Selva development project.
Selva is a joint venture between Prospex and Po Valley Operations Ltd, the two holding a 37% and 63% stake, respectively.
In February, Po Valley signed a gas sales agreement on behalf of the pair with BP Gas Marketing Ltd. Prospex previously estimated 37 million standard cubic metres of natural gas to be supplied to BPGM under the 18-month supply agreement.
Along with its El Romeral power plant in southern Spain, the development of this site now gives Prospex two cash-generative onshore assets in two European countries.
The El Romeral plant is expected to have generated gross revenues of EUR1.8 million in 2023.
In May, 20 hectares adjacent to the El Romeral plant were leased for 25 years through Tarba Energia SL, a Spanish affiliate of Prospex, for the development of a five megawatt solar panel project. The project "will produce electricity through photovoltaic solar energy and increase output from the plant by up to 60%," Prospex said.
The group also said that permit applications are underway for the drilling of five more wells in Spain and three in Italy.
Prospex's Chief Executive Officer Mark Routh said: "As I look back on 2023, I am proud of what the company has achieved. We now have two producing, cash generative assets in Europe. This was made possible by issuing convertible loan notes last year, which enabled us to fund the Selva development project to first gas production in early July 2023 - a significant milestone."
However, during 2023, investment opportunities in which Prospex was interested fell through.
After undertaking in-depth evaluations of several offers, two were advanced to the heads of terms stage. One of these was passed up after Prospex anticipated prohibitively high drilling and development costs.
The other, a farm-in offer, was abandoned after Prospex was advised that "continued challenging market conditions" would limit support for the necessary fundraising efforts before the new year.
"The company will continue to evaluate investment opportunities in the new year. However, and in order to minimise diluting investors, Prospex is actively pursuing the self-funded acquisition of highly prospective open-acreage in proven onshore basins in Europe," Prospex said.
By Hugh Cameron, Alliance News reporter
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