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(Sharecast News) - Prospex Energy updated the market on developments in the third quarter at the Selva Field in Italy on Wednesday, centred around the Podere Maiar-1 (PM-1) gas facility operated by Po Valley Energy.
The AIM-traded firm holds a 37% working interest in the Selva Malvezzi production concession, with Po Valley Energy owning the remaining 63%.
It said PM-1 started gas production on 4 July, marking a significant milestone in the Selva Field's development.
Following a four-week ramp-up and commissioning programme, the PM-1 well showed impressive daily production levels, averaging 72,000 standard cubic metres per day during the initial testing phase.
That testing period was set to complete by the end of December.
As of October, production was temporarily operating at around 62,000 standard cubic metres per day as part of the ongoing testing programme, with expectations of production levels increasing in November.
Looking ahead, the objective was to establish long-term production rates from the well, targeting at least 80,000 standard cubic metres per day.
All gas produced from the PM-1 facility was sold to BP Gas Marketing under an 18-month supply agreement, announced on 14 February.
The agreement's supply price was linked to Italy's 'Heren PSV day ahead mid' price assessment, which tracks publicly available Dutch TTF spot prices.
Notably, there had been a recent uptick in gas prices, rising from 32 euro cents per standard cubic metre to the current spot price of 53 euro cents, equivalent to €50.30 per megawatt-hour.
The forward curve for TTF gas prices indicated levels above €50 per megawatt-hour through the end of the first quarter of 2025.
Regarding production figures, the Selva Malvezzi production concession achieved gross quarterly production of 5,658,117 standard cubic metres, with 2,093,503 standard cubic metres net to Prospex Energy.
Gross revenue for the quarter amounted to €1.94m, with €0.72m net to Prospex.
The company said there were promising prospects for additional growth within the Selva Malvezzi production concession.
It said the operator was making significant progress in agreements with local landowners and advancing the permitting process with regulatory authorities to facilitate drilling programmes at Selva North, South, and East.
"Delivering the stable production rates and moreover securing the substantial cash flows from the brand-new gas plant at the PM-1 gas facility is a significant achievement by the operator of our Selva Malvezzi production concession, Po Valley Energy," said chief executive officer Mark Routh.
"This places Prospex in the enviable position of having stable production and income from two onshore natural gas fields, one in Spain and one in Italy.
"Prospex is working together with the Po Valley team and using this production income to progress the necessary activities to secure the development drilling programmes for the other structures on the production concession in order to convert those contingent and prospective resources into proved, developed and producing reserves in the near term."
Routh said the company had delivered a key step in its strategy to become a diversified energy producer with multiple producing assets principally in lower-risk, onshore European markets with ready access to infrastructure.
"We are proud to be supporting the European energy sector with producing assets in both Italy and Spain and look forward to updating shareholders on our continued progress."
At 1205 GMT, shares in Prospex Energy were down 1.43% at 6.9p.
Reporting by Josh White for Sharecast.com.
