UPDATE: Prospex Oil Shares Surge On Resource Upgrade At Italian Permit

LONDON (Alliance News) - Prospex Oil & Gas PLC on Friday reported a substantial upgrade to the resource estimate for the Podere Gallina exploration permit and specifically the Selva gas field resources in the Po Valley region of Italy.

Shares in the company were trading 23% higher in London on Friday at 0.19 pence each on the back of the news.

Podere Gallina was upgraded to 14.1 billion cubic feet of contingent resources and 91.5 bcf of prospective resources. Previously, gross resources for Podere Gallina stood at zero contingent resources and 52.7 bcf prospective resources, alongside 13.3 bcf of 2P reserves.

Prospex, which holds a 17% interest in Podere Gallina permit, said Selva was assigned gross contingent resources of 14.1 bcf, previously zero, following evaluation of the historical gas producing North Flank and South Flank reservoirs, with chance of success on the prospects of between 60% and 70%, and contingent resources of 8.9 bcf and 5.2 bcf, respectively.

The upgraded resources are in addition to gross reserves of 13.3 bcf already assigned to Selva

Prospex said production at Selva remains on course to commence in 2020 at a gross rate of up to 150,000 cubic metres per day following award of a production concession by the Italian government in January.

Prospex Non-Executive Chair Bill Smith said: "Progress is being made to bring Selva online, specifically the preliminary award of a production concession earlier this year which keeps the field on track to commence production in 2020 at a gross rate of up to 150,000 cubic metres per day. At this rate and subject to gas prices, we estimate Selva will generate significant net revenue to Prospex."

"Elsewhere, a work programme to de-risk gross prospective resources of up to 2tcf of gas, including an historical discovery at the Tesorillo gas project in southern Spain is ongoing. Meanwhile preparations are underway to drill a second well later this year at the Suceava Concession in North East Romania targeting a lookalike structure to the Bainet discovery which was successfully drilled in 2017 and is currently on production," Smith added.

United Oil & Gas PLC, which holds a 20% economic interest in the Podere Gallina exploration permit, noted the upgrade to the resource estimate for the permit.