Prospex Eng Regulatory News (PXEN)

Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and Gas

Prospex Energy PLC ('Prospex' or the 'Company')Full Environmental Approval for Selva Gas Field

Prospex Energy PLC, the AIM quoted investment company focused on European gas and power projects, is pleased to announce that it has been advised by the operator, Po Valley Operations Limited ('PVO'), that full environmental approval for the development of the Selva Malvezzi Gas-Field ('Selva') in northern Italy has been received from the Italian Government. Full environmental approval paves the way for the grant of a full production licence from Italy's Economic Development Ministry. Prospex holds a 17% interest in the Podere Gallina licence which holds the Selva gas field.

Full Production Licence

The operator expects to submit the required documentation in support of its application for a full production licence for Selva during Q2 2021. This will include an application for an INTESA (intergovernmental agreement) between the regional and national governments, which is a standard development procedure for onshore gas fields in Italy. A preliminary gas Production Concession (80.68km²) was granted by the Italian Ministry for Economic Development in early 2019.

The receipt of full environmental approval follows the approval of the Environmental Impact Assessment ('EIA') of Selva and subsequent sign-off by the Ministers of MITE (Ministry of Ecological Transition) and MIC (Ministry of Culture). The approval has been published on the official website.

Selva Development Plan

In tandem with the production licence application process, development and preliminary work has now commenced to prepare the field, which has gross gas reserves of 13.3bcf (2P), for production in mid-2022. Under the first phase of the development plan, a fully automated gas plant will be installed at the existing Selva/Podere Maiar 1dir well site along with a one-kilometre long pipeline to connect the well with the nearby Italian National Gas Grid. The planned Selva development has a small footprint of less than half a hectare.

Based on dynamic reservoir studies, the field development is designed to produce at a maximum rate of up to 150,000 cubic metres/day (5.3 mmscf/day) from successfully tested C1 and C2 production levels in the Medium-Upper Pliocene sands of the Porto Garibaldi Formation.

Prospex non-executive Chairman, Bill Smith, said, "Gas production at Selva promises to transform Prospex Energy's financial profile and with this in mind the granting of full environmental approval for the development of the field is a key milestone for the Company. With a planned maximum production rate of up to 150,000 cubic metres/day, Selva on its own is expected to generate annualised revenues several times greater than our historic annual corporate costs which, in turn, will enable us to pursue additional low risk exploration and development opportunities both at Podere Gallina and at our Spanish projects.

"Next steps for Selva include the submission of the required documentation for a production concession licence later this quarter, as well as the commencement of preliminary development work at the site. Environmental approval will also aid the progression of discussions with potential non-equity funders for our share of the development costs. Together with the recently completed acquisition of the El Romeral Gas & Power Project in Spain, tangible progress is being made to build a highly cash generative business focused on European gas and power opportunities and I look forward to providing further updates on our progress."

This announcement contains inside information.

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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.