Prospex Eng Regulatory News (PXEN)

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

11 August 2022

Prospex Energy PLC

('Prospex' or the 'Company')

Italy: Selva Field Development Update

Po Valley Signs Construction Contract with TESI Srl Securing Development Costs and Timing of the Construction Costs at the Podere Maiar Gas Field

Prospex Energy PLC (AIM: PXEN), the AIM quoted investment company focused on European gas and power projects, is pleased to note an announcement made by Po Valley Energy Limited (ASX:PVE) ('Po Valley' or the 'Operator') released on the ASX earlier today and provides an update on the costs and schedule to first gas at the Podere Maiar gas field located in the Po Valley onshore in northern Italy, which lies within the Selva Malvezzi production concession ('Selva'). The Company holds a 37% working interest in the Podere Maiar licence with the Operator holding the remaining 63%.

Highlights

· Po Valley has signed a construction contract with Italian engineering firm TESI Srl ('TESI') to install the gas plant and pipeline for the Podere Maiar gas field in Italy

· A 4-inch pipeline will connect Podere Maiar to Italy's gas grid

· The TESI contract secures development costs and timing at the Podere Maiar field, with construction costs €130,000 (£110,000) less than previously forecast

· Construction is scheduled for completion in the first quarter of 2023 and Podere Maiar is now on track for first gas at the start of Q2 CY2023

· Subject to costs and first production timing remaining on this revised schedule, the Company expects to be able to fund its share of capex from existing resources

· The decree approving the Production Concession at Selva was issued by Italy's Ministry of Ecological Transition on 28 July 2022

Mark Routh, Prospex's CEO, commented:

"We are extremely pleased that the Operator has signed the construction contract with TESI on behalf of the Joint Venture. Signing the TESI contract is an important step for the Joint Venture, as it secures both the costs and the schedule to first gas which is now expected by the start of the second quarter of 2023, some three months ahead of previous schedule estimates.

"Field development work is expected to commence mid-September with all construction and essential procurement contracts now in place."

Po Valley, as the operator of the Selva Malvezzi production concession, has signed contracts with Italian engineering firm TESI through its Subsidiary Po Valley Operations, to develop the Podere Maiar gas field.

TESI will construct a gas treatment plant at the site of Podere Maiar-1dir well and will lay a 1km-long 4-inch pipeline for gas transportation from the well site to Italy's national gas grid, with Italy's gas regulator SNAM to connect the pipeline to the grid.

The cost of constructing the gas treatment plant and pipeline totals €3.45 million (~£2.91 million) (net to Prospex: €1.28 million; ~£1.08 million) which is €130,000 (~£110,000) less than previously forecast (net to Prospex: ~€48,000; ~£41,000).

Once installed, the gas plant capacity will be ~150,000 standard cubic metres (scm) per day and pipeline capacity will be ~300,000 scm per day. Construction is scheduled to be completed in the first quarter of CY23.

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.

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For further information visit www.prospex.energy or contact the following:

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 Selva:

The Podere Gallina Licence is in the Po Valley region of Italy. The licence contains the currently shut‑in Selva gas-field as well as exciting exploration opportunities. The Podere Maiar-1 well 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.

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 91.5 Bcf of gross Best Estimate Prospective Resources (33.9 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.

The CPR also attributed Best Estimate gross prospective (un-risked) gas resources of 1,493 MMscm (52.7 Bcf) on the Podere Gallina Licence in three separate structures.

References:

[1] Source: "Competent Person's Report Podere Gallina Licence, Italy" prepared by CGG Services (UK) Limited in January 2019 https://bit.ly/3nZNfYf].

Glossary:

scm Standard cubic metres

MMscm Million standard cubic metres

Bcf Billion standard cubic feet

MMscfd million standard cubic feet per day

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.

The updated Corporate Presentation for Q3-2022 is available on the Company's website at https://www.prospex.energy/home/