Prospex Eng Regulatory News (PXEN)

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

17 March 2022

Prospex Energy PLC

('Prospex' or the 'Company')

Production Strategy at El Romeral Power Project

Prospex Energy PLC, the AIM quoted investment company focused on European energy projects, is pleased to provide an update on the production strategy from its El Romeral power project near Carmona in Southern Spain in which the Company holds a 49.9% working interest through Tarba Energía S.L. ("Tarba").

The owners of Tarba (Prospex and Warrego Energy Limited) have agreed to operate the El Romeral power plant 24 hours per day for six days per week until further notice. The reservoir performance and the operating regime are being monitored closely and the Tarba management is confident that the right balance is being achieved between ultimate recovery of remaining reserves and maximising electricity output and therefore income at this time.

Over the last two weeks the power plant has been successfully operating 24 hours a day, six days a week securing the recent high electricity prices. The power-plant automation and operational procedures have now been fully tested to enable continuous operation whenever required.

Currently Tarba has cash in hand of more than €400,000 and the forecast revenue for March 2022 is likely to exceed €500,000 at current forward curve electricity prices[1].

The reservoir modelling work by Tarba will continue to forecast gas production profiles from the El Romeral concession using a suite of production strategies including further sensitivities on rates, pressures and ultimate recoveries. The production strategy will be regularly reviewed and optimised based on sound reservoir management.

Mark Routh, Prospex's CEO, commented:

"The El Romeral concession has been producing gas for the power plant for twenty years and it was essential that the rate of production decline was thoroughly understood before instigating continuous plant operations. We now know that continuous operations are feasible and safe. I am very proud of our management and operating team at the plant who have embraced this new operating regime which was made possible by the success of the plant upgrades installed last December."

"We have selected the optimum production strategy based on the latest reservoir modelling which strikes the right balance between maximising recovery and optimising electricity production at this crucial time for the supply of energy in Europe. Reservoir modelling will continue and our production strategy will be optimised to match the availability of new gas production from our planned infill wells in the El Romeral concession."

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 El Romeral and Tarba

The El Romeral gas and power project in Spain, with gas production wells supplying gas to an 8.1MW power plant near Carmona in Southern Spain is owned and operated by Tarba. It is currently operating at about 20% of its full capacity because Tarba is waiting on permits to drill further infill wells on the concessions to increase production. Prospex owns a 49.9% working interest in the El Romeral project via Tarba. The remaining 51.1% working interest is owned by Warrego Energy Limited (ASX:WGO). Tarba sells electricity generated from the plant on the spot market in Spain. Current spot market prices have reached all-time highs in recent months. The El Romeral licences comprise three contiguous production concessions.

The updated Corporate Presentation for Q1-2022 is available on the Company's website at https://bit.ly/3G6JtCm.

[1] Forward curve electricity prices in Spain sourced from https://www.omip.pt/en/plazo-hoy