Prospex Eng Regulatory News (PXEN)

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

26 October 2021

Prospex Energy PLC

Update on the Selva Field Development in Italy

Prospex Energy PLC, ('Prospex' or the 'Company') the AIM quoted investment company (AIM:PXEN) focused on European gas and power projects, provides an update on the Selva field development project in Italy, in which the Company holds a current 17% interest, following an announcement on the ASX by the operator, Po Valley Energy.

Schedule and capital expenditure update.

Po Valley Energy, the operator of the Podere Gallina licence in Italy in which the Selva field is situated, has been advised by SNAM, the national pipeline operator in Italy, of a delay to tie-in the Selva field to the national gas grid. SNAM is responsible for the both the costs to construct the grid connection point for new gas developments, as well as the construction itself.

Following a review of the tie-in execution plan with pipeline operator SNAM, the operator has been informed that the estimated time to complete the tie-in would delay first gas to 1H 2023. The tie-in to the gas grid can only be done by SNAM in accordance with the Italian gas network code and the delay is, in part, as a result of supply chain disruption due to COVID-19 impacts. Po Valley Energy also advises that there is an increased cost estimate of approximately 15% for related materials, namely steel, which is likely to result in an increase in the gross development capex for the Selva Gas field from €2.3 million to €2.65 million.

Regulatory approvals

The Ministry has confirmed the Selva production concession is progressing and it is expected that the INTESA (the agreement) for Selva to be approved is on schedule by the Regional Government in 4Q 2021 and that the full production concession is expected to be granted in 1Q 2022.

Environmental Monitoring

Initial GPS monitoring began in June 2020 and this programme will be continued jointly with seismic and subsidence monitoring programmes. The first 12 months of full monitoring will be completed by December 2022.

Mark Routh Prospex's CEO commented:

"It is disappointing that the revised schedule for the tie-in works for our 4-inch pipeline to the national gas grid will delay the delivery of first gas from this project at a time when Europe is facing an unprecedented energy crisis and a shortage of gas. We have asked Po Valley Energy, as operator, to engage with SNAM to seek an acceleration of the tie-in works to the national grid network."

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

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 updip of the previous wells on the Selva field. The Company has as 17% working interest in the Podere Gallina licence.

The Company announced on 10 August 2021 the conditional acquisition of a further 20% of the Podere Gallina licence from AIM quoted United Oil and Gas plc (AIM:UOG) ("UOG") and UOG Holdings plc (a wholly owned subsidiary of UOG) by way of a corporate transaction of 100% of UOG Italia S.r.l. ("UOG Italia") which has a 20% working interest in the Podere Gallina licence which contains the Selva Gas Field. UOG Italia is a wholly owned subsidiary of UOG Holdings plc.