Mark Routh of Prospex Energy discusses their transformational acquisition of the Selva Gas Field

Mark Routh CEO of Prospex Energy #PXEN discusses how the acquisition of the Selva Gas Field will be transformational when it starts production by Q2 2023.

Background

On 9 August 2021 Prospex signed a conditional Sale and Purchase Agreement  with AIM quoted United Oil and Gas plc and UOG Holdings plc, a wholly owned subsidiary of UOG, to conditionally acquire a further 20% working interest in the Podere Gallina Licence in the Po Valley region of Italy, via the acquisition of UOG Holdings' subsidiary, UOG Italia S.r.l.  Having secured the funding for the transaction from the Company's Placing in February 2022, the final condition for closing the transaction was the approval by the Ministry of Ecological Transition for the change of control of 100% of UOG Italia from UOG to Prospex.  This was officially received on 4 April 2022.  The Company has now paid UOG the balance of the consideration of €2,056,466 plus the working capital requirement accrued from the effective date of 1 January 2021 to 6 April 2022 of €134,500, a total of €2,190,966.  UOG Italia has a 20% working interest in the Podere Gallina licence which contains the Selva Gas Field.  Prospex now owns a 37% working interest in the Podere Gallina Licence, through its 100% ownership of UOG Italia and its pre-existing 17% share of the licence through its wholly-owned subsidiary PXOG Marshall Limited.

Completion of this transaction increases the Company's share of Selva's independently verified 2P gas reserves from 2.3 Bcf to 5.0 Bcf[1].  The other 63% participant in the licence and operator is Po Valley Operations Limited, a wholly-owned subsidiary of Po Valley Energy Limited (ASX:PVE).

The Selva Gas Field is scheduled to come into production by Q2 2023 from the suspended Podere Maiar-1 well which was drilled in December 2017.  The next steps to first gas are: -

1.    receipt of a full production licence from the Italian authorities which is expected in Q2 2022.  On 21 January 2022, the INTESA (the agreement) for the Selva Malvezzi concession was sent by MITE to the Emilia Romagna Region (the Regional Government).  This pre-award for the intergovernmental agreement is the penultimate step for the approval of the Production Concession.  The final step is the award of the Production Concession.  Once this is awarded the field development physical project activity can commence.

2.    completion of the 12-month seismic environmental monitoring programme, which commenced in January 2021.

3.    installation of an 800m 4-inch pipeline from the well head to the gas grid network operated by Snam Rete Gas S.p.A. ("SNAM") in order to export the gas to market.

4.    connection of the pipeline from the well to the SNAM gas grid network by SNAM.  Procurement and engineering by SNAM for this activity commenced in December 2021.

Prospex is supporting the operator Po Valley to accelerate completion of these steps in order to achieve first gas prior to the current target of Q2 2023.

About Prospex Energy 

About 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.