Prospex Energy PLC/ Index: AIM / Epic: PXEN / Sector: Oil and Gas
Prospex Energy PLC ('Prospex' or the 'Company')
Divestment of PXOG Massey
Prospex Energy PLC, the AIM quoted investment company focused on European gas and power projects, is pleased to announce it has signed a sale and purchase agreement ('SPA') with H2Oil Limited ('H2Oil') regarding the sale of the entire issued share capital of the Company's wholly owned subsidiary, PXOG Massey Limited ('Massey'). Massey's sole asset is its 50% interest in the economic rights of the EIV-1 Suceava Concession, onshore
The sale of Massey follows a strategic review by the Board of Prospex's portfolio of late stage European onshore gas projects, which was instigated at the time of the Company's acquisition of a 49.9% interest in the El Romeral gas and power project in
· The Podere Gallina Exploration Permit, onshore
· The El Romeral integrated gas and power project, onshore
· The Tesorillo Gas Project, onshore
Edward Dawson, Managing Director of Prospex, said, "The sale of our 50% interest in Suceava follows a long-term strategic review of our extensive portfolio. With the acquisition of El Romeral at the start of the year and with it the proposed addition of another 11 high quality, very low risk prospects it became clear that Suceava would be less core as time progressed. As well as providing useful capital, the sale will therefore bring more focus to the remaining core projects in our portfolio, all of which have the potential to hold company-making volumetrics and, importantly, multiple targets that could unlock the substantial resources we have identified.
"At Podere Gallina, in addition to 13.3 Bcf gross gas reserves at the soon to be producing Selva field, there are a further 14.1 Bcf of gross contingent resources at the two historical gas producing North Flank and South Flank reservoirs, as well as four large prospects, which are estimated to hold aggregate gross prospective resources (best estimate) of 91.5 Bcf. At El Romeral, two development locations and 11 prospects, which have been assigned gross contingent resources of 5 Bcf and gross prospective gas resources of 90 Bcf respectively, provide significant scope to increase gas production and in the process increase the operational capacity of the 8.1 MW power station up to 100% from the current 22% level. Finally, at the Tesorillo Gas Project in
"With the Selva gas field in
Further Information
In August 2017, the Company acquired a 50% economic interest in the Exploration Area of the EIV-1 Suceava Concession in North East Romania, through Massey its 100% owned subsidiary. Suceava holds the Bainet field, which was discovered in late 2017. As reported in the Company's recent half year statement to 30 June 2020, average daily production levels in H1 2020 were 15,000m3 per day, 1,000m3 above 2019's daily production levels. In 2019, the Company participated in the non-commercial Bainet-2 exploration well. Primarily due to write downs associated with Bainet 2, a loss of
The Economic Date of the sale is 1 September 2020. Under the terms of the SPA, Prospex has already received 85% of the funds (
The completion of the sale of Massey is subject to a number of typical conditions including Romanian government regulatory sign-offs and approval of the change of control of Massey. The Company and H2Oil hope to complete the transaction at the earliest opportunity. In the meantime, Edward Dawson has resigned as director of Massey and Brendan Daley has assumed the position as director as H2Oil's representative. Pending completion there are a number of customary interim obligations and there are provisions for a reversion of the transaction in certain circumstances. The Company and H2Oil are confident of completion in due course.
About H2Oil
H2Oil Limited - part of the H2Oil group of companies - provides upstream oil and gas services including well testing, well site supervision, full scope equipment supply and packaged services. The transaction with Prospex Energy plc is the group's initial entry into the upstream production sector. www.h2oil.co.uk
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For further information visit www.prospexoilandgas.com or contact the following:
Edward Dawson |
Prospex Energy PLC |
Tel: +44 (0) 20 3948 1619 |
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Rory Murphy
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Strand Hanson Limited
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Tel: +44 (0) 20 7409 3494 |
Colin Rowbury Jon Belliss
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Novum Securities Limited |
Tel: +44 (0) 20 7399 9427 |
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Duncan Vasey |
Peterhouse Corporate Finance
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Tel: +44 (0) 20 7469 0932 |
Frank Buhagiar Cosima Akerman
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St Brides Partners Ltd
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Tel: +44 (0) 20 7236 1177 |
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
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