Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and Gas
24 December 2020
Prospex Energy PLC ('Prospex' or the 'Company')
El Romeral Approval Granted & Issue of CLN
Prospex Energy PLC, the AIM quoted investment company focused on European gas and power projects, is pleased to announce, further to previous notifications, that regulatory approval has been received for the acquisition of a 49.9% interest in El Romeral, an integrated gas production and power station operation in southern
In addition, the Company announces the issue of a £415,838.28 convertible loan note and associated warrants to new and certain existing investors, along with certain members of the Board and staff in settlement of deferred stipends and salaries as a result of the COVID-19 pandemic.
El Romeral
Tarba Energia ('Tarba') has informed its shareholders that both the Ministerial and Regional authorities sign-off has been received for the transfer of El Romeral to the company. This represents the final regulatory approval required for the acquisition of El Romeral, which can now proceed to completion. Completion is now expected on 31 January 2021. Prospex owns a 49.9% interest in Tarba's B shares with its partner Warrego Energy Limited owning the balance.
Existing gas and electricity production and significant low risk development potential
El Romeral is an operational gas and power project which includes three producing wells that supply gas, through its own network, to a 100% project-owned 8.1 MW power station. El Romeral, which is comprised of three production licences, has significant development potential and holds two development locations and 11 very-low risk prospects with gross contingent and prospective gas resources of 5Bcf and 90Bcf, respectively. There is the potential to increase the number of generating days at the Project (historically equivalent to five days per week) and in the medium-term increase utilisation of the generation equipment (current 22%) by increasing onsite gas production. When gas was not a limiting factor, the power station regularly produced c. 60,000 Mwh per annum.
Next steps
Following completion of the acquisition, Tarba will assume the day-to-day management and control of El Romeral and will look to implement a number of short-term operational enhancements and efficiencies. Whilst there is no committed work programme, Tarba's medium-term target is to increase gas production and, in turn, electricity generation at the Project's power plant towards its nameplate capacity via the drilling of new wells targeting already identified development locations / prospects. Tarba will also carry out a review of existing wells to evaluate the potential to undertake workovers to enhance recovery rates.
Convertible Loan Note and Warrants
The Company has raised
The CLN will pay 10% interest per annum with the first six monthly payment due in June 2021. The term of the CLN is 18 months with capital repayment of unconverted amounts due on 30 June 2022. The CLN grants the subscribers the right but not the obligation to convert the loan, on notice, into new ordinary shares in the Company each at
In addition, certain holders of the Company's 2018 unsecured loan note have ('2018 Notes') have agreed to rollover the partial capital repayment due in December 2020 into the CLN. Under the 2018 Notes instrument, holders are entitled to ¼ of the outstanding capital returned in December 2020. There is a total of
A further
A total of £415,838.28 of the CLN has therefore been issued to all the above subscribers, each of whom will also be issued with 44.4444 warrants ('the Warrants') for each
Directors Interest
The 2018 Notes are held by the following Directors in following amounts:
Director |
Amount |
Bill Smith |
|
Richard Mays (and family) |
|
James Smith |
|
Capital repayment due on 31 December 2020 and rollover into the CLN:
Director |
Amount |
Bill Smith |
|
Richard Mays (and family) |
|
James Smith |
|
The Directors interests in the CLN as a result of 2018 Notes rollover into CLN and additional subscriptions:
Director |
Rollover |
Additional |
Total |
Bill Smith |
|
£13,500 1 |
|
Richard Mays (and family) |
|
|
|
James Smith |
|
£15,000 2 |
|
Notes:
1 in lieu of stipend
2 further subscription
Related Party Transaction
The issue of the CLN to Bill Smith, Richard Mays (and family) and James Smith constitutes a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. Accordingly, Edward Dawson, independent Director in relation to the issue of the CLN, having consulted with the Company's Nominated Adviser, Strand Hanson Limited, considers that the terms of the Directors' participation in the CLN (with associated warrants) are fair and reasonable insofar as the Company's shareholders are concerned.
Prospex non-executive Chairman, Bill Smith, said, "Ministerial sign-off for the acquisition of El Romeral sees Prospex become an integrated gas and power investment company. For
"We are not the only ones to see El Romeral's potential, so too, in our view, do the subscribers to the CLN. As well as the advancement of El Romeral, in 2021 these subscribers along with our existing shareholders can expect to see the commencement of production at the Selva gas field on the Podere Gallina permit in
Qualified Person sign off
Carlos Venturini, Fellow of the Geological Society of
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
* * ENDS * *
For further information visit www.prospexoilandgas.com or contact the following:
Edward Dawson |
Prospex Energy PLC |
Tel: +44 (0) 20 3948 1619 |
Rory Murphy |
Strand Hanson Limited
|
Tel: +44 (0) 20 7409 3494 |
Colin Rowbury |
Novum Securities Limited |
Tel: +44 (0) 20 7399 9427 |
Duncan Vasey |
Peterhouse Corporate Finance |
Tel: +44 (0) 20 7469 0932 |
Frank Buhagiar
|
St Brides Partners Ltd
|
Tel: +44 (0) 20 7236 1177 |
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.
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