Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and Gas
10 August 2021
Prospex Energy PLC ('Prospex' or the 'Company')
Acquisition of further Working Interest in Selva
Highlights:
· Conditional acquisition of additional 20% interest in Selva gas field in
· The transaction is set to add a further 2.7 billion cubic feet ("Bcf") of 2P gas reserves to Prospex's portfolio and increase its share in Selva's 2P gas reserves to 5bcf
· The Company's appointed debt advisers are already engaging in providing a funding package focused primarily on a loan facility
· Selva was successfully drilled in 2018 by the Podere Maiar well and is expected to come into production by Q2 2022
Prospex Energy PLC, the AIM quoted investment company (AIM:PXEN) focused on European gas and power projects, is pleased to announce that on 9 August 2021 it signed a conditional Sale and Purchase Agreement ("SPA") with AIM quoted United Oil and Gas plc (AIM:UOG) ("UOG") 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
The transaction is conditional upon (1) Prospex sourcing the financing for the consideration of
Mark Routh, CEO of Prospex, commented:
"We are extremely pleased to have agreed this important transaction, as it increases our share of Selva, one of our core assets which, with full environmental approval in place, is very close to first gas. This transaction is the product of months of preparation by the Prospex team and it more than doubles our independently verified 2P recoverable reserves in Selva from 2.3 Bcf to 5.0 Bcf.[1].
"The transaction also increases our share in the multiple follow-up opportunities on the Podere Gallina licence. These include the two historic gas producing North Flank and South Flank reservoirs at Selva, which CGG Services (
"In terms of CO2 emissions when combusted, gas is the cleanest hydrocarbon and as a result is increasingly viewed as a key transition fuel, as the world moves towards renewable, non-fossil fuel energy. Demand for gas, especially domestically sourced as opposed to imported, is therefore expected to increase in the years ahead. Recent positive moves in European gas prices suggest, in our view, that this is already happening. With gas production at Selva set to commence in Q2 2022, Prospex is well placed to play its part in the European energy transition, and with this in mind I look forward to providing further updates on our progress."
Transaction Details:
· SPA signed between PXOG Marshall Limited ("the Buyer"), a wholly owned subsidiary of Prospex, and UOG Holdings plc (a wholly owned subsidiary of UOG), to acquire 100% of UOG Italia for a total Consideration of
· A deposit of
· The balance of the Consideration is to be paid on completion.
· The Company's appointed debt advisers are already engaged to source a funding package focused primarily on a loan facility.
· The acquisition has an effective date of 1 January 2021 and completion is primarily conditional upon:
o Regulatory approval of the change of ownership of UOG Italia;
o Prospex paying the balance of the Consideration.
· Application for the approvals from the Italian Government will be submitted shortly but are anticipated to take at least several months.
· Approval timings anticipated to dovetail with finalising of the funding package.
· Further expenditure on the asset will continue to be funded by all three co-venturers in the Licence proportionate to the current working interests until Completion at which point the 20% share of the working capital funded by UOG since 1 January 2021 will be added to the Consideration.
· The SPA has a maximum long stop date of 210 days from the date of the SPA for the Buyer to complete the transaction being 7 March 2022.
· Prospex is party to the SPA to guarantee the obligations of the Buyer.
· Customary warranties have been granted by UOG Holdings plc in respect of UOG Italia together with an indemnity in relation to certain financial matters since 1 January 2021.
As of 31 December 2020, UOG Italia reported
* * ENDS * *
This announcement contains inside information for the purposes of the Market Abuse Regulation (as in force in the
For further information visit www.prospex.energy or contact the following:
Mark Routh |
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 Limited |
Tel: +44 (0) 20 7220 9797 |
Frank Buhagiar |
St Brides Partners Ltd
|
Tel: +44 (0) 20 7236 1177 |
Notes
About Prospex Energy
Prospex Energy PLC is an AIM quoted investment company focussed on high impact onshore and shallow offshore European gas and power opportunities. The Company acquires undervalued projects and then applies low-cost re-evaluation techniques to identify and de-risk prospects. Prospex currently holds a portfolio of three projects: the Podere Gallina Permit in
About Selva:
The Podere Gallina Licence is in the Po Valley region of
A Competent Person's Report ("CPR") of the Podere Gallina Licence was prepared by CGG GeoConsulting in January 2019 on behalf of the joint venture.[1] It attributed a total of 379 MMscm (13.4 Bcf) gross 2P reserves for the Selva redevelopment project. Upon completion of this transaction the net 2P reserves attributable to Prospex will increase from 64 MMscm (2.3 Bcf) to 140 MMscm (5.0 Bcf).[1]
The CPR also attributed Best Estimate gross prospective (unrisked) gas resources of 1,493 MMscm (52.7 Bcf) on the Podere Gallina Licence in three separate structures.
References:
[1] "Competent Person's Report Podere Gallina Licence,
Glossary:
MMscm Million standard cubic metres
Bcf Billion standard cubic feet
Qualified Person Signoff
In accordance with the AIM notice for Mining and Oil and Gas Companies, the Company discloses that Mark Routh, the CEO and a director of Prospex Energy has reviewed the technical information contained herein. Mark Routh has an MSc in Petroleum Engineering and has been a member of the Society of Petroleum Engineers since 1985. He has over 40 years operating experience in the upstream oil and gas industry. Mark Routh consents to the inclusion of the information in the form and context in which it appears.
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