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

8 March 2022

Prospex Energy PLC

('Prospex' or the 'Company')

Update on Production from El Romeral Power Project

Prospex Energy PLC, the AIM quoted investment company focused on European energy projects, is pleased to provide an update on the production strategy from its El Romeral power project near Carmona in Southern Spain in which the Company holds a 49.9% working interest through Tarba Energía S.L. ("Tarba").

Considering the recent energy shortfalls being experienced across Europe, the owners of Tarba (Prospex and Warrego Energy Limited) have temporarily agreed to operate the power plant 24 hours per day for six days per week from 4 March 2022 until 15 March 2022 at which point the reservoir performance and the operating regime will be reviewed.

Recently, revenues generated by the plant have been at an all-time high as a result of the current electricity prices.  Switching to almost continuous operations will further boost revenue.

This has been made possible as a direct result of the successful plant automation work completed at the end of 2021.  The automation of the power-plant has enabled 24/7 production and therefore an ability to produce at times of peak demand, regardless of day or time.

The price of electricity in Spain remains at unprecedently high levels and is currently more than six-times what it was in March 2021 when the El Romeral power-plant was acquired.

Currently Tarba has cash in hand of more than €450,000.  In January and February 2022 monthly income from power generation was €285,125 and €262,974 respectively.

A reservoir modelling project to history-match and forecast gas production profiles from the El Romeral concession is nearing completion.  Tarba's management team intend to move to continuous daily gas production and generate electricity from the plant 24 hours per day as soon as results from the study indicate that it is prudent to do so.  Any change in the production regime will be carried out subject to the safety of personnel,  and as permitted by the operational condition and maintenance requirements of the facilities.

Continuous operations will also optimise reservoir management because a constant flow of gas from a gas well is preferable to shutting in production several times a week.  Generator efficiency will also benefit from 24/7 operations.

Further additional production capacity exists if new wells can be drilled on the concessions to increase gas production.  Tarba applied for permits to drill several infill wells in September 2021 and continues to pursue the consent of the regulatory authorities which is expected later this year.

Mark Routh, Prospex's CEO, commented:

"Before switching to continuous plant operation which has been made feasible by the plant automation project which completed in December 2021, it is essential that safe and reliable operating procedures and systems are tested and proven.  It was also crucial that a reservoir modelling history matching and production forecasting study was undertaken to ensure that moving to continuous operations would not jeopardise gas production.  When the results of this study are known I believe that a move to 24/7 operations is not only beneficial but prudent."

"It is extremely satisfying that Prospex, through its ownership of Tarba, is now able to increase its electricity output at a time when security of energy supply is so important to us all.  I accept that it is a small contribution but our generation capacity could be increased five-fold by receiving permissions to drill our planned infill wells, the first two of which are to be drilled into proven discoveries."

"The extra income generated from the new production regime and the current forward curve electricity prices puts Prospex in a very healthy position for further growth opportunities."

"I expect to be sharing further updates in the coming months."

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

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.

About El Romeral and Tarba

The El Romeral gas and power project in Spain, with gas production wells supplying gas to an 8.1MW power plant near Carmona in Southern Spain is owned and operated by Tarba.  It is currently operating at about 20% of its full capacity because Tarba is waiting on permits to drill further infill wells on the concessions to increase production.  Prospex owns a 49.9% working interest in the El Romeral project via Tarba.  The remaining 51.1% working interest is owned by Warrego Energy Limited (ASX:WGO).  Tarba sells electricity generated from the plant on the spot market in Spain.  Current spot market prices have reached all-time highs in recent months.  The El Romeral licences comprise three contiguous production concessions.

The updated Corporate Presentation for Q1-2022 is available on the Company's website at https://bit.ly/3G6JtCm.