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

29 October 2021

Prospex Energy PLC

Update on the El Romeral Well Interventions and Plant Optimisation

Prospex Energy PLC, ('Prospex' or the 'Company') the AIM quoted investment company (AIM:PXEN) focused on European gas and power projects, provides an update on the El Romeral well intervention project in southern Spain, in which the Company holds a 49.9% working interest, through its interest in Tarba Energia.

The investment in the surveillance in the El Romeral wells has delivered valuable data regarding the status of the wells and the reservoirs.  It allows up-dating of the expectations regarding the geological model of the reservoir and the well performance of the facilitates and the decision-making process.  Unfortunately the measurements in well Rio Corbones-1 demonstrated that the planned restoration of the gas production was not possible.  After several slickline runs to remove the water from the tubing it quickly became clear that no gas was evident coming from the well, only further influx of water from the reservoir.  Without the presence of gas there was no possibility of creating a foam to lift the water and so the well intervention programme was curtailed after having acquired downhole pressure and temperature data.  The equipment was then transferred in turn to the three producing wells to complete the data acquisition programme acquiring downhole pressures, temperatures and flowrates for the calculation of remaining reserves and production optimisation.

The gross budget for the well intervention work was €103,000, comprising €79,000 for the well intervention and €24,000 for data acquisition.  The final expenditure for the overall programme is estimated to be less than €80,000, owing to the reduced scope of work.

The planned plant optimisation programme has been delayed by equipment supply chain issues.  The necessary equipment to automate plant operations to allow continuous operation of the generators is expected on site next week and the upgrades will then commence immediately.  As stated in the announcement on 1 October 2021, the system optimisation project is expected to boost income from power generation by up to 65% by achieving 24-hour operations.

Mark Routh Prospex's CEO commented:

"It is disappointing that the well intervention at Rio Corbones-1 has not resulted in re-establishing gas production from the well.  However the static and dynamic pressure data collected from the producing wells will be used to determine remaining reserves and to optimise the infill well drilling campaign planned when permitting is in place in 2H 2022.  This low cost well intervention programme was well below budget and significantly, it has informed us that a more costly well intervention on this well such as velocity strings would not have been worthwhile.

"At Rio Corbones-1 the reservoir and previous production data indicated that there was still a significant volume of gas in place.  We were not aware of the full extent of the aquifer that we encountered.  The information gleaned from this re-entry will give us a greater understanding of the geology in the El Romeral area.

"It is frustrating that the supply of equipment has delayed the plant optimisation programme, but this will be underway as soon as the necessary parts arrive on site next week.  I will update shareholders as soon as we have firm data on the expected increased power generation capacity."

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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