Prospex Oil and Gas PLC Concession Enlargement and Production Update (5236S)
12 Marzo 2019 - 1:01AM
UK Regulatory
TIDMPXOG
RNS Number : 5236S
Prospex Oil and Gas PLC
12 March 2019
Prospex Oil and Gas Plc / Index: AIM / Epic: PXOG / Sector: Oil
and Gas
12 March 2019
Prospex Oil and Gas Plc ('Prospex' or the 'Company')
Concession Enlargement and Production Update
New Gas Prospect Added to Portfolio Following Enlargement of
Suceava Concession, Romania
&
Bainet-1 Production Update
Prospex Oil and Gas Plc, the AIM quoted investment company, is
pleased to announce that it has been advised by the operator,
Raffles Energy S.R.L. ('Raffles'), that the National Agency for
Mineral Resources ('NAMR') has granted an enlargement ('Additional
Area') of the Exploration Area of the EIV-1 Suceava Concession (the
'Concession' or 'Suceava Exploration'), North East Romania. The
Additional Area awarded covers a new gas prospect that is similar
to the Bainet discovery which Raffles and Prospex successfully
drilled in November 2017 and started production in September 2018.
Prospex's wholly-owned subsidiary PXOG Massey Limited holds a 50%
non-operated interest in the now enlarged 984 sq km Concession.
The Additional Area is located near the Bainet discovery and
extends the Concession west towards the Bilca Gas Processing plant.
Importantly, the Additional Area contains a gas prospect which is
well defined on 2D seismic with similar seismic attributes to the
Bainet field. This Bainet look-a-like prospect lies at a similar
depth and is similarly positioned in relation to a fault. Bainet-1
was drilled to a total depth of 600m and encountered 9m of
reservoir with 8m of net gas pay consisting of a good quality
Sarmatian sandstone reservoir, similar to that found in fields
producing in and around the Concession. During testing, natural gas
containing over 99% methane flowed at a rate of approximately
33,000 cubic metres/day through an 8mm choke.
The Bainet-1 well has been connected to the Raffles operated
Bilca gas processing plant via a 2.2km flowline tie back to the
existing production infrastructure. After a six-month period of
production, Bainet's reservoir is currently performing in line with
expectations. Moving forward the Joint Venture is assuming an
average production rate of 15,000 m3 per day for 2019 budgeting
purposes. If a future discovery was made in the Additional Area, it
would be likely put on production in a similar fashion to
Bainet.
Prospex has agreed to reimburse Raffles a 50% share of the back
costs incurred maturing the prospect, in amount of EUR125,000 net
to Prospex and payable from production, after a well is drilled in
the Additional Area. A new exploration well would require
permitting approvals for drilling, site preparation and civil
engineering works and flowline connection to the gas processing
facility, the operator has commenced work on putting the required
permits in place.
Prospex's Non-Executive Chairman, Bill Smith, said, "With the
addition of a look-a-like Bainet structure, the enlargement of the
Suceava Concession immediately increases the inventory of low cost,
low risk gas prospects already mapped on the licence. With a less
than a year cycle between drilling, completion and production
start-up, the rapid development of Bainet demonstrates Romania's
credentials as a good jurisdiction to invest in. Thanks to a
positive regulatory backdrop and the 'Can do Attitude' of the
experienced operator, small but very meaningful accumulations can
be developed to generate attractive returns, if they are close to
infrastructure and costs are controlled. Based on our EUR400,000
share of costs to drill and complete the Bainet-1 well as a
producer and excellent access to existing infrastructure, the
Bainet look-a-like is one such opportunity which we hope will
generate attractive returns for the partners.
"Further investment in our Romanian portfolio makes huge sense
on both a standalone basis and part of prudent portfolio
management, as we focus on generating multiple routes to quick, low
risk cashflow. Combined with our 17% interest in the Podere Gallina
licence onshore Italy, where we are working with our partners to
bring the 13.3 bcf Selva Gas Field into production at a gross rate
of 150,000 cubic metres / day in 2020, and our Tesorillo Project in
Spain, where a technical work programme is underway to de-risk
gross prospective resources of up to 2tcf of gas which includes an
historic discovery, the value case for Prospex is clear.
"Furthermore, we continue to evaluate additional opportunities
that match our investment criteria, specifically late stage
European onshore projects with short timelines to value-generating
activity, such as drilling. I look forward to providing further
updates on our progress as we focus on monetising and growing our
asset base and in the process generating significant value for our
shareholders."
Competent Person Review
Carlos Venturini, Fellow of the Geological Society of London,
Exploration Manager has reviewed and approved the technical
information contained within this press release in his capacity as
a qualified person, as required under the AIM Rules.
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 Oil and Gas Plc Tel: +44 (0) 20 3948
1619
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Jack Botros
Duncan Vasey Peterhouse Corporate Finance Tel: +44 (0) 20 7469
0932
Frank Buhagiar St Brides Partners Ltd Tel: +44 (0) 20 7236
Priit Piip 1177
Notes
Prospex Oil and Gas 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.
This information is provided by RNS, the news service of the
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contact rns@lseg.com or visit www.rns.com.
END
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