Prospex Energy PLC Letter to Shareholders (8564O)
13 Octubre 2021 - 1:00AM
UK Regulatory
TIDMPXEN
RNS Number : 8564O
Prospex Energy PLC
13 October 2021
Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and
Gas
13 October 2021
Prospex Energy PLC ('Prospex' or the 'Company')
Letter to Shareholders
Prospex Energy PLC, the AIM quoted investment company (AIM:PXEN)
focused on European gas and power projects, announces that Mark
Routh, Prospex's CEO, has written to all shareholders to re-confirm
the Board's plans and vision for Prospex Energy.
His letter has been pasted below and can also be viewed on the
Prospex Energy website at: https://bit.ly/3atY8dF.
Mark Routh commented:
To all Prospex Energy Shareholders.
I am writing to you all to re-confirm the Board's plans and
vision for Prospex Energy which we believe will achieve the common
aim of growing the Company and increasing value for all
shareholders. Now that the requisitioned general meeting is behind
us, we need to move forward at pace. As a Board we are determined
to grow Prospex with an aim to become an operator focussing on
development and production gas assets across Europe at a time of
unprecedentedly high gas and electricity prices. We have also
reviewed our working practices, consulting with our advisers, to
improve our corporate governance.
Forward-plan and strategy
Prospex is focused on upstream gas developments & production
and electricity generation in North-West Europe.
We intend to expand our portfolio, which includes our currently
producing gas-to-power facility at El Romeral and our advanced
stage gas interests, with further gas-to-power projects and other
suitable energy projects.
The Company will target appraisal and development assets not
exploration. We will be evaluating assets already in production for
acquisition at fair market value. We are now underway with
optimising the assets already in the portfolio.
Deal Activity
Prospex's current portfolio is a springboard for further growth
opportunities. Organic growth is happening and new investments are
being considered.
All our assets are onshore. We would however look at offshore
gas projects but access to infrastructure for gas export is the key
to securing economic returns. A technically led subsurface
evaluation process will be central to delivering successful
deals.
Investment and acquisition size will vary according to the
available production linked financing. We will look to achieve
optimum debt levels, common practice in this industry, in order to
increase returns to shareholders with minimal risk.
After the general meeting, the Company has re-engaged with our
debt financiers to provide appropriately leveraged financing that
would limit the use of equity as far as possible and therefore
result in less shareholder dilution.
Spain
The El Romeral gas to power station in southern Spain (Prospex
49.9% working interest) is about to undergo significant low-cost
optimisation and upgrade work alongside a well workover programme
which we believe has a high chance of more than doubling
electricity generation output. I am visiting the plant and the well
sites next week to meet the team and the operational staff
delivering our plans. Top of my agenda will be to reaffirm a
culture which can deliver our strategic objectives whilst upholding
industry leading safety standards and minimising potential impact
on the environment. I always ensure that I visit operational sites
to see for myself any issues or opportunities that may be evident
from the ground upwards.
I shall also be re-engaging with the relevant local and national
regulators and authorities on the status of the Tesorillo permit
(with estimated 831 Bcf (gross) of unrisked prospective resource
and in which Prospex has a 15% working interest) now that any
leadership uncertainties at Prospex are behind us.
The forward plan remains the same, to drill a lost cost well on
the concession with a view to converting prospective resources into
proven reserves justified for development. Spain urgently needs
local onshore indigenous natural gas to fill the gap as the energy
transition process moves forward.
Italy
The Selva field in Italy is heading for first gas in the first
half of 2022. The Italian authorities are well advanced in the
process of approving the transfer of the planned 20% acquisition of
Selva from UOG. The transaction is by way of a corporate
acquisition. Prospex and UOG have firm legal advice that the
acquisition is not subject to pre-emption. Financing this
development and the acquisition is now back on track. It will be
delivered via a balance of both equity and debt finance. There is a
firm income stream predicted from the suspended well which flowed
gas at a commercial rate, thereby achieving an independently
verified proven gas reserve. The upside on the rest of the Podere
Gallina licence will be the next appraisal activity in our Italian
portfolio. I refer you to my letter to shareholders in August for
the detail on the development, the transaction and its financing
which is based on the January 2019 Competent Persons Report, which
can be found on our website.
Outlook
I will not repeat the comments made in my August letter to you
all on ESG and the European Energy situation which are still valid.
Actually, the situation has become even more serious and the
outlook for companies such as Prospex has become even more
positive.
The income stream from the current production at El Romeral over
the past four months has exceeded all prior targets and predictions
and will increase further after the current work programmes
complete. This, together with our near-term production forecast
from our existing and proposed increased share in the Selva field
means that we remain well positioned to grow this company which
should then be reflected in its valuation.
I look forward to your support in the coming months and I will
continue to maintain an open and constructive dialogue with all
shareholders.
Yours faithfully
Mark Routh
CEO Prospex Energy plc
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.
**ENDS**
For further information visit www.prospex.energy or contact the
following:
Mark Routh Prospex Energy PLC Tel: +44 (0) 20 7236
1177
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Colin Rowbury Novum Securities Limited Tel: +44 (0) 20 7399
Jon Belliss 9427
Duncan Vasey Peterhouse Capital Limited Tel: +44 (0) 20 7220
9797
Susie Geliher St Brides Partners Ltd Tel: +44 (0) 20 7236
Catherine Leftley 1177
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