Prospex Oil and Gas PLC Annual General Meeting Statement (4306E)
04 Julio 2019 - 01:00AM
UK Regulatory
TIDMPXOG
RNS Number : 4306E
Prospex Oil and Gas PLC
04 July 2019
Prospex Oil and Gas Plc / Index: AIM / Epic: PXOG / Sector: Oil
and Gas
4 July 2019
Prospex Oil and Gas Plc ('Prospex' or the 'Company')
Annual General Meeting Statement
Prospex Oil and Gas Plc, the AIM quoted investment company, is
holding its Annual General Meeting ('AGM') later today. At the
meeting, Ed Dawson, CEO of Prospex, will make the following
statement:
"The commencement of gas production at our 50%-owned Bainet
field in Romania, the assignment of 2P gas reserves of 2.26Bcf to
our 17% interest in the Selva field onshore Italy, the reporting of
a GBP779,904 net profit for the year ended 31 December 2018 - all
the above represent firsts for Prospex Oil & Gas and all have
been achieved in just over a 12-month period. These milestones and
the speed in which they have been met are testament to the quality
of our portfolio of late stage European onshore projects, which
also includes the large Tesorillo gas project in Spain; our
management and technical teams who are responsible for securing
material interests in viable projects at attractive prices; and the
successful execution of defined work programmes to unlock
value.
"With first production, first reserves and first profits all now
booked, we are hungry for seconds. Specifically, bringing a second
field into production and, subject to further success on the
ground, reporting a second net profit for 2019 are targets for the
Company over the next twelve months. Progress is being made.
Following excellent test flow rates at the Podere Maiar well in
January 2018, the Selva field on the Podere Gallina licence onshore
Italy was declared a commercial discovery. Since then we have been
working with our partners to bring Selva online as rapidly as
possible. With this in mind, January 2019's preliminary award of a
production concession for Podere Gallina keeps first production on
course to commence in 2020 at a gross rate of up to
150,000m3/day.
"The final award of the production concession will not just
cover the Selva field, but also multiple follow-on targets and
prospects on Podere Gallina, including targeting the up dip of two
of Selva's historic gas producing North Flank and South Flank
reservoirs. These are estimated by geophysical services
consultancy, CGG Services (UK) Limited ('CGG') to have a 60% - 70%
chance of holding 14.1Bcf of gross contingent resources ('2C'). In
addition, CGG has assigned aggregate gross prospective resources
(best estimate) of 91.5Bcf to four further large prospects. In all,
our 17% interest in Podere Gallina currently equates to net 2P
reserves / 2C resources / prospective resources of 2.26Bcf /
2.40Bcf / 15.56Bcf respectively, providing significant asset
backing to the Company, particularly when compared with our current
market valuation.
"Activity in the year ahead will not be confined to Italy. At
the 38,000ha Tesorillo Project in southern Spain, multi-strand work
programmes are ongoing. These are centred on de-risking targets
ahead of drilling, confirming the location of two new exploration
wells to test a historic gas discovery and proving up the huge
resource base. According to a report by Netherland Sewell and
Associates in 2015, Tesorillo could hold gross unrisked Prospective
Resources of 830Bcf of gas (Best Estimate), with upside in excess
of 2Tcf. With numbers such as these, drilling success in Spain
would be transformational.
"In Romania, it was disappointing to report earlier this week
that the Bainet-2 well failed to encounter commercial volumes of
hydrocarbons. While this well was targeting a look alike prospect
to the nearby producing Bainet field, the result demonstrates how
discoveries are only made via the drill bit. At an estimated all in
cost of EUR260,000 net to Prospex, Bainet-2 was a low cost well
with an attractive risk / reward trade-off. As the Suceava
Concession itself and nearby area already hold multiple producing
fields and historic discoveries, Bainet-2 has limited bearing on
the additional prospects at Suceava which we can target. We intend
to fully evaluate the technical data gained from the well and work
with the operator, Raffles, to draw up a forward plan for the
licence.
"All three of our projects hold historic discoveries, multiple
prospects and leads, and benefit from easy access to
infrastructure. Our existing asset base therefore provides us with
considerable run-room to build on the two discoveries we have
already made in Romania and Italy and grow the value of the Company
further. Last month, we reported a 77% increase in the net book
value of our investments to GBP4,307,617, a figure which is more
than twice our current market valuation. In our view, this is very
much the start. With much activity planned across our assets over
the next 12 months, including bringing Selva online, I look forward
to providing further updates on our progress, as we look to
continue to expose our shareholders to value trigger events and in
the process generate value for our shareholders."
* * 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
Colin Rowbury Novum Securities Limited Tel: +44 (0) 20 7399
John Belliss 9427
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.
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END
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