Prospex Energy completes acquisition of Viura gas field in northern Spain
() , an investor in European gas and power projects, confirmed its acquisition of 7.5% of HEYCO Energy Iberia, which has majority ownership of the Viura gas field in northern Spain. The acquisition was enabled by a related fundraise that generated £4.2m earlier in August, 2024.
As part of the deal, Prospex has committed to fund 15% of Viura's development costs in 2024-2026. HEYCO Energy Iberia (HEI) recently increased its stake in Viura to 96.49%, including the concession, its reserves, existing production, and surface facilities. This translates to Prospex owning 7.24% of Viura.
In return for its 15% capex commitment, Prospex will earn a 10% coupon and 15% of HEI's production income until 's capital investment is repaid, at which point its share of net income will revert to 7.5%.
The Viura gas field onshore in northern Spain has original gas in place of 211 Bcf (6 Bcm) and 2P reserves of 105 Bcf (3 Bcm). To date, just 16 Bcf (0.5 Bcm) of gas has been produced from Viura, leaving a remaining 2P reserves of 90 Bcf (2.5 Bcm), which is 6.5 Bcf (0.18 Bcm) net to Prospex.
HEYCO Energy Iberia is developing a new well at Viura, the Viura 1B, which spudded on June 24, 2024 with drilling ongoing. The well is expected to reach the reservoir horizon in the next 2-3 weeks, and begin generating production revenues as early as October.
Mark Routh, CEO of Prospex, commenting: "I am extremely pleased to have closed the Viura transaction with HEYCO Energy which is a highly respected and competent operator in Spain. This acquisition has increased gas production and our booked gas reserves, with the potential for further upside from the very large remaining resources we have modelled in this very large gas field.
The development well Viura 1B is approaching its reservoir target and I look forward to updating shareholders with the results from that well as soon as we have them."
View from Vox
Prospex has confirmed the part acquisition of its third European producing gas asset - the Viura gas field onshore in northern Spain. This marks a significant milestone for the company. is already present in Spain through its El Romeral gas facility whose license was recently extended until 2034.
Viura is operated by the well-established HEYCO Energy Iberia, majority owned by US-based HEYCO Energy Group. The latter made a significant investment into through the aforementioned placing and will own 10% of following admission, making it the company's largest shareholder. This represents further validation of 's portfolio and endorsement of its assets and strategy by a key industry player.
Prospex acquired 7.5% of HEYCO Energy Iberia, which owns 96.59% of Viura, therefore 's interest in Viura is 7.24%. The gas field has significant remaining 2P reserves of 90 Bcf (2.5 Bcm), which will materially boost s booked gas reserves, gas production, and cashflow in the very short term, with significant estimated upside.
At Viura, a development well Viura 1B is being drilled currently, and expected to reach its reservoir target within 2-3 weeks. Two additional development wells are scheduled for 2025 and 2026. Viura is one of 3 onshore gas fields in Spain. El Romeral, where Prospex has a 49.9% interest, is another, making Prospex now a leading gas producer in Spain. Five new wells on the El Romeral concessions are currently advancing through the permitting process.
As mentioned, Prospex is contributing 15% to Viura's development costs, including the Viura 1B well. Total development costs for 2024 are estimated at £23.4m, of which will cover £3.51m. For 2025/26, 's share is estimated at £4.84m, which is to be funded by future cash calls or from Phase 1 production or both.
Based on a conservative gas price assumption of €31/MWh, the 2025/26 figure will be reduced by production income to c. £2.7m by May 2025 when the cash call is due for the 2025 drilling campaign. If gas prices were higher over the coming year, then the requirement for further funding would be reduced or even negated. Currently, the TTF gas price is 30% higher than €31/MWh at c. €39/MWh.
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