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Prospex Energy shares gain as PM-1 gas production soars in Q4

15:02, 31st January 2024
Victor Parker
Vox Newswire

Prospex Energy (PXENFollow | PXEN, an investor in European gas and power projects, issued an activity report from its Podere Maiar-1 (PM-1) gas facility at Selva field, Italy based on quarterly data by operator Po Valley. Prospex has a 37% interest in Selva and Po Valley has the remaining 63%.

Prospex noted that PM-1 had performed "very consistently" during its confirmatory programme carried out in Q4 2023 with production levels tested at various rates from 42,000 scm/d to 62,000 scm/day. The gas producer announced that production had been set to 78,000-80,000 scm/d following favourable final test results in January. PM-1 is currently supplying gas to BP Gas Marketing under an 18-month agreement.

PM-1's quarterly production on a 100% basis was 4,180,015 scm of gas (1,546,605 scm net to Prospex) and revenue for the quarter ending 31 December 2023 on a 100% basis was €1,773,302 (€656,122 net to Prospex). Volatility in gas prices persists with the current TTF spot price of ~€0.325/scm being 19% lower than the €0.40/scm weighted average price received by PXEN during the quarter.

Mark Routh, CEO of Prospex, commented: "The operator of our Selva Malvezzi production concession, Po Valley Energy, continues with the sound reservoir management of the asset.  The ongoing monitoring and maintenance of the production facilities and the well performance ensures it not only delivers the optimum gas production rates but moreover guarantees safe and reliable operations.

I look forward to updating shareholders as we progress the necessary activities to secure the development drilling programmes for the contingent resources at Selva North and Selva South and for the target of converting prospective resources at East Selva and Riccardina into proved, developed and producing reserves."


View from Vox

More positive news from Selva as Prospex and operator Po Valley announced gas production at PM-1 had been set at 78,000-80,000 scm/d post-quarter following a successful confirmatory period in Q4 and favourable test results in January. The asset was first commissioned in August 2023. Markets reacted positively to the news, sending PXEN shares 13% higher on Wednesday.

In October 2023, Po Valley reported production at PM-1 running at 62,000 scm/d, in line with the earlier outlined testing programme. The confirmatory period tested 42,000-62,000 scm/day before ramping up to 78,000-80,000 scm/d. Po Valley will continue testing and monitoring the well over the following weeks at its current rate, to be followed by another slick line operation programme, before a long-term flow rate is set. This testing is necessary to determine the optimal flow rate to ensure no debris accumulation and to establish the most efficient long-term production rate, and in turn a reliable income stream from the asset.

Further upside potential at the Selva concession is also advancing, with operator Po Valley progressing agreements with local landowners and the permitting process with regulatory authorities in order to deliver planned drilling programmes at Selva North, South, and East. Production income from PM-1 will help fund development drilling for Selva North and Selva South, and to convert prospective resources at Selva East into proved, developed and producing reserves in the near term.

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