Company Announcements

Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and Gas

23 November 2022

Prospex Energy PLC

('Prospex' or the 'Company')

Italy: Selva Field Development Update

Start of Gas Plant construction works and pipeline installation at Selva

Prospex Energy PLC (AIM: PXEN), the AIM quoted investment company focused on European gas and power projects, is pleased to provide an update on the development activity on the Podere Gallina Licence (the 'Licence') located onshore in the Po Valley region of northern Italy, in which lies the Selva gas field within the Selva Malvezzi Production Concession ('Selva').  Po Valley Energy Limited (ASX:PVE) ('Po Valley' or the 'Operator') released an update on the ASX overnight on 23 November 2022.  Prospex holds a 37% working interest in the Podere Gallina licence with the Operator holding the remaining 63%.

Highlights

·    Final approval to commence development activity received on 21 November 2022

·    Works to prepare the tie-in to the SNAM gas grid network commenced on 19 November 2021

·    Gas plant construction work and pipeline installation work is to commence 28 November 2022

·    Podere Maiar remains on track for first gas in early Q2 2023

·    Final stage of production concession application for Prospex submitted

·    Po Valley, the operator, in dialogue with off-take partners for the sale of gas from Podere Maiar

Mark Routh, Prospex's CEO, commented:

"We are extremely pleased that Po Valley has confirmed that final permissions have been granted to start the development works on site and that Podere Maiar remains on schedule and on budget to achieve first gas early in the second quarter of 2023.  Initial conversations with gas off-take partners for the sale of gas have commenced, which we have decided to sell jointly with the Operator Po Valley under a joint marketing agreement, which we believe will optimise the value of our gas sales and provide better value for our shareholders.

"In addition, the submission of our final application to the Ministry of the Environment and Energy Security to be approved as a gas producer took place on 21 November 2022.  We believe that next year will be a transformational year for Prospex as we become a producer of gas in Italy as well as in Spain and very much look forward to keeping shareholders updated on our progress."

Gas Plant Construction and Pipeline Installation

On 19 November 2022, the engineering work commenced to connect the suspended well at Selva to the SNAM S.p.A. (BIT:SRG), the Italian energy infrastructure company's grid tie-in connection point.

On 21 November 2022 Po Valley confirmed that construction works at the Selva well site and the 4‑inch pipeline installation will commence on 28 November 20222.  The project is on schedule for first gas from Selva , from the Podere Maiar-1 well, early in the second quarter of 2023.

Production Concession Application submitted for Prospex

In addition, on 21 November 2022 formal applications were submitted to the Ministry of the Environment and Energy Security for Prospex's two wholly owned subsidiaries which own the working interest in the Podere Gallina Licence, PXOG Marshall Ltd (17% of the Licence) and UOG Italia Srl (20% of the Licence) to be assigned to the Selva Malvezzi Production Concession which was approved by the Ministry in July 2022.  This is the final step of the approvals process for Prospex to be officially recognised as a gas producer in Italy from the concession operated by Po Valley.

Gas Sales Agreements

Po Valley has confirmed that it is in dialogue with several counterparties to offtake and sell the gas from Selva on behalf of the Joint Venture.  Bids to take delivery of our gas at the SNAM connection point to the national grid which is less than 1 km from the Podere Maiar-1 (Selva) well site are being evaluated and a joint marketing agreement will be drawn up to facilitate joint sales.

New name for the Italian Regulator

The new government in Italy has renamed the Ministry which is responsible for approvals and permitting of activities carried out by energy companies to: The Ministry of the Environment and Energy Security, previously the Ministry of Ecological Transition.  The new Minister of the Environment and Energy Security is Gilberto Pichetto Fratin.  The new name of the Ministry (which is subject to a final decree) signals a change in emphasis and attitude by the Italian authorities towards natural gas, which has been acknowledged by the EU as the transition fuel to move Europe towards the decarbonisation of energy supply.  This is a positive move as Europe and Italy in particular address the energy shortfalls being experienced because of world events over the past year.

* * ENDS * *

For further information visit www.prospex.energy or contact the following:

Notes

Prospex Energy 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.  The Company will rapidly scale up gas production in the short term to generate internal revenues that can then be deployed to develop the asset base and increase production further.

About Selva:

The Podere Gallina Licence is in the Po Valley region of northern Italy.  The licence contains the currently shut‑in Selva gas-field as well as exciting exploration and development opportunities.  The Podere Maiar-1 well at Selva was completed in December 2017 and successfully found a commercial gas accumulation up-dip of the previous wells on the Selva field.  The Company has a 37% working interest in the Podere Gallina licence.

The Podere Gallina Licence holds independently verified 2P gross reserves of 13.4 Bcf (5.0 Bcf net to Prospex at 37% WI) in Selva, gross Contingent 2C Resources of 14.1 Bcf (5.2 Bcf net) and a further 88.2 Bcf of gross Best Estimate Prospective Resources (un-risked) (32.6 Bcf net).^[1]

An independent Competent Person's Report of the Podere Gallina Licence was prepared by CGG Services (UK) Limited in January 2019 on behalf of the joint venture.^[1] It attributed a total of 379 MMscm (13.4 Bcf) gross 2P reserves for the Selva redevelopment project.

References:

[1] Source: "Competent Person's Report Podere Gallina Licence, Italy" prepared by CGG Services (UK) Limited in January 2019 https://bit.ly/3nZNfYf].

Glossary:

scm                        Standard cubic metres

MMscm               Million standard cubic metres

Bcf                          Billion standard cubic feet

MMscfd               million standard cubic feet per day

Qualified Person Signoff

In accordance with the AIM notice for Mining and Oil and Gas Companies, the Company discloses that Mark Routh, the CEO and a director of Prospex Energy plc has reviewed the technical information contained herein.  Mark Routh has an MSc in Petroleum Engineering and has been a member of the Society of Petroleum Engineers since 1985.  He has over 40 years operating experience in the upstream oil and gas industry.  Mark Routh consents to the inclusion of the information in the form and context in which it appears.

The updated Corporate Presentation for Q4-2022 is available on the Company's website at https://www.prospex.energy/home/