REG - Prospex Energy PLC - Completion of Acquisition of 100% of Tarba
16/04/2025 07:00
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RNS Number : 1659F Prospex Energy PLC 16 April 2025
Prospex Energy plc / Index: AIM / Epic: PXEN / Sector: Oil and Gas
16 April 2025
Prospex Energy plc
("Prospex" or the "Company")
Completion of Acquisition of 100% of Tarba Energía and Viura Drilling
Schedule Update
Prospex Energy plc (AIM: PXEN), the AIM quoted investing company focused on
European gas and power projects, is pleased to announce that on 15 April 2025,
its wholly owned subsidiary, PXOG Muirhill Limited ("Muirhill") completed the
acquisition of Tarba Energía S.L. ("Tarba") through the purchase of the
entire shareholding held by Warrego Energy Pty Ltd ("Warrego") in Tarba (the
"Warrego Shares") (the "Acquisition"). Tarba is the company through which
Prospex holds its interest in the El Romeral production concessions and the
associated El Romeral gas-to-power plant situated near Carmona in southern
Spain. Tarba also holds the Tesorillo and Ruedalabola exploration permits
located in the Cadiz province of southern Spain.
Highlights
· Prospex now owns a 100% indirect working interest in both the El
Romeral asset and the Tesorillo and Ruedalabola exploration permits.
· Under the terms of the Acquisition, Muirhill shall pay to Warrego a
total consideration of €662,725, of which €100,000 is payable upon
securing drilling permits.
· The Acquisition has been funded entirely by the Company's existing
capital resources.
· Competitive acquisition price equating to US$0.016/mcf or
US$0.092/Boe.
· Potential to significantly increase production and revenues on the El
Romeral concession once the permits to drill the five new wells are approved.
· New senior member of staff appointed to the Company's executive
management team as Chief Operating Officer - already a shareholder of the
Company, having supported the Company in funding rounds.
· No objections received from the public and statutory consultees on
the Environmental Impact Assessment to drill the five wells on the El Romeral
concessions.
· This transaction delivers on the strategy of increasing the Company's
investments in European gas and specifically gas production.
Mark Routh, Prospex's CEO, commented:
"I am extremely pleased to announce the completion of our acquisition of
Tarba, which includes the El Romeral production concessions and the related
gas-to-power plant in Carmona. Importantly, the acquisition was funded
entirely by accumulated cash reserves from our investment portfolio and is
expected to lead to significantly increased production revenue once the
permits to drill the five new wells on the EL Romeral concessions are
approved.
"As announced in the RNS of 16 March 2025, the prospective gas resources
Prospex has acquired in the El Romeral asset alone, is at an equivalent price
of US$0.092/Boe. This acquisition delivers on the Company's strategy to
acquire undervalued projects with multiple, tangible value trigger points that
can be realised within 12 months of acquisition. Prospex sees further upside
in the concessions with further mapped structures to evaluate and drill once
the first five wells have been permitted and drilled.
"I am also pleased to announce the appointment of Richard Jameson as Chief
Operating Officer of Prospex Energy, a senior and highly qualified engineer
with whom I have worked previously. Richard will assist the executive
management team in managing our growing investment portfolio, which now
includes 100% of Tarba and, subject to the award of the onshore licence block
applications, will expand into Poland. Significantly, Richard is an existing
shareholder in Prospex having participated in funding the company since July
2022, owning 9,757,666 shares, approximately 2.42% of the Company."
El Romeral and Tarba Acquisition
Environmental Impact Assessment Consultation for the El Romeral 5-Well Permit
Applications
Following the public gazetting of the Statutory Consultation of the
Environmental Impact Assessment ("EIA") for the application to drill five new
natural gas wells on the El Romeral concessions on 19 February 2025, the
30-working day statutory consultation period closed on 4 April 2025.
Significantly no objections have been received from the public and statutory
consultees. Tarba is waiting for the completion of the reports from the
sub-delegation of the Government in Seville before the results on the
consultation is reported back to the Ministry in Madrid. From this point,
the Ministry in Madrid targets between 90 to 180 days for the final review and
approval, before it can issue an approval resolution granting the permits to
drill the five wells.
Whilst Tarba waits for the regulatory approvals process to complete, it is
progressing with key drilling preparatory work, including detailed well
design, sourcing of essential long-lead items and securing the necessary
contractors to deliver the five new production wells.
Background information on the Tarba Acquisition
Under the terms of the Tarba shareholders agreement with Warrego (the "SHA"),
Prospex, through its wholly owned subsidiary Muirhill, exercised its
pre-emption right to buy all of the Warrego Shares following the execution of
a Share Sale and Purchase Agreement (the "SPA") between Warrego and a
Third-Party buyer which triggered a right for Muirhill to acquire the Warrego
Shares. Pursuant to the SHA, Muirhill had 30 days in which to give notice to
match the price offered for the Warrego Shares. That notice was served on 19
March 2025 and Muirhill had a further 30 days in which to complete the
transaction. Completion occurred on 15 April 2025 within that timescale.
The total consideration for the Warrego Shares is €662,725, €100,000 of
which becomes payable when the permits to drill just three of the five wells
currently going through the regulatory permitting application process are
approved. Prospex has funded this acquisition entirely from its existing
cash resources.
In addition to the cash purchase price, the SPA requires the buyer to pay
Warrego a 5% gross overriding royalty on the gross revenues from any future
Tesorillo Project development (the "Tesorillo Project Royalty"). There is no
monetary cap or maximum amount payable in respect of the Tesorillo Project
Royalty. The Tesorillo and Ruedalabola permits are currently suspended.
The price offered to Warrego by the Third-Party buyer is required under the
SHA to be matched exactly and therefore the purchase price can be considered
as an independently derived value for the increased interests in the assets.
With respect to prospective resources acquired as part of this transaction,
the CPR( 1 ) assigns gross un-risked mid-case prospective resources in the
three El Romeral concessions of 90 bcf across 11 low-risk prospects that have
been mapped on the concessions. For the total acquisition price of
€662,725 for 50.1% of the 90 bcf of prospective resources, this translates
to an acquisition price of US$0.016/mcf or US$0.092/Boe.
As referenced in the RNS published on 8 April 2025, the El Romeral asset
currently represents 12% of the net production of the Company, with a 45%
contribution coming from the Viura asset in Northern Spain and 35% of the
Company's net production coming from the Selva Malvezzi asset in northern
Italy. Now that the acquisition of 100% of Tarba has completed, the El
Romeral asset will represent approximately 20% of the Company's enlarged net
production.
Schedule Four disclosure
As of 31 December 2024, Tarba reported unaudited total assets of €2.9
million and for the year ended 31 December 2024, an unaudited loss after tax
of €0.57 million. Given that Prospex is classified as an investment entity
under applicable accounting standards (IFRS10), consolidation of Tarba's
results going forward will not be required.
Viura Project Drilling Schedule Update
Further to the operational update RNS of 8 April 2025, Prospex has been
informed by HEYCO Energy, the operator of the gas field in northern Spain, of
its decision to wait for the completion of the 3D seismic reprocessing project
and the reinterpretation of that new data, before it starts the drilling
programme on site. This data driven approach will increase the operator's
chance of success and further optimise the subsurface well targets of the
future wells. HEYCO is also working on optimising the production from the
recently drilled Viura-1B well including managing its water production.
Establishing stable rates from the field will facilitate negotiations with the
banking syndicates for project financing. As such, drilling operations on
the Viura project are not expected to commence before 1 July 2025.
Appointment of Chief Operating Officer
The Company is pleased to announce the appointment of Mr Richard Jameson as
the Chief Operating Officer ("COO") of Prospex Energy. Richard will also
take the role of COO of Tarba to support the increased workload in the
management of the assets in southern Spain. Richard will be appointed as a
Director of Tarba as soon as the legal proceedings for that appointment can be
concluded. Until that point Mark Routh, the CEO of Prospex, will be the sole
director of Tarba upon the resignation of Mr Dennis Donald, up until yesterday
Warrego's representative on Tarba's Board of directors. Richard's role in
Prospex will initially be part-time, but his role will expand as the Company
continues with its growth strategy.
Richard is a highly qualified engineer with more than 40 years of experience
in the industry. He is also an existing shareholder of Prospex Energy having
participated in recent fund raises of the Company and acquiring further shares
on the market. Richard is now the beneficial owner of 9,757,666 shares in
Prospex Energy which represents 2.42% of the current issued share capital.
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.
* * ENDS * *
For further information visit www.prospex.energy (http://www.prospex.energy)
or contact the following:
Mark Routh Prospex Energy PLC Tel: +44 (0) 20 7236 1177
Ritchie Balmer Strand Hanson Limited Tel: +44 (0) 20 7409 3494
Rory Murphy
Andrew Monk (Corporate Broking) VSA Capital Limited Tel: +44 (0) 20 3005 5000
Andrew Raca (Corporate Finance)
Neil Passmore Hannam & Partners Tel: +44 (0) 20 7907 8500
Leif Powis
Ana Ribeiro / Charlotte Page St Brides Partners Limited Tel: +44 (0) 20 7236 1177
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 El Romeral and Tarba
The El Romeral power plant is operated by Tarba, which is based near Carmona
east of Seville in the province of Andalucía, Spain. Prospex now owns an
indirect 100% working interest in Tarba which includes the three El Romeral
concessions and the gas-to-power plant.
The El Romeral gas and power project in Spain, has gas production wells which
supply gas to the 8.1MW power plant near Carmona in Southern Spain. It is
currently operating at about 30% of its full capacity because Tarba is waiting
on the permits to drill five further infill wells on the concessions to
increase production. Tarba is already categorised as a hybrid energy
provider with the successful installation of photovoltaic panels on the roof
of the plant in August 2022. Tarba sells electricity generated from the
plant on the spot market in Spain. The El Romeral licences comprise three
contiguous production concessions.
Tarba is pioneering a new hybridisation model that combines natural gas and
solar energy as sources for electricity generation in the ecological
transition process by developing a project to produce 5MW electricity using
photovoltaic solar energy ("Project Helios").
In 2023 and 2024, Tarba supplied enough energy to cover the electricity
consumption of approximately 6,700 homes in the area, even when operating the
facility at one third of its capacity. With future wells to be drilled on
the concessions, the plant is expected to reach its maximum nameplate
production capacity to sell 8.1MW of power into the grid. The combination of
further natural gas extracted from the concessions and the new photovoltaic
generation is expected to cover the energy supply of 20,100 homes per year.
About Tesorillo and Ruedalabola
The Tesorillo Project in the Cadiz province of Southern Spain comprises two
petroleum exploration permits, the Tesorillo and Ruedalabola Permits that were
approved as a joint investigation programme. The Tesorillo Project covers
94,000 acres and includes a known gas discovery at the Almarchal-1 well,
drilled in 1957. Prospex now owns an indirect 100% working interest in Tarba
and therefore 100% of the Tesorillo and Ruedalabola permits. The Tesorillo
Project is estimated to contain 831 Bcf gross unrisked prospective resources
on a best estimate basis and has excellent proximity to pipelines and
infrastructure. (Best Estimate Prospective Resource assessment independently
verified by Netherland, Sewell and Associates( 2 ) - 5 May 2015.)
On 12 May 2021, an application was submitted to MITECO (the Spanish Regulator)
to convert the vast majority of the existing Tesorillo Project to an
exploitation concession, together with a field development plan for approval
and all of the necessary supporting documents. The application was submitted
before the Climate Change Act 7/2021 of 22 May 2021 came into force. The
outcome of this application is still under consideration by MITECO and will
not be known for some time.
The Tarba team has continued to liaise with various government agencies to
progress drilling and environmental approvals for Tesorillo. Tarba is
targeting conventional sandstone gas reservoirs. There are no financial or
drilling commitments attached to the Tesorillo Project Exploitation Concession
application.
Qualified Person Signoff
In accordance with the AIM note 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 more than 40 years of 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.
Glossary:
Bcf Billion standard
cubic feet
Bcm Billion standard cubic
metres
Boe Barrels of Oil
Equivalent (where 1 MMBoe = 5.8 Bcf)
MMBoe Million Barrels of Oil Equivalent
mcf Thousand standard
cubic feet
MMscfd Million standard cubic feet per day
MMscm Million standard cubic metres
MMscm/d Million standard cubic metres per day
MWh Mega Watt hour
scm Standard cubic metres
scm/d Standard cubic metres per day
TTF The 'Title Transfer
Facility' - a virtual trading point for natural gas in the Netherlands.
References: -
1 El Romeral CPR
(https://prospex.energy/wp-content/uploads/2023/06/El-romeral-estimates-2019.pdf)
- Netherland, Sewell and Associates - 30 June 2019
2 Tesorillo CPR
(https://prospex.energy/wp-content/uploads/2023/07/Updated-NSAI-Prospective-Resources-Report-Tesorillo-Spain-5May15.pdf)
- Netherland, Sewell and Associates - 5 May 2015
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