REG - Prospex Energy PLC - Proposed Acquisition of 100% of Tarba Energía

Prospex EnergyAnnouncement

20/03/2025 07:15

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250320:nRST3857Ba&default-theme=true

RNS Number : 3857B  Prospex Energy PLC  20 March 2025

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

 

20 March 2025

 

Prospex Energy plc

("Prospex" or the "Company")

 

Proposed 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 it has signed a
binding agreement to become the sole shareholder of Tarba Energía S.L.
("Tarba") by purchasing the entire shareholding that Warrego Energy Ltd
("Warrego") holds in Tarba (the "Warrego Shares").  Tarba is the company
through which Prospex holds its investment in the El Romeral production
concessions and associated El Romeral gas-to-power plant situated near Carmona
in southern Spain and in the Tesorillo and Ruedalabola exploration permits
(currently suspended) in the Cadiz province in southern Spain.

 

Highlights

·    On completion, Prospex will own a 100% indirect working interest in
both the El Romeral asset and the Tesorillo and Ruedalabola exploration
permits

·    Total consideration of €652,725

·    Acquisition is being funded entirely by the Company's 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

·    This transaction demonstrates further momentum in building the
Company's investment strategy in European gas and production

 

Mark Routh, Prospex's CEO, commented:

"I am extremely pleased to announce the increased ownership in Tarba, the El
Romeral concessions and the related gas-to-power plant in Carmona.
 Importantly the acquisition is being made using 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.

 

"In terms of prospective gas resources acquired in the El Romeral asset alone,
the equivalent price of US$0.092/Boe is an excellent price by almost any
measure.  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."

 

Further information

Under the terms of the Tarba shareholders agreement with Warrego (the "SHA"),
Prospex, through its wholly owned subsidiary PXOG Muirhill Limited
("Muirhill") has 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, which it elected to do on 19 March 2025 and it has a further 30 days
in which to complete the transaction.  Completion therefore will occur on or
before 19 April 2025.

 

The price to be paid for the Warrego Shares is a total of €652,725,
€100,000 of which becomes payable when the permits to drill three of the
five wells currently going through the regulatory permitting application
process are approved.  Prospex is funding 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 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
€652,725 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 25 February 2025, the El Romeral asset
currently represents 10% of the net production of the Company, with a 55%
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.  Following completion of this transaction, 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 25 February 2025, the schedule for
the commencement of drilling operations at the Viura gas field in northern
Spain, operated by HEYCO Energy, has been pushed back by 6 to 8 weeks.  For
operational reasons, the operator has advised that the drilling operations on
the Viura project are now expected to commence in May 2025.

 

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 (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)
 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.  Prior to the
completion of the acquisition of the Warrego Shares, the El Romeral asset was
co-owned through Tarba by Prospex with a 49.9% working interest and Warrego
Energy Limited with a 50.1% working interest.  Warrego Energy is wholly owned
by Hancock Energy (PB) Pty Ltd in Perth Western Australia.

 

The El Romeral gas and power project in Spain, has gas production wells which
supply gas to an 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.  Prior to the completion of the acquisition of the Warrego
Shares, Prospex held a 15% working interest in the Tesorillo project via Tarba
with the remaining 85% working interest held by Warrego Energy Limited.
 Prospex also had the right to acquire a further 34.9% of the Tesorillo
Project on payment of €1.725 million prior to the drilling of the appraisal
well on Tesorillo.  On completion of the acquisition of the Warrego Shares,
this obligation will fall away since Prospex will own 100% of Tarba.  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 - Netherland, Sewell and Associates - 5 May
2015

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQFFFVLVVIALIE