Prospex (PXEN ), an oil and gas investment company, updated markets today on costs and schedule to first gas at its Podere Maiar gas field, within the Selva Malvezzi concession (Selva) in Po Valley, Italy.
Po Valley Energy Ltd, the project's operator holding 37% interest in the Podere Maiar license, has signed a contract with Italian engineering firm TESI to install the gas plant and pipeline for the project. A 4-inch pipeline will connect Podere Maiar to Italy's gas grid.
The TESI contract secures development costs and timing at Podere Maiar field, the company said. Construction cost will total €3.45m (£2.91m), €130K (£110K) less than previously forecast. Construction is scheduled for completion in Q1 2023, and Podere Maiar is now on track for first gas at the start of Q2 2023.
Prospex said it expects to be able to fund its share of Podere Maiar capital expenditures from existing resources.
Mark Routh, CEO of Prospex, commented:
"We are extremely pleased that the Operator has signed the construction contract with TESI on behalf of the Joint Venture. Signing the TESI contract is an important step for the Joint Venture, as it secures both the costs and the schedule to first gas which is now expected by the start of the second quarter of 2023, some three months ahead of previous schedule estimates.
Field development work is expected to commence mid-September with all construction and essential procurement contracts now in place."
View from Vox:
Prospex continues to make the right investments to answer strong European demand for locally produced energy, particularly in natural gas and renewables.
Just last week, Prospex shares jumped 14% after Italy granted the company approval for production at Selva Field, with first gas expected in Q2 2023. Days before that announcement, Prospex said it had raised £1.87m to fund operations at Selva. As has been the case with its El Romeral plant in Spain, Prospex's natural gas operations in Italy are expected to yield strong revenues amid rocketing energy prices.
The company's May's FY21 final results revealed steady expansion with a total assets increase of 56% to £8.9m, reflecting "measured recognition of positive changes in the forward curve of European gas prices as at 31 December 2021."
Investors have also welcomed Prospex's diversification into solar. Yesterday, we reported on the company's pilot solar Project Apollo, which saw a 41.5 kW solar array installed on the roof of its 49.9%-owned El Romeral gas plant in Spain. Project Apollo paves the way for the much larger Project Helios, a 5 MW (5000 kW) array, to be built next to El Romeral and cogenerate with the plant, sharing its connection to the Spanish grid. Project Helios is currently at FEED stage. Solar in the Toledo province of Spain currently has an ROI of only 3-4 years, making this an ideal hedge for the company.
Investors welcomed today's news, sending PXEN shares up 3.3%. Shares have completely defied the recent downturn in equities, rising 46% YTD and 90% in the past 12 months.
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