Prospex Energy (PXEN ), an oil and gas investment company, has said that its partner and operator Po Valley Energy Limited has received approval for production at Podere Maiar gas field within the Selva Malvezzi concession in Po Valley, Italy. Prospex holds a 37% working interest in the Podere Maiar licence, with Po Valley Energy holding the remaining 63%. First gas is expected in H1 2023.
Italy's Ministry of Ecological Transition has fully approved the production concession at Selva on the assumption that the two parties meet all development costs. Development contracts can now be awarded for the construction of automated gas plan facilities, the installation of a 4-inch 1km pipeline, and a connection to Italy's national grid network operated by SNAM.
Mark Routh, CEO of Prospex, commented: "We are extremely pleased to have received the final approval of the Production Concession from the Italian regulatory authority, the Ministry of Ecological Transition. This allows work to commence immediately to connect the suspended Podere Maiar-1 well to the adjacent National Gas Grid operated by SNAM. I acknowledge the hard work and advanced planning by the Operator's team in Italy whose perseverance and professionalism has led to securing this major milestone for both Po Valley and Prospex.
The development of this indigenous gas field is good for local jobs, boosts the economy of the region and although relatively small, this gas production will go some way towards alleviating the energy and gas supply shortfalls being experienced in Italy and indeed the whole of Europe."
Investors cheered today's news, sending Prospex shares up 14%, meaning they're now up 33% YTD and 70% in the past 12 months, despite challenging economic conditions and a bear market in equities.
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Just four days ago Prospex announced it had raised £1.87m to fund its gas project at Selva. At that time, Mr. Routh commented:
"Currently we remain on schedule for first gas from the Selva field in Q2 2023 (subject to the balance of the funding being available), where we predict substantial revenues to be generated from the gas production."
As mentioned above, Prospex has managed to beat the general downturn in equities with an impressive performance over the past 12 months. 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."
Last month, Prospex kick-started installation of two solar diversification projects - Project Apollo and Project Helios - at the El Romeral power plant in southern Spain, in which the company holds a 49.9% working interest through its interest in Tarba Energia. The two projects are expected to generate over 5 MW of clean energy.
Additionally, natural gas operations at the El Romeral site have yielded strong revenues for Prospex amid rocketing energy prices in Spain. Italy faces a similar energy crisis, hence the impetus to develop Selva quickly. As Europe struggles to achieve energy independence, companies like Prospex are well-positioned to serve demand for local production, particularly in natural gas and renewables.
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