Prospex Energy (PXEN) , an investor in European gas and power projects, issued an annual review and update on its operational and business development activities in 2023.
During the year, Prospex started gas production at Selva field in northern Italy, its second European project. Cashflows from Selva enabled a material reduction in debt, positioning Prospex well for future expansion. Selva is a joint venture between Prospex (37% interest) and operator Po Valley (63% interest). In February, Po Valley signed a gas sales agreement on behalf of the JV with BP Gas Marketing.
Construction of the gas processing facility at the Podere Maiar-1 (PM-1) wellsite at Selva field was completed in May within 3% of budget with the connection to the Italian SNAM gas grid. Gas production commenced on July 4, 2023.
Prospex's other European project is the El Romeral power plant in southern Spain. In May, through Tarba Energía, 20 hectares adjacent to the power plant was leased for 25 years for Project Helios, a 5MW solar PV project. Helios will increase output from the El Romeral power plant by up to 60%.
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Overall, 2023 was a good year for Prospex as the company now has 2 producing, cash generative assets in Europe. A £1.87m fundraise last year enabled Selva's development and first gas in early July 2023, a significant milestone for Prospex. Commissioning of the new gas processing facilities at the PM-1 well site was completed in August.
In October, operator Po Valley reported production at the PM-1 gas well running at 62,000 scm/d, in line with the earlier outlined ramp-up and testing programme. The facility is expected to ramp up to at least 80,000 scm/d after the initial testing period concludes in December. Gross quarterly production in Q3 was reported at 5,658,117 scm (2,093,503 scm net to PXEN), and gross revenue for the quarter was €1.94m (€717k net to PXEN).
Meanwhile, Prospex's 49.9%-owned El Romeral power plant in Spain is expected to generate gross revenues of c. €1.8m in 2023 (c. €0.9m to PXEN). Prospex said permit applications were underway to drill 5 wells in Spain and 3 wells in Italy. The former should bring El Romeral nameplate capacity to 8.1 MW, to be later supplemented with 5 MW from adjacent solar.
On the business development front, Prospex said it passed up 2 farm-in opportunities - one because of high development costs, and the second due to a decision to defer a fundraise needed to complete the deal until next year. Prospex said it is actively pursuing self-funded acquisitions in order to minimise diluting investors.
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