Prospex Oil & Gas (PXOG)  announced on Thursday that it raised £720,000 through an oversubscribed placing of 600 million shares.

The funds are to be used to fund Prospex’s acquisition of a 49.9% indirect stake in El Romeral, an integrated gas production and power station in Southern Spain.

The AIM-listed firm also said the proceeds would help fund its 2020 work programme planned for its 15%-owned 830 Bcf Tesorillo gas project in Spain.

The shares which were raised at a price of 0.12p, and are expected to begin trading on or around 11 February 2020, the company said.

Shares in Prospex Oil & Gas were trading 3% higher during Thursday trading

Prospex Non-executive Chairman, Bill Smith, said, "Securing these funds at close to market prices from new and existing shareholders and certain members of the Board represents an endorsement of the low risk, low cost opportunity that El Romeral offers to build material production and revenues.”

El Romeral was constructed in 2001-2002 at a cost of c. €10 million, and has three production licenses with three wells supplying gas to a 8.1 MW power station, currently operating at c. 22% capacity, the company said.

Mr. Smith added: “Following this, and once the Podere Maiar-1 well in Italy comes online later this year as we anticipate, our portfolio of producing wells will stand at five, which, when combined, will have the potential to generate over 9,000,000 scm net in 2021. At this rate and at current gas prices, our annual revenues alone will exceed our current market capitalisation.”  

Three directors in Prospex participated in the placing, including CEO Edward Dawson who acquired 50 million placing shares. 

Non-executive chairman Bill Smith and Non-executive director James Smith both subscribed for 33.3 million shares each.

Bill Smith told investors: "Prospex is not just a value play, however. Significant upside has been identified across our portfolio including at the Tesorillo Project in Spain, which has the potential to hold up to 830 Bcf of gross prospective gas resources, and at Podere Gallina in Italy where, in addition to the 13.3bcf gas reserves of the Selva field, a CPR estimates the licence area holds 14.1 bcf gross contingent resources and 91.5 bcf gross prospective resources (Best Estimate).  With work programmes underway or planned to de-risk these company-making resources, the growth story behind Prospex remains very much intact."

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