The Selva gas field, located in the 331km² Podere Gallina Exploration permit, had a significant resource upgrade by independent subsurface technical services consultancy CGG Services (UK) Limited.
The field, located in the Po Valley region of Italy, was upgraded to 14.1bcf of contingent resources and 91.5bcf prospective resources.
Previously there was zero contingent resources and 52.7bcf of prospective resources. The 13.3bcf of proven and probable reserves remained unchanged.
Prospex Oil and Gas (PXOG) hold a 17% interest in Podere Gallina, leaving them net proven and probable reserves of 2.26bcf and net contingent resources of 2.4bcf.
Shares in Prospex Oil and Gas were trading 16% higher by midday
Commenting on the new resource estimate Prospex non-executive Chairman Bill Smith said: “It demonstrates significant scope for a low risk expansion of production at Selva through an additional 14.1bcf (2C) of natural gas contingent resources in the Selva North and South Flanks.”
He added: “Progress is being made to bring Selva online, specifically the preliminary award of a production concession earlier this year which keeps the field on track to commence production in 2020 at a gross rate of up to 150,000 cubic metres per day.”
He told investors that at the current production rate and gas prices, he expects significant net revenue to the company.
Brian Larkin CEO of United Oil and Gas (UOG) was also optimistic, adding: "This is a low-cost, high-return project, which is continuing to be progressed towards production. When Selva begins production in 2020 at a targeted rate of 150,000 cubic metres of gas per day, it will deliver significant cash flow to United”
Both companies said that Selva is on course for a 2020 first production, after a preliminary concession award by the Italian government in January.