TIDMPXEN
RNS Number : 5554R
Prospex Energy PLC
09 March 2021
Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and
Gas
Prospex Energy PLC ('Prospex' or the 'Company')
Placing to Raise GBP750,000
Prospex Energy PLC, the AIM quoted investment company focused on
European gas and power projects, is pleased to announce that it has
raised GBP750,000 gross via a placing of 50,000,000 new ordinary
shares of GBP0.001 each in the Company ('Ordinary Shares') (the
'Placing Shares') at a price of 1.5 pence per Placing Share (the
'Placing Price') (the 'Placing').
Warrants will also be issued to Placing subscribers, on the
basis of one warrant per two Placing Shares subscribed for, with an
exercise price of 3p (the 'Warrants'), and a term of two years from
Admission. The Placing was undertaken with new and existing
investors as well as a Director of the Company who is acquiring
Placing Shares with an aggregate value of GBP30,000.
Use of Proceeds
The net proceeds of the Placing will primarily be used to fund
planned programmes at the El Romeral integrated gas production and
power station operation in southern Spain ('El Romeral'), and the
Podere Gallina licence onshore Italy where first gas at the Selva
field is expected to commence later in 2021, subject to the
granting of a production concession. The balance of the net
proceeds will be used for general working capital purposes,
including the evaluation of new business opportunities.
El Romeral
As announced on 1 March 2021, the acquisition of El Romeral by
Tarba Energia ('Tarba') in which Prospex owns a 49.9% interest in
Tarba B shares, completed on 28 February 2021. A proportion of the
proceeds raised will go towards supporting operations during the
post transition period at El Romeral, which includes three
producing wells that supply gas, through its own network, to a 100%
project-owned 8.1 MW power station.
In addition, the proceeds will help fund a further evaluation,
and permit supporting studies, of already identified opportunities
to increase gas production and electricity generation at El
Romeral's power plant towards its nameplate capacity from the
current 22% level. These opportunities include development
locations and very-low risk prospects (where there is a chance of
success of over 70%) which have been assigned gross contingent and
prospective gas resources of 5Bcf and 90Bcf respectively, as well
as the potential to undertake workovers on existing wells to
enhance recovery rates. Historically, the power station at El
Romeral regularly produced c. 60,000 Mwh per annum when gas was not
a limiting factor.
Podere Gallina
With formal technical environmental approval from the Italian
Environment Ministry in place, the development of the Selva
Malvezzi Gas-Field ('Selva') in northern Italy, in which Prospex
holds a 17% interest, is awaiting final sign off by ministerial
decree, the issuing of the required INTESA (intergovernmental
agreement) and the final grant of a production concession from
Italy's Economic Development Ministry. As previously disclosed, the
Company intends to finance its share of the development of Selva,
which has gross gas reserves of 13.3bcf (2P), via non-equity
funding, however, in order to be in a position to move quickly on
receipt of final approvals, a portion of the proceeds of the
Placing may be used to fund the purchase of the next phase of
production equipment.
Under the proposed development plans for Selva, which
historically produced 83Bcf of gas between 1960 and 1984, a fully
automated gas plant will initially be installed at the existing
Selva/ Podere Maiar 1dir well site, along with a one-kilometre-long
pipeline to connect the well with the nearby Italian National Gas
Grid. Based on dynamic reservoir studies, an initial daily
production rate is being targeted at Selva of up to 150,000 cubic
metres (5.3 mmscf/d) from two gas-bearing reservoirs, C1 and C2, in
the Medium-Upper Pliocene sands of the Porto Garibaldi formation.
The planned Selva development has a small footprint of less than
half a hectare and will have no emissions from any future
commissioning of its gas inventory.
Director Dealing
As part of the Placing, James Smith, Non-Executive Director, is
acquiring the following number of Placing Shares:
No. of Placing Shares acquired Resultant no. of % of share capital as
Ordinary Shares enlarged by the Placing
James Smith 2,000,000 3,733,200 2.69
James Smith, as a Director of the Company, is classified as a
related party under the AIM Rules for Companies and his
participation in the Placing is deemed a related party transaction
pursuant to AIM RULE 13 . Accordingly, the Directors, other than Mr
James Smith, having consulted with Strand Hanson Limited, the
Company's nominated adviser, consider that the participation of Mr
James Smith in the Placing is fair and reasonable insofar as the
Company's shareholders are concerned.
Prospex non-executive Chairman, Bill Smith, said, "With the
acquisition of the El Romeral gas and power project complete and
the appointment of a new government in Italy, which has the
potential to speed up the final approval process for the
development of the Selva gas field, the funds raised will enable us
to move quickly at both projects.
"As previously disclosed, the acquisition of El Romeral and the
development of Selva could see Prospex exit 2021 with an annualised
net production run rate equivalent to 7,500,000 scm per day. At
current gas prices, this equates to annualised revenues several
times greater than our historic annual corporate costs. We
anticipate this level of production would propel Prospex into a
position whereby the significant revenues and cashflow generated
will enable us to pursue the additional low risk exploration and
development opportunities that have been identified across both
assets to grow production and revenues further. With a fair-wind
and non-equity development financing in Italy, we do not anticipate
raising any further equity capital prior to our Italian assets
coming on stream. We now have the assets to build a highly cash
generative business focused on European gas and power opportunities
and I look forward to providing further updates on our
progress."
Admission to Trading on AIM and Total Voting Rights
The Placing Shares will rank pari passu with the existing
Ordinary Shares. Application will be made for the Placing Shares to
be admitted to trading on AIM ('Admission') and Admission is
expected to occur on or around 23 March 2021.
Following Admission, the Company will have in issue a total of
138,543,800 Ordinary Shares. The Company has 7,361 shares in
treasury, therefore the figure of 138,536,439 should be used by
shareholders as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in, the share capital of the Company
under the FCA's Disclosure Guidance and Transparency Rules.
Broker Warrants
The Placing was completed by Novum Securities Limited ("Novum").
As part of Novum's compensation for their work undertaken pursuant
to the Placing, Novum shall be issued with 1,920,000 warrants to
subscribe for, in aggregate, 1,920,000 new Ordinary Shares at an
exercise price of 2.25 pence per new Ordinary Share for a period of
two years from Admission.
This announcement contains inside information.
* * ENDS * *
For further information visit www.prospexoilandgas.com or
contact the following:
Edward Dawson Prospex Energy PLC Tel: +44 (0) 20 3948
1619
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Jack Botros
Colin Rowbury Novum Securities Limited Tel: +44 (0) 20 7399
Jon Belliss 9427
Duncan Vasey Peterhouse Corporate Finance Tel: +44 (0) 20 7469
0932
Frank Buhagiar St Brides Partners Ltd Tel: +44 (0) 20 7236
Cosima Akerman 1177
Notes
Prospex Energy PLC is an AIM quoted investment company focussed
on high impact onshore and shallow offshore European gas and power
opportunities. The Company acquires undervalued projects and then
applies low cost re-evaluation techniques to identify and de-risk
prospects. Prospex currently holds a portfolio of three projects:
the Podere Gallina Permit in Italy where first gas at the Selva
field is targeted for 2021; the El Romeral gas and power project in
Spain which includes three producing wells that supply gas to a
100% project-owned 8.1MW power plant; and the large scale Tesorillo
gas project in southern Spain which has the potential to hold gross
un-risked Prospective Resources of 830 Bcf of gas (Best Estimate),
with upside in excess of 2 Tcf. The Company's strategy is to
rapidly scale up gas production in the short term to generate
internal revenues that can then be deployed to develop the asset
base and increase production further.
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