Prospex Oil and Gas releases 1H19 interim results

Operational overview

• Podere Gallina Exploration Permit, onshore Italy - on course for first gas production in 2020.
- Preliminary award of production concession keeps first gas at Selva field on track to commence in 2020 at a proposed initial rate of up to 150 000 m³/d.
- First reserves and contingent resources booked after Competent Person’s Report assigns 2P reserves/2C resources/prospective resources of 2.26 billion ft3/2.40 billion ft³ /15.56 billion ft³, respectively, net to Prospex's 17% interest.
• EIV-1 Suceava Concession, onshore Romania - production at Bainet field continues in line with expectations.
- Bainet field performing in line with average production rate of 15 000 m³/d assumed by Joint Venture for 2019 budgeting purposes.
- Enlargement of Suceava Exploration Concession to 984 km².
- The drilling of low cost Bainet-2 well targeting Bainet West, a lookalike Bainet gas prospect, resulted in a dry hole for estimated all in cost of €260 000 net to Prospex.
- Suceava still holds multiple prospects and leads including a gas discovery.
• Tesorillo Gas Project, onshore Spain - ongoing work programme at the 38 000 ha exploration licence in Southern Spain.
- De-risking up to 830 billion ft³ of gas (Best Estimate) of gross unrisked Prospective Resources (Source: NSAI CPR 2015).
- Working towards an informed decision of whether to drill and increase stake to 49.9%.
- Updated Competent Person’s Report to be commissioned.

Financial overview

• £680 906 net loss after taxation from continuing operations (1H18 loss: £540 761).
• £52 861 increase in the shareholders total equity value to £6 349 995 (Full Year 2018: £6 297 134).
• 10% decrease in administrative expenses to £484 713 (1H18: £538 680).
• £800 000 raised via placing of 400 000 000 new ordinary shares to fund the company’s share of costs for the 2019 Suceava work programme, including drilling Bainet-2 well.

Edward Dawson, Managing Director of Prospex, said, “The majority of the company’s shareholder equity value of £6 349 995 is backed by its 17% interest in the Podere Gallina licence in Italy following the commercial gas discovery there in 2018. During the period, our interest was assigned net 2P reserves of 2.26 billion ft³ and net contingent and prospective resources of 2.40 billion ft3  and 15.56 billion ft3, respectively in an updated CPR, which also assigned €4.6m (net) to the 2P reserves at the Selva field. Not only did the CPR demonstrate the significant asset backing behind the company, but also the considerable run room that remains in terms of additional prospects and leads. Following preliminary government approval of a production concession application in January 2019, we are working with our partners to bring Selva into production at an initial rate of up to 150 000 m³/d in 2020, and in the process generate a material revenue stream for the company.

“Elsewhere, in Spain a multi-strand work programme is underway at the Tesorillo gas project, to de-risk up to 830 billion ft³ (Best Estimate) of gross unrisked Prospective Gas Resources and identify potential well locations. In Romania we are evaluating reprocessed seismic data before agreeing the best way forward for the Suceava concession with our partner. Whilst the Bainet-2 well result was disappointing, we believe there are still compelling prospects and leads, not dependant on Bainet-2’s results, to be pursued in the concession. Finally, we continue to run the rule over a number of new ventures, as we focus on growing our portfolio of projects, building on our track record of participating in four new wells in three years, and at the same time adding to the two commercial gas discoveries we have made to date.”

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/23092019/prospex-oil-and-gas-releases-1h19-interim-results/