Prospex Energy announces interim results for the six months ended 30 June 2025

Prospex Energy, the AIM quoted investment company focused on European gas and power projects, has announced its unaudited Interim Results for the six months ended 30 June 2025.

Corporate and Operational Overview:

• No reportable Health and Safety incidents or environmental issues across both its operations in Italy and Spain.
• The Selva Malvezzi investment continues to provide steady and reliable income from gas production, with a supportive and stable regulatory regime in Italy which encourages activity related to indigenous natural gas production as it emphasises the security of energy supply.
• During this reporting period a further £905k was invested in the Viura asset and £484k was paid for the shares of Tarba Energía S.L. ("Tarba") not already owned taking the Company's ownership of Tarba to 100%.  These additions, made via interest bearing loans to the Company's investment vehicles, were all funded out of the Company's existing cash reserves.
• A further £941k net share of HEYCO Energy Iberia EBITDA, accruing to the Company's investment during the reporting period, has been retained in the joint-venture vehicle and is being applied to the ongoing drilling and workover programme.
• At the end of the reporting period the Company closed an equity placing and subscription offer raising gross proceeds of approximately £1.2 million through the issue of 26,170,193 new Ordinary Shares at 4.5p per share.
• In April 2025, the Company appointed Hannam & Partners as Joint Corporate Broker to the Company.

Post period

• Total net proceeds of £1.12m were received from the above equity raise, of which £283k was received by 30 June.
• At the date of this report, a further direct investment of €1.3m has been made in the Viura asset.
• New Gas Sales Agreement signed with Hera Trading to supply gas from the Selva Malvezzi production concession replacing the current Gas Sales Agreement with BP Gas Marketing which expires on 1 October 2025.

Financial Overview

• The Company reports a £180,101 (H1 2024: £275,120) loss after taxation from continuing operations for the six-months ended 30 June 2025, a 34% reduction on last year.
• The reported loss includes a £32,715 unrealised loss (H1 2024: £nil) of financial assets at fair value.  Forward gas prices and exchange rates at 30 June 2025 were taken into consideration as well as gas produced from the assets in calculating the reported loss.
• The Company's Net Asset value (Shareholder Equity) increased by £938,246 in the six-months ended 30 June 2025 - From £24,590,154 at 31 December 2024 to £25,528,400 at the reporting date.
• The Company remains free of any interest bearing or secured debt.
• At 30 June 2025, the Company held cash and cash equivalents of £147,134 (Year-end 2024: £1,185,386).  Cash and cash equivalents held in Euros in the Company's wholly owned non-consolidated investment companies amounted to €1,009,095 (Year-end 2024: €338,628).
• Of the £1,834,203 increase in trade and other receivables, £967,263 comprises increased loans to the Company's investment companies and interest accrued, net of debt repayments to the Company on investment loans made during the exploration and development phases of its projects.
• The Company and its investment vehicles are expected to have sufficient funds to continue in operation and meet future operating and known capital costs.

Mark Routh, CEO of Prospex, said:

'2024 was a transformative year for Prospex.  With the Viura investment, we added a third producing onshore European gas field to our portfolio, lifting production across our portfolio by 230%.  The purchase in 2025 of the remaining interests in Tarba further strengthened our position, consolidating our ownership of El Romeral and adding the suspended Tesorillo asset, together contributing over 750 Bcf (21.3 Bcm) of best-case prospective gas resources to our portfolio, at very low cost.

While short-term production interruptions at Viura and El Romeral are frustrating, both assets are now positioned to deliver stronger performances, with permits in place to drill new wells on Viura and advancing on El Romeral.  Meanwhile, Selva Malvezzi continues to deliver steady income and commands premium pricing under our new gas sales agreement with Hera Trading.

We remain confident that our growing portfolio of producing assets offers significant upside potential and we look forward to converting our contingent and prospective resources into proven producing reserves that will drive long-term value for shareholders.'

Operational Highlights

Viura

• Total natural gas produced from the Viura-1B well from start-up in December 2024 to the end of Q1-2025 was 30.2 MMscm = 1.1 Bcf (which is ≈ 4.4 MMscm = 154 MMscf net to Prospex).
• In April 2025, the operator of the Viura field, HEYCO Energia Iberia S.L. ("HEI") advised Prospex of the temporary cessation of production of the new Viura-1B well due to a leak in the completion tubing.  HEI had to mobilise a suitable drilling rig to perform the workover to reinstate production from the field.  The temporary halt to production had an impact on the stated schedule for drilling the development wells, for which permits are already approved, which are now anticipated to be drilled in 2026.

Post period end:

• At the end of July 2025 HEI advised Prospex that it had successfully repaired the leak in the production tubing of the Viura-1B well identified in April 2025.  However, during the newly run completion of the wellbore, HEI identified an unexpected blockage of residual drilling mud possibly requiring the mobilisation of a coil-tubing unit to clear the obstruction to allow the sliding sleeve to be actuated in order to allow gas production to resume.
• In August 2025, HEI confirmed that the drilling mud blockages were resolved using wire line methods thus a coil tubing unit was not required, resulting in significant cost savings.
• In addition, a short flow test carried out at the well confirmed that the well is operating successfully after the workover, demonstrating strong deliverability from both the well and the Viura reservoir.  During the short flow test the following rates were achieved:
  • 100,000 scm/d (3.5 MMscfd) at a 10% choke setting.
  • 200,000 scm/d (7.1 MMscfd) at a 25% choke setting.

Both flow tests produced dry gas with no water from the topmost section of the main Utrillas A reservoir, fulfilling one of the main objectives of the workover intervention.

• Although HEI successfully replaced the tubing in the Viura-1B well in July 2025, it advised of a delay to the reinstatement of production from the Viura-1B well due to technical and equipment issues, both sourcing and implementation, which are delaying the resumption of production and which they are working urgently to address.
• The Company is waiting for further information from HEI, including the likely timing of the resumption of production, which is currently unknown.

Selva Malvezzi

• At the time of reporting, the Podere Maiar-1d well has delivered ≈54.4 million standard cubic metres of gas from the C2 level in the well to date since first gas on 4 July 2023.
• In the first half of 2025, gas production and revenues from PM-1 gas facility in the Selva Malvezzi Production Concession were as follows:
  • Average gross daily production rate of 77,264 scm/d.
  • Production net to Prospex at 37% was 5,174,339 scm at a weighted average price of €0.45 per scm.
  • Prospex 37% share of gross revenue was € 2,295,159.
• In second quarter of 2025, the operator of the Selva Malvezzi Production Concession Po Valley Operations Pty Limited ("PVO"), a wholly owned subsidiary of Po Valley Energy Limited (ASX: PVE) confirmed that it is on target to start field activities at the Selva Malvezzi Production Concession in October 2025 starting with the 3D seismic acquisition project.
• In early April 2025, PVO received INTESA from the Region and the final authorisation by the MASE for the 3D geophysical survey acquisition on the Selva Malvezzi Production Concession.  Field activities, including the 3D seismic acquisition, are scheduled for early October 2025 in accordance with guidance from landowners and relevant Farmer's Associations, ensuring no impact on their late summer harvest.  Permitting process and landowner agreements continued to advance.
• During May 2025, the EIA technical commission of the Ministry ("MASE") requested further studies specifically covering assessment of flood risk in the area given flooding events that occurred in the region in 2023 and 2024.  In addition, the Budrio Municipality requested a relocation of the Casale Guida (North Selva) and Ronchi (South Selva) well site due to community concerns regarding visual and noise impacts on the surrounding area.  The Selva Malvezzi-1 (East Selva) well site location will also be evaluated further to mitigate flooding risk concerns raised by the Civil Protection of Emilia Romagna Region.  PVO is preparing an updated EIA for resubmission which aligns with the Ministry's observations and recommendations outlined.  The re-location of the surface locations of the two well pads does not impact the 3D seismic programme.

Post period end:

• In July 2025, PVO confirmed the advancement of permitting revisions is underway to address further studies and recommendations from the technical commission of Ministry (MASE) Budrio Municipality, Civil Protection and Emilia Romagna region for the Broader Selva Development Program focussing on Casale Guida-1d (Selva North), Ronchi-1d (Selva South), Bagnarola-1d (Riccardina), Selva Malvezzi-1d (East Selva) wells. 
• In August 2025, the Company through the Selva Malvezzi Joint Venture signed a new Gas Sales Agreement with Hera Trading to supply gas from the Podere Maiar-1d well facility in the Selva Malvezzi production concession replacing the current Gas Sales Agreement with BP Gas Marketing which expires on 1 October 2025.  The 12-month contract commences on 1 October 2025 to supply approximately 27.963 million standard cubic metres of gas, with the option to extend.  The gas supply price will be linked to the Italian Gas Index (IG INDEX GME).

El Romeral

• In the first half of 2025, the El Romeral power plant generated 3,752 MWh of electricity and achieved sales income of €365,152.
• In February 2025, following the initiation of the Statutory Consultation of the Environmental Impact Assessment ("EIA") for the application to drill five new natural gas wells on the El Romeral concessions, the EIA consultation was publicly gazetted on the State Official Bulletin.  The purpose of the public gazetting is to engage with all citizens, stakeholders, including up to 29 statutory consultees and local regulators, institutions or associations to address questions and concerns on any environmental impact of the project.  The local governmental authority alongside the Department of Industry and Energy of the sub-delegation of the Government in Seville are responsible for the next stage of the application process.
• The application to drill five new natural gas wells on the production concessions owned by Tarba known as El Romeral 1, 2 & 3 was submitted to the central Spanish regulatory authority in Madrid in May 2024 together with the full scientific analysis and assessment of any potential effects that the proposed drilling project may have on the environment.
• This statutory consultation period is open for 30 working days, during which time Tarba will respond to questions and requests for further information from interested parties.
• At the end of the gazetting period, the sub-delegation of the Government in Seville will report back to the Ministry in Madrid with its findings and recommendations.  From this point, the Ministry in Madrid targets between 90 to 180 days for the final review and approval, giving time to gather its internal and final EIA evaluation, together with all the mandatory statutory reports from the public administrations and institutions before it can issue an approval resolution granting the permits to drill the five wells.

Post period end:

• At the time of this report not all of the statutory reports had been finalised by the sub-delegation of the Government in Seville, however, there have been no objections made or adverse comments from the statutory consultees or the general public about Tarba's plans to drill the five new wells on the concessions.
• In July 2025, the Company advised that the El Romeral power plant near Carmona in southern Spain ceased producing electricity on 1 July 2025.  A two-week shutdown of production was expected whilst the plant's main transformer was replaced.  Tarba, the operator of the plant has been renting a transformer from a third-party supplier and that company requested that the transformer be swapped out for a more suitably sized unit at a lower rental cost.  There have been delays to the arrival of the new transformer unit due to circumstances beyond the control of either company.  Tarba is entitled to compensation for lost production from the transformer provider at a rate of €3,000 per day plus other operational costs related to alternative power provision.  In August this compensation increased to just under €4,000 per day following the delay on the delivery of the replacement transformer.  Tarba does not have a firm delivery date, the expectation is that replacement will occur during Q3 2025.  Whilst this is not an ideal situation, Tarba is entitled to compensation for lost production.

Other investments - Poland

• In Poland, the Company's Polish Subsidiary applied for licences to own 100% working interest in prospective blocks in areas which meet the Company's objectives of proven gas production, high potential prospectivity in the targeted geological horizons and high potential for new reserves to be unlocked which can be brought onstream within two to three years.  The licence applications in Poland are with the Ministry of Climate and Environment for evaluation.  The next step will be the public gazetting of Prospex's applications and details of the proposed work programmes on the licences.

Business Development

• Prospex remains committed to its stringent investment criteria; namely its strategy of investing in onshore natural gas projects across Europe and to this end, is continuously evaluating new opportunities that have the potential to deliver long-term value for shareholders. 
• ·    Prospex has a very strong technical team which rigorously evaluates opportunities always starting from the premise that the subsurface analysis must demonstrate that the rocks can produce hydrocarbons at commercial rates before the commercial aspects of any deal are considered.

Original announcement link

Source: Prospex Energy