Prospex Energy, the AIM quoted investing company focused on European gas and power projects, has signed a binding agreement to become the sole shareholder of Tarba Energía by purchasing the entire shareholding that Warrego Energy holds in Tarba. Tarba is the company through which Prospex holds its investment in the El Romeral production concessions and associated El Romeral gas-to-power plant situated near Carmona in southern Spain and in the Tesorillo and Ruedalabola exploration permits (currently suspended) in the Cadiz province in southern Spain.
Highlights
- On completion, Prospex will own a 100% indirect working interest in both the El Romeral asset and the Tesorillo and Ruedalabola exploration permits
- Total consideration of €652,725
- Acquisition is being funded entirely by the Company's capital resources
- Competitive acquisition price equating to US$0.016/mcf or US$0.092/Boe
- Potential to significantly increase production and revenues on the El Romeral concession once the permits to drill the five new wells are approved
- This transaction demonstrates further momentum in building the Company's investment strategy in European gas and production
Mark Routh, Prospex's CEO, commented:
'I am extremely pleased to announce the increased ownership in Tarba, the El Romeral concessions and the related gas-to-power plant in Carmona. Importantly the acquisition is being made using accumulated cash reserves from our investment portfolio and is expected to lead to significantly increased production revenue once the permits to drill the five new wells on the EL Romeral concessions are approved.
'In terms of prospective gas resources acquired in the El Romeral asset alone, the equivalent price of US$0.092/Boe is an excellent price by almost any measure. Prospex sees further upside in the concessions with further mapped structures to evaluate and drill once the first five wells have been permitted and drilled."
Further information
Under the terms of the Tarba shareholders agreement with Warrego (the "SHA"), Prospex, through its wholly owned subsidiary PXOG Muirhill Limited ("Muirhill") has exercised its pre-emption right to buy all of the Warrego Shares following the execution of a Share Sale and Purchase Agreement (the "SPA") between Warrego and a Third-Party buyer which triggered a right for Muirhill to acquire the Warrego Shares. Pursuant to the SHA, Muirhill had 30 days in which to give notice to match the price offered for the Warrego Shares, which it elected to do on 19 March 2025 and it has a further 30 days in which to complete the transaction. Completion therefore will occur on or before 19 April 2025.
The price to be paid for the Warrego Shares is a total of €652,725, €100,000 of which becomes payable when the permits to drill three of the five wells currently going through the regulatory permitting application process are approved. Prospex is funding this acquisition entirely from its existing cash resources.
In addition to the cash purchase price, the SPA requires the buyer to pay Warrego a 5% gross overriding royalty on the gross revenues from any future Tesorillo Project development (the "Tesorillo Project Royalty"). There is no monetary cap or maximum amount payable in respect of the Tesorillo Project Royalty.
The price offered to Warrego by the Third-Party buyer is required under the SHA to be matched exactly and therefore the purchase price can be considered as an independently derived value for the increased interests in the assets.
With respect to prospective resources acquired as part of this transaction, the CPR[1] assigns gross un-risked mid-case prospective resources in the three El Romeral concessions of 90 bcf across 11 low-risk prospects that have been mapped on the concessions. For the total acquisition price of €652,725 for 50.1% of the 90 bcf of prospective resources, this translates to an acquisition price of US$0.016/mcf or US$0.092/Boe.
As referenced in the RNS published on 25 February 2025, the El Romeral asset currently represents 10% of the net production of the Company, with a 55% contribution coming from the Viura asset in Northern Spain and 35% of the Company's net production coming from the Selva Malvezzi asset in northern Italy. Following completion of this transaction, the El Romeral asset will represent approximately 20% of the Company's enlarged net production.
Schedule Four disclosure
As of 31 December 2024, Tarba reported unaudited total assets of €2.9 million and for the year ended 31 December 2024, an unaudited loss after tax of €0.57 million. Given that Prospex is classified as an investment entity under applicable accounting standards (IFRS10), consolidation of Tarba's results going forward will not be required.
?Viura Project Drilling Schedule Update
Further to the operational update RNS of 25 February 2025, the schedule for the commencement of drilling operations at the Viura gas field in northern Spain, operated by HEYCO Energy, has been pushed back by 6 to 8 weeks. For operational reasons, the operator has advised that the drilling operations on the Viura project are now expected to commence in May 2025.
Source: Prospex Energy
