Spain/Italy: Prospex Energy provides Q2-2025 Selva activity report and general operational update

AIM-listed Prospex Energy, the AIM quoted investing company focused on European gas and power projects, has provided an update on operations at its three main assets, the Viura gas field in northern Spain, the El Romeral power plant in southern Spain and including an update from the Selva Malvezzi production concession in northern Italy following the publication by Po Valley Energy of its Q2-2025 activity report.

Viura

The Operator of the Viura field, HEYCO Energia Iberia ('HEI'), has advised Prospex that it has successfully repaired the leak in the production tubing of the Viura-1B well, identified in April 2025 (refer to 29 April 2025 announcement).  However, during the newly run completion of the wellbore, HEI identified an unexpected blockage of residual drilling mud.  A coil-tubing unit is needed to clear the obstruction, which is currently preventing the sliding sleeve from being actuated in order to allow gas production to resume.

Although this is a relatively simple process, sourcing an appropriate coil-tubing unit was not possible in Spain, so procurement necessitated mobilisation of a unit from Poland, resulting in a delay of bringing the Viura-1B well back into production.  Resumption of production is expected to follow shortly after the coil tubing unit is successfully deployed which is expected to arrive on site mid-August.

While the Operator awaits the arrival of the coil tubing unit, operations to remove the blockage with wire line methods have been ongoing, but this process is far slower than using the optimum coil tubing equipment.

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).

The Viura acquisition significantly increased Prospex's proven (2P) reserves by 6.5 Bcf (0.18 Bcm) net to Prospex.  Gross 2P remaining reserves at the Viura field is 90 Bcf (2.5 Bcm) and is expected to increase upon further evaluation of the newly drilled horizons.

Prospex owns 7.24% of the Viura field through its ownership of 7.5% of HEI.  Prospex will accrue 14.47% of the production income from the Viura gas field until payback of its capital investment plus the accrued 10% p.a. interest thereon.

Selva Malvezzi

The operator of the Selva Malvezzi production concession in Italy, Po Valley Operations ('PVO'), a wholly owned subsidiary of Po Valley Energy ('PVE'), announced its Q2-2025 activity on 31 July 2025.  In the report PVO confirmed that it is on target to start field activities at the Selva Malvezzi Production Concession in October 2025 and steady production from PM-1 through the quarter.  PVE has a 63% working interest in the Selva Malvezzi production concession, while Prospex has the remaining 37% working interest.

Gas production and revenues from PM-1 gas facility in the Selva Malvezzi Production Concession 

In addition, 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.

Highlights

• Steady gas production from the Podere Maiar-1 well at Selva ("PM 1") for the quarter averaging 79,783 scm/d continuing to meet predicted levels of production.
• Environmental Impact Assessment ("EIA") revisions are 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.
• Field activities are scheduled from October 2025 for the 3D geophysical survey for the broader Selva Development Program and permitting processes and landowner agreements continue to advance.
• Gross quarterly production of 7.260 MMscm of gas (Q1-2025: 6.724 MMscm), with 2.686 MMscm net to Prospex (Q1-2025: 2.488 MMscm).
• Gross revenue for the quarter of €2.864 million (Q1-2025: €3.338 million), with €1.059 million net to Prospex (Q1-2025: €1.235 million)
• PM-1 continues to sell the gas from Selva Malvezzi to BP Gas Marketing.

Casale Guida 1d, Ronchi 1d, Bagnarola 1d, Selva Malvezzi 1d wells

The Selva Malvezzi Production Concession is the key area of focus for PVO with the next stages of development at Casale Guida 1d (Selva North), Ronchi 1d (South Selva), Selva Malvezzi (East Selva) and Bagnarola 1d (Riccardina) prospects.

The drilling programs for the four new drilling projects were submitted to the UNMIG department of the Italian Ministry of Environment and Energy Security (MASE) for drilling authorisation in September 2024.  The Environmental Impact Study (EIA) covering the drilling, development and production phases of the four wells was filed in December 2024.

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.

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 in early April 2025.  Field activities, including the 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 in the quarter.

El Romeral

The El Romeral power plant near Carmona in southern Spain has not been producing since 1 July 2025.  As previously reported, a two-week shutdown of production was expected whilst the plant's main transformer was replaced.  Tarba Energía S.L. ("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 receiving 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.  This compensation has now 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 August.  Whilst this is not an ideal situation, Tarba is receiving compensation for lost production.

Tarba is the company through which Prospex holds its 100% interest in the El Romeral production concessions and the associated El Romeral gas-to-power plant situated near Carmona in southern Spain.

Other investments

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.  In Poland, the Company has applied for licences to own 100% working interest in prospective blocks in areas which have 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.

Mark Routh, Prospex's CEO, commented:

'We are pleased with the consistent production performance achieved at Selva from the PM-1 well during the quarter, which marks an important milestone for the project.  In addition, we're encouraged by the progress made and recent amendments implemented to advance the next stage of development at Selva, aligning with our broader growth strategy.  I appreciate the interruptions at some of our other projects are frustrating.  Circumstances beyond our control have unfortunately collided to impact operations at our investments, but with our operators we have a clear and proactive plans in place to swiftly and effectively manage this and reset us on our production and development path.

'The value of our portfolio remains strong; we still hold strategic interests in producing natural gas assets and have significant volumes of Proven, Contingent and Prospective natural gas resources ready to be unlocked.  I am confident that the ongoing actions of our operators will ensure the recommencement of production at Viura and at El Romeral in the near term and the continuing expansion of Selva.  We are committed to maintaining transparent communications with our shareholders and will continue to share further updates on progress from our respective operators as soon as we are in a position to do so.'

Original announcement link

Source: Prospex Energy