AIM-listed Prospex Energy, the investment company focused on European gas and power projects, has announced that initial drilling of the Viura-1B development well in northern Spain has delivered better than expected preliminary results, successfully reaching the reservoir and prompting the decision to appraise a deeper section of the well. This deeper appraisal has the potential to significantly increase revenues and create further value at a fraction of the cost compared to drilling a standalone well. The Well is being drilled by HEYCO Energy Iberia ('HEI') and is one of three wells targeted for drilling at the producing Viura gas field, which has estimated gross remaining reserves of 90 Bcf (2.5 Bcm), of which 6.5 Bcf (0.18 Bcm) is net to Prospex as Prospex owns 7.2365% of the Viura field through its 7.5% ownership of HEI.
Overview
- Drilling of the Viura 1B well commenced on 22 June 2024.
- The Well encountered the main Utrillas-A reservoir unit 50 metres high to prognosis and encountered the top reservoir indicating good quality reservoir rock which was also confirmed by the logging while drilling tools.
- There have been significant gas shows throughout the drilling and coring of the main reservoir target.
- The Well will be connected to the existing gas processing facilities on site, thus generating revenues immediately, with production income expected by the end of October or early November.
- Based on these positive results, HEI and its investors have unanimously approved deepening the well to appraise the deeper sections of the reservoir, including the so far undrilled Utrillas-B formation below Utrillas-A.
- An extra 200-300 metres will be drilled to appraise the Utrillas-B formation.
- Prospex is fully participating and has paid its 15% share of the costs to deepen the well as well as, in a success case scenario, to test and complete this exploratory section.
Mark Routh, the CEO of Prospex, commented:
'I am extremely pleased to be announcing the successful results from the Viura-1B development well, which were better than expected and have subsequently prompted the decision to drill deeper into the reservoir providing us with the opportunity to create further value. Prospex's participation in this project was recommended by our technical team and accordingly they deserve credit for this initial success.
'Likewise, the operator deserves a huge degree of praise for delivering an extremely successful well and close to the original budget. The Viura field contains gas at high pressure and high temperature, so this well could have been extremely challenging to deliver with a total depth of 4,100m MD and a maximum deviation of 45 degrees. HEYCO Energy has utilised its significant experience and expertise to deliver a safe and competent development well, which will be connected to the existing gas processing facilities on site, thus generating revenues immediately. Production income is expected by the end of October or early November.
'Deepening the well to appraise the hitherto undrilled Utrillas-B formation unit is a unique opportunity to add significant value at a fraction of the cost of a standalone well. By drilling ahead now the operator delivers for €1 million, or €2.5 million in the success case, an exploration well which would otherwise have cost over €25 million as a standalone well. Given the significant upside potential of this formation, it is too good an opportunity to miss.
'I look forward to updating shareholders with further results from the drilling as we have firm data to share.'
Source: Prospex Energy
