Prospex Energy (), a prominent player in the European gas and power sector, has released its interim results for the six months ending June 30, 2024. The company has made notable strides in financial management, having successfully repaid all interest-bearing debt along with accrued interest, without raising any additional debt financing during this period. This strategic move has resulted in a significant reduction in loss after tax, which narrowed to £275,000 from £888,000 in the previous year. Notably, this figure includes no unrealised profit or loss from the revaluation of PXEN’s financial assets at fair value, a stark contrast to the unrealised loss of £489,000 reported in H1 2023.
The valuation conducted as of June 30, 2024, indicated no change in the net book value of PXEN’s investments, reflecting the current forward gas prices and exchange rates. By the end of the reporting period, the company had a modest cash balance of £11,000, while its net share of cash equivalents held in euros across non-consolidated investments and joint ventures stood at €795,000.
Recent Developments
In a significant post-period development, PXEN acquired a 7.23% interest in the Viura gas field located in northern Spain, marking its third onshore asset in Europe. This acquisition was facilitated by a £4.2 million raise at 6p per share, enabling the company to secure a 7.5% stake in Heyco Energy Iberia, which holds a majority interest in the Viura field. To achieve this stake, Prospex is committed to funding 15% of the development costs at Viura, in exchange for a 10% coupon and 15% of production income until its capital investment is recouped.
The year-to-date has been eventful for Prospex, as the gas producer not only settled all its debts but also expanded its portfolio with the Viura gas field acquisition. The company is already operational in Spain through its El Romeral gas facility, which recently received a license extension until 2034. At Viura, drilling of the development well Viura 1B is currently underway, with plans for two additional wells slated for 2025 and 2026. The Viura field boasts substantial remaining 2P reserves of 90 Bcf (approximately 2.5 Bcm), which is expected to significantly enhance PXEN’s booked gas reserves, production capabilities, and cash flow in the near future.
With the addition of Viura, Prospex solidifies its position as a leading gas producer in Spain, complementing its existing 49.9% interest in the El Romeral field. Currently, five new wells within the El Romeral concessions are progressing through the permitting process, aimed at ramping up production at the gas-to-power plant, which is currently operating at only 33% of its capacity.
Meanwhile, at the Selva Malvezzi concession in northern Italy, where PXEN has also been active, four additional wells are being developed following the acquisition of a 3D seismic survey. As production levels increased at Selva in early FY24, revenues surged in the first half of the year, reaching €2.6 million net to PXEN by May 24, 2024, compared to a total of €1.3 million generated in FY23. Furthermore, PXEN has successfully extended its gas supply contract with BP Gas Marketing for another 12 months.
Additionally, the recent annulment of Italy’s ‘Plan of Areas,’ which had previously restricted hydrocarbon exploration and production, presents further opportunities for growth at Selva and other future assets within the country. Given the active development across its three European onshore gas investments, Prospex is well-positioned to convert contingent and prospective resources into developed producing reserves, reinforcing its cash-generative status with no debt and a clear path for future growth.
