Prospex Energy (PXEN ) said it is committed to achieving first gas from the Selva field development project in Italy “as soon as possible” as it awaits production concessions.
The investment firm, which is focused on developing European gas and power projects, currently holds a 17% working interest in the Podere Gallina licence through its wholly-owned subsidiary PXOG Marshall, with the Selva Malvezzi concession contained in this licence.
Prospex unveiled the acquisition of a further 20% of the Podere Gallina licence from United Oil and Gas and UOG Holdings (a wholly-owned subsidiary of UOG) in August 2021, by way of a transaction of 100% of UOG Italy which has a 20% interest in the Podere Gallina licence.
Under the terms of the agreement with UOG, the long-stop date by which the transaction should complete has been extended by mutual consent from 7 March 2022 to 6 April 2022.
Earlier this month, Po Valley Energy, the operator of the licence, advised the joint venture partners that the agreement (which is known as INTESA) for the Selva Malvezzi concession has been sent by the Ministry for Ecological Transition to the Emilia Romagna Region.
This is the pre-award for the intergovernmental agreement and is the penultimate step for the approval of the production concession which Po Valley is expecting at the end of March 2022.
Once the production concession is awarded the field development project activity can commence, the company explained to investors. The target for the first gas is 1Q23.
After the production concession is granted, before any gas may be extracted from the Selva field, there is a regulatory requirement to establish a 12-month baseline of local seismicity to ensure that any gas extraction from the area does not lead to increased local seismic activity.
Prospex explained that Po Valley has completed the drilling of three shallow monitoring boreholes, one at 141 metres and two shallower boreholes at 10 metres. By the end of this week, the second 140 metre borehole will be completed and equipped with piezometers.
The group said this work has been started and funded 100% by Po Valley earlier than the required 12 months and in advance of the award of the Production Concession at which time it becomes a firm commitment which all Joint Venture Partners have agreed to fund.
As a result, the Joint Venture partners - PXOG and UOG - have now agreed to fund their share of this work and all development costs when the Production Concession is awarded.
Chief Executive of Prospex Mark Routh, said: “We are working with Po Valley to achieve first gas from Selva as soon as possible, but with no guarantee on the timing of the Production Concession award, any funding of development activity prior to award is premature.”
Despite this, Routh added that recent events were “positive” and that Prospex Energy is now witnessing the final steps towards the granting of the production concession, adding that the Selva field development project is expected to be “a transformational asset” for the company.
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