London-listed Prospex Energy (PXEN ) said Po Valley Energy has received the penultimate approval for production at the Podere Maiar gas field located in onshore northern Italy.
Prospex holds a 37% working interest in the Podere Gallina Exploration Permit which lies in the Selva Malvezzi Production Concession. Po Valley, the operator, holds the remaining 63%.
Po Valley was awarded the Selva Malvezzi preliminary gas production concession in 2019 and later received the finalEnvironmental Impact Assessment by the Ministry in March 2021.
The Podere Maiar gas field, located within the Selva concession, is in a defined “suitable area” under the Plan of Areas (PiTESAI). Prospex details that the granting of the INTESA opens the way for the anticipated grant of the Final Production Concession by the Ministry.
This opening would allow Po Valley to proceed with installing a fully automated gas plant at the existing Selva/Podere Maiar 1dir well site and a 1,000m (1km) pipeline to the adjacent National Gas Grid, where the regulator SNAM can connect the pipeline to the grid, it noted.
Po Valley has already commenced negotiating contracts to complete this construction in a timely manner, with first gas anticipated from Podere Maiar during the first half of FY23.
Based on dynamic reservoir studies, the field development is designed to produce at a maximum rate of up to 150,000 cubic metres/day (5.3 million standard cubic feet per day (‘MMscfd’)) from successfully tested C1 and C2 production levels in the Medium- Upper Pliocene sands of the Porto Garibaldi Formation, the Company highlighted to investors.
Commenting on the approval this morning, Mark Routh, Prospex’s CEO, told investors: “This marks an important step in progressing Podere Maiar towards production. This approval from the Emilia Romagna regional council has taken some time to achieve and we are pleased to now be moving towards the Final Production Concession alongside our partners,Po Valley, so that we can stay on track for our goal of first gas from Podere Maiar next year.”
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In recent weeks, Prospex Energy described the year ended 31 December 2021 as a period of “transformation” as it transitioned from being an investing firm with interests in exploration assets to a business including interests in a gas producing and electricity generating asset.
Total assets rose by 56% over the period to £8.984 million, compared to £5.748m reported in 2020 and with the increase dominated by “a revaluation reflecting measured recognition of positive changes in the forward curve of European gas prices as at 31 December 2021.”
The acquisition of El Romeral, which as an asset produces gas to a power station selling electricity into the Spanish grid, was completed by Tarba, the joint venture vehicle in which Prospex, via its wholly owned subsidiary PXOG Muirhill Ltd, holds its Spanish investments.
The El Romeral plant is now running 24 hours a day 7 days a week following optimisation and automation carried out by Tarba at the end of 2021, allowing Prospex to benefit from the unprecedented rise in electricity prices, Mark Routh, Prospex’s CEO informed investors.
Since revenues generated by El Romeral had been at an all-time high as a result of recent electricity prices, the switch to almost continuous operations is expected to boost revenue.
Last month, the price of electricity in Spain was recorded at unprecedented levels at more than six-times what it was back in March 2021 when the El Romeral project was acquired.
Looking ahead, Prospex saud Tarba is set to increase power generation capacity at El Romeral as soon as it secures permits to drill further infill wells on the site’s concessions.
While Prospex has pledged its support for the drive to renewable energy, it also recognises that natural gas will be required to contribute to the energy mix during the transitional period, “and that local indigenous onshore gas is the optimum source to meet this need,” it states.
Prospex believes it is well positioned to grow its business into these market opportunities. Since the beginning of the year, shares in Prospex Energy have jumped by over 30%.
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