Prospex Energy PLC, the AIM quoted investment company focused on European gas and power projects, provides the following update on its acquisition of a 49.9% interest in El Romeral, an integrated gas production and power station operation in southern Spain ('El Romeral' or 'Project').  Prospex is acquiring its interest in the Project, which includes three producing wells that supply gas, through its own network, to a 100% project-owned 8.1 MW power station, via Tarba Energia ('Tarba').  Prospex owns a 49.9% interest in Tarba B shares with its partner Warrego Energy Limited owning the balance. 

The El Romeral Project has three producing wells; El Ciervo-1, Santa Clara-1 and Sevilla-3, with gross 2P reserves of 0.30 Bcf. The produced gas is supplied to the 100% project-owned 8.1 MW El Romeral power station, where a low maintenance cost contract is in place with General Electric. The power station has 78% spare capacity and provides both immediate revenues and also a low-cost route to commercialisation for future gas discoveries. The El Romeral power station was constructed in 2001 at an approximate cost of €10MM and current production is supplied to the station by a local 100% Project-owned gas pipeline. Yearly revenues from selling gas to the Spanish electricity grid are >€4.2MM, based on long terms average revenues per MWh. The Company intends to increase the utilisation of the power station and future revenues from production.

As announced on 24 December 2020, Tarba informed its shareholders that final regulatory approval in the form of both Ministerial and Regional authorities sign-off has been received for the transfer of El Romeral to Tarba and that the acquisition could proceed to completion. At the time of the announcement, completion was expected on 31 January 2021.  Tarba has now informed its shareholders that, due to slower than anticipated progress made during the period immediately following the festive period, the Acquisition is now expected to complete on 28 February 2021. 

Tarba, which will assume the day-to-day management and control of El Romeral following completion, is utilising the extended time frame to continue its preparatory work so that the operational transfer will go smoothly. 

The medium-term target at El Romeral is to increase on site gas production and, in turn, electricity generation at the Project's power plant towards its nameplate capacity from the current 22% level.  This is expected to be achieved via the drilling of new wells targeting already identified development locations and very-low risk prospects which have been assigned gross contingent and prospective gas resources of 5Bcf and 90Bcf, respectively.  Tarba will also carry out a review of existing wells to evaluate the potential to undertake workovers to enhance recovery rates. Historically, the power station at El Romeral regularly produced c. 60,000 Mwh per annum when gas was not a limiting factor.

KeyFacts Energy: Prospex Oil and Gas Spain country profile