WTI (Apr) $87.25 +$3.80, Brent (May) $91.98 +$4.18, Diff -$4.73 +38c
USNG (Apr) $3.21 +19c, UKNG (Apr) 134.50p +15.73p, TTF (Apr) €52.0 +€2.855

Oil price

Oil remains firm today with WTI at just under $95 and Brent $$99.27 as the Straits remain closed but apparently some Chinese tankers are being allowed through. Until the Shermans can stop the drones and missile attacks on sundry ships it ain’t opening anytime soon. 

I mentioned the stock release programme yesterday but although it may be 572m barrels it isn’t really a tin of beans, it can can come out at between two and five million barrels a day against world demand of around a hundred…

Prospex Energy

Prospex has provided a letter to shareholders from the Company’s CEO, Tom Reynolds, which is copied in full below.

The Company is also pleased to announce that Tom Reynolds, together with Bill Smith, Chairman of Prospex, will provide a live Corporate Presentation via Investor Meet Company on 26 March 2026 at 15:00 GMT. The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 25 March 2026 at 09:00 GMT, or at any time during the live presentation. Investors can sign up to Investor Meet Company for free and add to meet PROSPEX ENERGY PLC via: https://www.investormeetcompany.com/prospex-energy-plc/register-investor

Investors who already follow PROSPEX ENERGY PLC on the Investor Meet Company platform will automatically be invited.

Letter to Shareholders

Dear Shareholders,

It has now been a month since I took over as CEO of Prospex Energy, and I would like to start by saying how excited I am for the future of our Company.  Since joining, I have covered a lot of ground travelling to Spain and Italy to meet our team, partners and key stakeholders, gaining valuable insight into our asset portfolio and building a schedule of value adding options for each asset.

Investment Thesis and Process

Prospex is quoted on AIM as an investing company with a focus on energy assets, particularly natural gas and electricity, in Europe.  My investment thesis for Prospex is simple and can be described in three parts:

• Real assets – properties which produce real commodities needed by society and will increase in value during inflationary periods, outperforming other investment classes when buying power is eroded
• Value Accretive – each asset offers clearly defined opportunities to add value through discovery, derisking and/or development. With access to appropriate resources, we can add value for our shareholders.
• Resource sovereignty – as established supply chains for energy delivery to Europe fail or are disrupted, energy resources within Europe will be recognised as strategically more valuable and asset prices will be revalued

Prospex’s purpose is to identify opportunities to deploy shareholder capital, which match the above criteria and manage the resulting investment to deliver the target return. The medium-term objective is to establish a portfolio of cash flowing assets capable of offering distributions and/or funding investment opportunities as they are identified while limiting new share offerings.

Linked to this objective, the Company launched a Convertible Loan Note offering in December 2025 with a raise target of £1.6 million. The purpose of this raise was to fund a series of identified elements of investment capex all of which serve to protect and/or grow existing asset value. At the most recent close the Company had received cumulative subscriptions for £1.346 million. Following my review of the assets over the last month I believe it is in shareholders’ interests to complete that raise and as a result the Company remains open to subscriptions to reach the original target on the same terms. However, for any subscriptions received from 12 March 2026 onwards the conversion right will not be capable of exercise until the first anniversary of subscription[1].

As a result, on our existing assets, my focus is to identify ways to increase value while minimising the need for new equity issues. This will involve introducing industry investors at the asset level via a farm-in arrangement or financial investors alongside Prospex as a co-investor in the companies and underlying assets we hold an interest in. Going forward, every investment we consider will be guided by a rigorous assessment of incremental value added per Prospex share.

AIM Investing Company

Prospex is one of the few UK publicly traded investing companies offering direct exposure to onshore European gas markets; we are a unique investment proposition. Investing companies invest in assets, financial instruments and other companies relying on distributions and/or exits to deliver returns. This provides Prospex with very broad flexibility in terms of investment structures, who it can partner with and the targets it invests in which is a significant advantage compared to other companies.

Macro

Since the onset of the Ukraine conflict, supply of natural gas to Europe has pivoted from Russian pipeline gas to Liquefied Natural Gas (LNG) import. The recent closure of the Qatari LNG export terminal demonstrates the fragility created by this dependency with TTF prices rising c. 75%. The need for secure domestic energy in Europe is clear, and in my opinion deliverable energy resources within Europe will increase in value. In addition, domestic production of natural gas is much less carbon intensive than the life cycle emissions of LNG.

In the short term, higher prices means that Prospex gas production at Selva Malvezzi in Northern Italy and the Viura Gas Field in Northern Spain will generate higher levels of cash flow. In the medium term, the potential value from discovery, de-risking and development options across the entire portfolio also increases as a result.

Producing Assets

Shareholders now own three producing, revenue generating investments – Selva Malvezzi in Northern Italy, the Viura Gas Field in Northern Spain and El Romeral in Southern Spain. Whilst there have been some operational issues over the past year, I expect to be in a position to set out a definitive step plan for each asset at the upcoming IMC.  I have included a high level summary of the status for each producing project below:

• At Viura, our partner and operator HEYCO Energy Iberia, is executing a series of production trials under a range of parameters with the objective of populating a dynamic reservoir model which will inform key decisions underpinning future drilling decisions.
• As Selva Malvezzi, I met our partner Po Valley Energy, which plans to execute a value adding programme of work with the objective of characterising the exploration upside on the licence and producing an updated Competent Persons Report in H2 2026 while we apply for the approvals required to drill a series of exploration wells.
• At El Romeral, we are waiting for permits to drill a five well programme. Production was able to resume in early February following the installation of a rental transformer and we have been running production trials to optimise generation activity with the objective of maximising revenue. Regarding the five well programme, we have received early expressions of interest from prospective farm-in investors and look forward to updating shareholders at the appropriate time if these discussions develop into actionable proposals.

Exploration Assets

Through our ownership in Tarba Energia, which owns the El Romeral licence, we have an interest in two petroleum exploration licences in Southern Spain, the Tesorillo and Ruedalabola Permits. A well drilled on Tesorillo delivered gas to surface in the 1950s and although considered to have high potential, significant further work will be required to characterise and test the licence potential.  These licences are currently suspended and Prospex has engaged with the relevant governmental departments since 2021 seeking permission to carry out further investigative work. This engagement will continue but there is no guarantee that regulators will allow activity to re-commence.

Offering a more direct path to near term exploration activity, licence applications are progressing for two areas onshore in southern Poland – San and Dunajec. These applications represent a new country entry, adding a third European jurisdiction to our portfolio. Poland benefits from a highly prospective petroleum system, very supportive regulatory framework and active network of service providers allowing rapid progress to be made on any licences awarded.

Strong Growth Trajectory

Having conducted a thorough assessment of our portfolio since joining I firmly believe that we are ideally positioned for growth at a period of surging market demand. Our gas reserves are significant, especially given the size of our company, we have a stable production base, and are actively growing, with a well-defined and robust pipeline that includes several new wells and European expansion.

I feel privileged to have the opportunity to steer Prospex through the next period of its development. We are entering a new phase of exciting activity, and I am committed to pursuing our growth objectives with a focus on per share value. I give my sincere thanks for all the support shown so far and I look forward to speaking more fully at the upcoming investor call on Thursday 26 March 2026 at 15:00 GMT.

In moving forward, keeping our shareholders informed will be critical to our success and this is my commitment to you; Prospex will aim to host four events per year – approximately one per quarter – where management will update shareholders on our plans and developments. I hope that two events will allow us to meet in person, including the Annual General Meeting.

Kind regards,

Tom Reynolds, CEO

With Tom Reynolds at the helm Prospex shareholders won’t be short of updates and here, after just a month he has addressed all the key issues head-on. Most importantly, in a conversation with me this morning he is delighted with what he sees as a great portfolio of assets which gives him an enviable position. 

There is an outstanding convertible yet to quite complete, investors should take advantage of that and as Tom has a refreshing view about equity issuance dilution is unlikely to be on the cards in the absence of a no-brainer that would require it. I mean, issuing shares is not always bad and can add value but Tom has a fine history in all forms of investing. 

Absent that, he makes it clear that value is better created by maybe a modest farm-out at asset level or even a financial backer coming in as a co-investor to ensure financial discipline. I suspect that maybe a family office or even a high net worth investor could see what should be plenty of long term upside at Prospex. 

On the asset level Viura is where Tom will be next week it is all about a series of production trials which will feed into a future drilling programme  and as he says, ‘with the objective of populating a dynamic reservoir model which will inform key decisions underpinning future drilling decisions’.

For Selva there is a clear work programme from Po Valley with the objective of ‘characterising the exploration upside on the licence and producing an updated Competent Persons Report in H2 2026 while we apply for the approvals required to drill a series of exploration wells’.

And at Romeral they are also waiting for permitting for the five well programme which has seen ‘early expressions of interest from prospective farm-in investors’ which suits Tom Reynolds style and approach. A deal with a solid carry might value Romeral quite highly which would give a look through equivalent  to a large chunk of the current market cap and please investors. 

Production resumed last month, remembering there have been some operational difficulties to do with the generator which had to be rented after the purchase fiasco. Finally the company are up for two onshore licences in Poland, each with 100% so all-in, a third country spreads the risk and the country offers a ‘highly prospective petroleum system’ and adds a pivot with more potential growth.

Readers know that I have been much more positive on Prospex for over a year now and under new management offers what I call a difference and importantly a good difference. With a rigorous investment approach and again as I have said plenty of times, in countries where Government policies are favourable to domestic hydrocarbon production, even more so now. 

Internationally gas prices are high, not just because of the war but it does exacerbate the high value of local supplies without delivery problems, Prospex looks in a very strong position and I would back Tom to bring the company through. 

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog