TIDMPXEN
RNS Number : 5781T
Prospex Energy PLC
25 July 2022
Prospex Energy PLC / Index: AIM / Epic: PXEN / Sector: Oil and
Gas
25 July 2022
Prospex Energy PLC
('Prospex' or the 'Company')
Successful Fund Raise of GBP1.87 million
Proceeds to fund portion of costs to first gas production at the
Selva Field
Prospex Energy PLC (AIM: PXEN), the AIM-quoted investment
company focused on European gas and power projects, is pleased to
announce that it has raised GBP1.87 million via the issue of
unsecured Convertible Loan Notes ('the Loan Notes') to existing and
new investors ('the Subscribers'), including all of the directors
of the Company.
Highlights
-- GBP1.87 million raised via the issue of unsecured Convertible
Loan Notes of denomination GBP1 due end of March 2024
-- Net proceeds to provide funds towards the Company's share of
development costs (totalling c. GBP2.3 million, which includes
GBP200,000 of contingency) at the Selva gas discovery on the Podere
Gallina Permit, in the Po Valley in Italy as well as working
capital
-- The Loan Notes are convertible at 4.25p per ordinary share at
any time at the election of the investor. Existing share
authorities are sufficient to satisfy any potential conversion of
the maximum approved amount of GBP2.3 million plus any accrued
interest
-- Interest at 12% is payable quarterly compounded monthly, with
the first interest payment on 30 September 2022 to be capitalised
and added to the loan principal rather than paid in cash
-- Loan principal to be paid in three tranches (end of September
2023, end December 2023 and end March 2024)
-- This debt/equity hybrid financing allows the Company to fund
the initial costs of the development at the Selva field, with the
objective of achieving first gas from the field by Q2 2023, subject
to further funding being secured for cash calls expected in March
2023 by way of commercial debt, or other financing available at the
time
Mark Routh, Prospex's CEO, commented:
"We are extremely pleased to have raised financing at this
challenging time in the markets. The proceeds of the Loan Notes
will be used to fund the Company's 37% share of the development
costs at the Selva gas discovery on the Podere Gallina Permit in
Italy and general corporate purposes. We are experiencing
significant increases in budgeted costs related to our planned
development activity due to many factors including global supply
chain complexity, increased costs of energy, materials and staffing
all of which put pressure on schedule and costs. The Operator of
the Podere Gallina licence in Italy, Po Valley Energy (ASX:PVE) has
secured as much as feasible in a tightening market to ensure that
the schedule to first gas is not delayed.
"Currently we remain on schedule for first gas from the Selva
field in Q2 2023 (subject to the balance of the funding being
available), where we predict substantial revenues to be generated
from the gas production. The Board examined a number of options to
finance our 37% stake of Selva and given the challenging market
conditions, this was the best alternative at this time. I would
like to take the opportunity to thank our existing shareholders for
their continued support and welcome our new Subscribers."
Further Information on the Subscribers and the Loan Note
The Loan Notes pay 12% interest quarterly, compounded monthly,
with the first quarterly interest payment on 30 September 2022
capitalised and added to the loan principal. Quarterly cash
interest payments will be made thereafter with the first payment on
31 December 2022. Unless converted, the principal is to be repaid
in three equal capital repayments scheduled on 30 September 2023,
31 December 2023, and 31 March 2024 which fits conservatively
within the expected first production from Selva in Q2 2023.
The Company can elect to pay the interest in Euros by giving 10
business days' notice. The Company can elect, on a change of
control of the Company, where a single party has over 50% of the
issued share capital of the Company, to convert some or all of the
issued Loan Notes, including capitalised interest, into ordinary
shares at the lower of the 4.25p conversion price or the prevailing
market price. Accrued but unpaid interest may be paid in cash at
the time of conversion or added to the loan principal and converted
at the election of the Noteholder.
The Company can elect to repay the Loan notes in full or part at
any time by giving the noteholders 30 days' notice.
GBP1.87 million Loan Notes have been issued to 27 individual
subscribers, including all four current Directors and one former
director of the Company:
Director Amount
Bill Smith GBP50,000
Richard Mays GBP36,000 via Sallork Limited (Directors R Mays
& E Mays)
Richard Mays GBP50,000 via the SIPP of R and E Mays
Alasdair Buchanan GBP50,000
Mark Routh GBP50,000
James Smith (and partner) GBP70,000
Related Party Transaction
The participation in the Loan Notes by the Directors, and a
former director of the Company within the last 12 months,
constitutes a related party transaction under the AIM Rules. Due to
the participation by all of the directors in the Loan Notes, there
is not a director, or directors, independent of the issue of the
Loan Notes to provide the necessary AIM Rule 13 related party
transaction opinion. Accordingly, Strand Hanson Limited, the
Company's Nominated Adviser, confirms it is satisfied that the
terms of the participation by the Directors, and a former director
of the Company within the last 12 months, in the Loan Notes is fair
and reasonable insofar as the Company's shareholders are
concerned.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR") and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
* *S * *
For further information visit www.prospex.energy or contact the
following:
Mark Routh Prospex Energy PLC Tel: +44 (0) 20
7236 1177
Ritchie Balmer Strand Hanson Limited Tel: +44 (0) 20
Rory Murphy 7409 3494
Andrew Monk (Corporate Broking) VSA Capital Limited Tel: +44 (0) 20
Andrew Raca/Alex Cabral (Corporate 3005 5000
Finance)
Colin Rowbury Novum Securities Tel: +44 (0) 20
Jon Belliss Limited 7399 9427
Susie Geliher St Brides Partners Tel: +44 (0) 20
Ana Ribeiro Limited 7236 1177
Notes
Prospex Energy PLC is an AIM quoted investment company focussed
on high impact onshore and shallow offshore European opportunities
with short timelines to production. The Company's strategy is to
acquire undervalued projects with multiple, tangible value trigger
points that can be realised within 12 months of acquisition and
then applying low-cost re-evaluation techniques to identify and
de-risk prospects. The Company will rapidly scale up gas production
in the short term to generate internal revenues that can then be
deployed to develop the asset base and increase production
further.
About El Romeral and Tarba
The El Romeral gas and power project in Spain, with gas
production wells supplying gas to an 8.1MW power plant near Carmona
in Southern Spain is owned and operated by Tarba. It is currently
operating at about 30% of its full capacity whilst Tarba waits on
permits to drill further infill wells on the concessions to
increase production. Prospex owns a 49.9% working interest in the
El Romeral project via Tarba. The remaining 50.1% working interest
is owned by Warrego Energy Limited (ASX:WGO). Tarba sells
electricity generated from the plant on the spot market in Spain.
The El Romeral licences comprise three contiguous production
concessions.
About Selva:
The Podere Gallina Licence is in the Po Valley region of Italy.
The licence contains the currently shut--in Selva gas-field as well
as exciting exploration opportunities. The Podere Maiar-1 well was
completed in December 2017 and successfully found a commercial gas
accumulation up-dip of the previous wells on the Selva field. The
Company now has a 37% working interest in the Podere Gallina
licence.
The Podere Gallina Licence holds independently verified 2P gross
reserves of 13.4 Bcf (5.0 Bcf net to Prospex at 37% WI), gross
Contingent 2C Resources of 14.1 Bcf (5.2 Bcf net) and a further
91.5 Bcf of gross Best Estimate Prospective Resources (33.9 Bcf
net).([1])
An independent Competent Person's Report of the Podere Gallina
Licence was prepared by CGG Services (UK) Limited in January 2019
on behalf of the joint venture.([1]) It attributed a total of 379
MMscm (13.4 Bcf) gross 2P reserves for the Selva redevelopment
project.
The CPR also attributed Best Estimate gross prospective
(un-risked) gas resources of 1,493 MMscm (52.7 Bcf) on the Podere
Gallina Licence in three separate structures.
References:
[1] Source : "Competent Person's Report Podere Gallina Licence,
Italy" prepared by CGG Services (UK) Limited in January 2019
https://bit.ly/3nZNfYf ].
Glossary:
scm Standard cubic metres
MMscm Million standard cubic metres
Bcf Billion standard cubic feet
MMscfd million standard cubic feet per day
Qualified Person Signoff
In accordance with the AIM notice for Mining and Oil and Gas
Companies, the Company discloses that Mark Routh, the CEO and a
director of Prospex Energy plc has reviewed the technical
information contained herein. Mark Routh has an MSc in Petroleum
Engineering and has been a member of the Society of Petroleum
Engineers since 1985. He has over 40 years operating experience in
the upstream oil and gas industry. Mark Routh consents to the
inclusion of the information in the form and context in which it
appears.
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END
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