Market Update: 5 July 2023
Prospex Energy PLC (AIM:PXEN) & Po Valley Energy Ltd (ASX:PVE) - Selva first gas
Block Energy PLC (AIM:BLOE) - 2Q production uplift
Energy News
Brent Oil US$75.9/bbl vs US$75.5/bbl yesterday
WTI Oil US$70.9/bbl vs US$70.6/bbl yesterday
UK NBP Futures 87p/therm vs 83p/therm yesterday
TTF Dutch Futures €35/MWh vs €34/MWh yesterday
- Henry Hub Gas US$2.77/mmBtu vs US$2.69/mmBtu yesterday
- Energy prices were broadly unchanged in thin markets following the Independence Day holiday in the US.
Company News
Prospex Energy PLC (AIM:PXEN) 8.25p, £24m: Selva first gas
- Prospex and Po Valley Energy Ltd (ASX:PVE) announced the start of gas production from the Podere Maiar-1 facility (PM-1) at the Selva field (37% WI), onshore Italy.
- The partners will provide gas directly to the domestic Italian market under an 18M supply agreement with BP Gas Marketing announced in 1Q23.
- Prospex estimates that the net monthly revenue from the Company’s 37% working interest in Selva at current TTF gas prices will exceed £300,000 net of tax and royalties.
- The Company commented that the production parameters would now be monitored in order to determine the optimal flow rate and ensure sustainable production levels from the Podere Maiar-1 well.
Prospex has put the regional flooding issues behind it, which delayed final approvals and production by 6M, and has achieved a significant milestone on the start-up of Selva gas production. This will place the Company in a strong operational position to scale up its onshore European gas production and photovoltaic projects in the near term to generate internal revenues that can be deployed to develop the asset base and increase production further. In addition, while a potential sale of the co-venturer’s stake in the onshore Spain El Romeral gas and power project (49% WI) may provoke a period of uncertainty for investors, this would also ultimately offer an independent valuation of the assets. The share price has fallen back from its recent highs as the Company’s projects have been impacted by lower prices and permitting delays, but investors can still look forward to organic growth from several planned wells proceeding through the permitting process, as well as the potential for M&A activity to add new onshore gas assets in NW Europe.
Block Energy PLC (AIM:BLOE) 1.25p, Market Cap £8.6m: 2Q production uplift
- Block announced average 2Q23 production up 66% q/q to 664boe/d (80% oil) generating ~$2.8m revenues from the West Rustavi/Krtsanisi Field (100% WI), onshore Georgia.
- The success of the JKT-01Z and WR-B01Za wells has boosted the Company’s confidence in drilling productive wells into the Middle Eocene reservoir as part of Project I.
- Block plans to advance Project I and drill two further side-tracks and a new well, potentially consisting of multi-lateral technology, targeting production rates some 2-3x those achieved in previous horizontal wells.
- The Company has now fully drawn down the $2m senior loan facility to accelerate the Project I development programme that targets 19.5mboe of internally estimated 2C contingent resources on the Krtsanisi anticline.
Following positive results from the Block’s first two development wells, focus now switches to the upcoming drilling of the KRT-45_ST development well as part of the Project I investment campaign that is funded from quick payback on the new wells and the new senior debt facility. The Company has made significant progress in the last 18M to drive Projects I (Middle Eocene development) and II (Patardzeuli full-field redevelopment) forward, as well as creating exposure to material exploration upside at no cost through the 50% farmout of non-core areas of Licence XIᴮ. We expect Block to continue to pursue a diverse drilling and workover programme aiming to generate steady production and revenue growth and to recycle this capital back into exploiting the resource potential on its portfolio of assets.
Research
David Mirzai – David.Mirzai@spangel.co.uk – 0203 470 0473
Sales
Richard Parlons – Richard.Parlons@spangel.co.uk - 0203 470 0472
Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471
Rob Rees – Rob.Rees@spangel.co.uk - 0203 470 0535
Abigail Wayne – Abigail.Wayne@spangel.co.uk - 0203 470 0534
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Sources of commodity prices
Oil Brent - ICE
Natural Gas - NYMEX
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