Business
Acquisition of up to 49.9% of gas power project
Acquisition of up to 49.9% of gas power project.
About this update from Prospex Energy Plc
[{"type":"text","content":"\n \nRNS Number : 0672X Prospex Oil and Gas PLC 17 December 2019 \n\nProspex Oil and Gas Plc / Index: AIM / Epic: PXOG / Sector: Oil and Gas\n17 December 2019\nProspex Oil and Gas Plc ('Prospex' or the 'Company')\nConditional Acquisition of up to 49.9% stake in operational gas power project in Spain\n \nProspex Oil and Gas Plc, the AIM quoted investment company, is pleased to announce the conditional acquisition of up to a 49.9% indirect stake in El Romeral, an integrated gas production and power station operation located in the Guadalquivir basin in southern Spain ('El Romeral' or 'Project'). El Romeral is comprised of three production licences (together the \"Area\"), on which three producing wells supply gas, through its own network, to a 100%-owned 8.1 MW power station. In addition, the Area contains two development locations and 11 very-low risk prospects with gross contingent and prospective gas resources of 5Bcf and 90 Bcf, respectively. \n \nBased on current levels of gas production, electricity generation, and revenue per Mwh, the Project generates small amounts of free cash from revenue of c. €800,000 per year. There is the potential to increase the number of generating days at the Project (historically equivalent to five days per week) and in the medium-term increase utilisation of the generation equipment (current 22%) by sourcing new gas supplies from within the Project Area, specifically from its assigned 90 Bcf of very-low risk prospective resources. When gas was not a limiting factor the power station regularly produced c. 60,000 Mwh per annum, which would equate to a revenue of >€4.2 million per annum (based on current revenue per Mwh). \n \nEl Romeral is being acquired by Tarba Energia S.L (\"Tarba\") with funding provided by Tarba's shareholders, Warrego Energy Limited (\"Warrego\") and Prospex. Warrego will fund the initial consideration of €750,000. Prospex has three months to elect an ownership stake in the Project (up to 49.9%) and refund to Warrego the corresponding proportion of the initial consideration. Warrego will indirectly own the balance of the Project. The acquisition of Prospex's stake is conditional on Prospex securing funding for such investment. \n \nEl Romeral: existing gas production, multiple development opportunities, and an opera...