Acquisition of 17% interest in Proven Gas Permit in Po Valley, Italy
Placing to raise £1.6 million
Update on Investment in Romania
Prospex Oil and Gas Plc, the AIM quoted investment company, is pleased to announce a farm-in agreement with Po Valley Operations Pty Ltd, a subsidiary of ASX listed, Po Valley Energy (PVE), to acquire a 17% working interest in the Podere Gallina Exploration Permit in the Po Valley region of Italy for a total consideration payable of approximately €1.15 million.
The Company also announces that it has raised £1.6million (approximately €1.8 million gross) via an oversubscribed placing of 372,093,000 ordinary shares of £0.001 each (the New Ordinary Shares) at a price of 0.43 pence per New Ordinary Share (the Placing Price). The net proceeds of the Placing will be used to satisfy the Consideration and for general working capital purposes.
The Permit contains the currently shut-in Selva Gas-Field, which historically produced 83Bcf between 1960 and 1984, as well as multiple exploration opportunities. The Acquisition is in line with the Company's objective to build a portfolio of high impact onshore and shallow offshore European opportunities with short timelines to first, or restarted production.
Podere Gallina Permit: a proven play in a prolific hydrocarbon region
Significant near term development project at Selva
Multiple exploration prospects identified
Following the Acquisition, the interests in the Permit are PVE 63%, United 20% and Prospex 17.
Update on Investment in Romania
Prospex is also pleased to provide an update on its investment in the Exploration Area of the EIV-1 Suceava Concession (the 'Concession' or 'Suceava'), which is located in a proven hydrocarbon basin in North East Romania. Prospex has a 50% interest in Suceava.
Prospex has been informed by the operator, Raffles Energy S.R.L. that the Weatherford 865 rig has not yet been released from drilling operations in the neighbouring block to the west. Once these operations are complete the rig will move and commence operations at Bainet-1. It is anticipated that the rig could be onsite in a couple of weeks, but exact timings remain dependent on the rig being released from its current operations.
Bill Smith, Non-executive Chairman, commented: “Today's farm-in to Podere Gallina will see Prospex participate in the drilling of two wells in Q4 2017: the Maiar-1d well in the Po Valley and the Bainet-1 well on the Suceava concession in Romania. From the outset we set out to expose our shareholders to value triggering events such as drilling, and we are doing just that.
“As demonstrated by today's Placing, we have a shareholder base that is highly supportive of our strategy to build a portfolio of investments in European onshore projects, which are located in proven plays; are close to infrastructure and markets; benefit from considerable historic data either via well logs or seismic analysis; offer a combination of development and exploration opportunities; and are low cost. We do not intend to stop with Podere Gallina and we continue to evaluate a number of additional projects that match our investment criteria. In the meantime, with operations on the Maiar-1d well due to commence before the end of the year, we are looking forward to working closely with the strong technical teams of United Oil and Gas and Po Valley, as we focus on generating significant value for Prospex shareholders in the near term.”
Further details on the Placing and Total Voting Rights
The Placing Price represents a discount of approximately 11 per cent to the mid-market closing price of the Company's Ordinary Shares on 30 October 2017. The New Ordinary Shares will rank pari passu with the existing Ordinary Shares. Application will be made for the New Ordinary Shares to be admitted to trading on AIM (“Admission”) and Admission is expected to occur on 6 November 2017.
Following Admission, the Company will have in issue a total of 1,013,593,136 Ordinary Shares. The Company has no shares in treasury, therefore the figure 1,013,593,136 should be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
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