Prospex Oil and Gas has exercised its option to increase its interest in the Tesorillo Project in southern Spain to 15% from 2.5%. The Exercise is in line with the Company's strategy to expose shareholders to onshore and shallow offshore European opportunities with short timelines to production. Tesorillo covers 38,000ha in a proven hydrocarbon region and contains a known gas discovery, which a Competent Person's Report undertaken by Netherland Sewell and Associates ('NSAI') in 2015 estimated could hold gross unrisked Prospective Resources of 830 billion cubic feet of gas (Best Estimate), with upside in excess of 2 Tcf.
As announced in December 2017, Prospex originally secured a 2.5% interest in Tesorillo, along with an option to increase this to up to 49.9% in two stages. Prospex currently holds interests in three onshore European projects. In addition to Tesorillo, it holds a 50% interest in Suceava in Romania where gas production recently commenced following the drilling of a successful well in 2017; and a 17% interest in the Podere Gallina Permit in the Po Valley region of Italy where Prospex, alongside its partners, is advancing the Podere Maiar gas discovery through the permitting process towards first production.
Prospex non-executive Chairman, Bill Smith, said: 'The decision to increase our interest in Tesorillo to 15% for a net consideration of €153,250 was an easy one. With 830 billion cubic feet of gross unrisked Prospective Gas Resources and the presence of an historic gas discovery, Tesorillo is a much larger variant of the fore-deep play which Prospex successfully tested in Romania and in Italy. With this in mind, we look forward to progressing our ongoing work programme in Tesorillo, which is centered on further de-risking the company-making potential resources already identified on the licence, ahead of a future drilling programme.
'Today's Exercise caps an excellent year for the Company, one which included confirmation of a significant commercial gas discovery onshore Italy, the commencement of gas production in Romania and the generation of our first cashflow. Shareholders can expect more of the same in 2019, as we look to advance all our assets, add new projects to our portfolio and expose our shareholders to more value trigger events, such as drilling or first production.'
