Prospex Energy Announces Update on Production from El Romeral Power Project

Prospex Energy PLC is pleased to provide an update on the production strategy from its El Romeral power project near Carmona in Southern Spain in which the Company holds a 49.9% working interest through Tarba Energía S.L. ("Tarba").

Considering the recent energy shortfalls being experienced across Europe, the owners of Tarba (Prospex and Warrego Energy Limited) have temporarily agreed to operate the power plant 24 hours per day for six days per week from 4 March 2022 until 15 March 2022 at which point the reservoir performance and the operating regime will be reviewed.

Recently, revenues generated by the plant have been at an all-time high as a result of the current electricity prices. Switching to almost continuous operations will further boost revenue.

This has been made possible as a direct result of the successful plant automation work completed at the end of 2021. The automation of the power-plant has enabled 24/7 production and therefore an ability to produce at times of peak demand, regardless of day or time.

The price of electricity in Spain remains at unprecedently high levels and is currently more than six-times what it was in March 2021 when the El Romeral power-plant was acquired.

Currently Tarba has cash in hand of more than €450,000. In January and February 2022 monthly income from power generation was €285,125 and €262,974 respectively.

A reservoir modelling project to history-match and forecast gas production profiles from the El Romeral concession is nearing completion. Tarba's management team intend to move to continuous daily gas production and generate electricity from the plant 24 hours per day as soon as results from the study indicate that it is prudent to do so. Any change in the production regime will be carried out subject to the safety of personnel, and as permitted by the operational condition and maintenance requirements of the facilities.

Continuous operations will also optimise reservoir management because a constant flow of gas from a gas well is preferable to shutting in production several times a week. Generator efficiency will also benefit from 24/7 operations.

Further additional production capacity exists if new wells can be drilled on the concessions to increase gas production. Tarba applied for permits to drill several infill wells in September 2021 and continues to pursue the consent of the regulatory authorities which is expected later this year.

Mark Routh, Prospex's CEO, commented:

"Before switching to continuous plant operation which has been made feasible by the plant automation project which completed in December 2021, it is essential that safe and reliable operating procedures and systems are tested and proven. It was also crucial that a reservoir modelling history matching and production forecasting study was undertaken to ensure that moving to continuous operations would not jeopardise gas production. When the results of this study are known I believe that a move to 24/7 operations is not only beneficial but prudent."

"It is extremely satisfying that Prospex, through its ownership of Tarba, is now able to increase its electricity output at a time when security of energy supply is so important to us all. I accept that it is a small contribution but our generation capacity could be increased five-fold by receiving permissions to drill our planned infill wells, the first two of which are to be drilled into proven discoveries."

"The extra income generated from the new production regime and the current forward curve electricity prices puts Prospex in a very healthy position for further growth opportunities."

"I expect to be sharing further updates in the coming months."