AIM-quoted oil and gas company Prospex Energy (LON: PXEN) is applying for exploration licences in Poland. This will be funded by income from existing production.
The award of licences is based on geological and geophysical work programmes and commitments. The licence awards should happen in the first quarter of 2025. There is a favourable regulatory environment in Poland and the company has expertise from previous experience in the country.
Prospex Energy is signing a letter of intent with AGH University of Krakow, which will give access to the expertise of the Department of Geology.
There are existing investments in Spain and Italy, so Poland potentially provides a third country. This is part of the strategy to broaden the geographic exposure to a country with known gas reserves.
Initial results from the Vlura-1B development well in Northern Spain are positive. Drilling intercepted significant gas shows and that confirmed the high quality reservoir. This well will be connected up and first production should be by November. The acquisition of the 7.2% stake in the Vlura gas field was completed at the end of August.
The operator is extending the well by 200-300 metres to appraise the Utrillas-B formation. This could cost Prospex Energy up to €2m.
Currently, VSA expects production to reach 12mmcf/day by the end of the year.
During the summer, Prospex Energy raised £4.2m from a placing and oversubscribed retail offer at 6p/share. The share price has fallen back to 5.75p.