Prospex Oil and Gas reports significant commercial gas discovery onshore Italy

LONDON -- Prospex Oil and Gas Plc, the AIM quoted investment company, is pleased to announce that it has been advised by the operator Po Valley Energy Limited (PVE) that strong flowrates from testing operations have confirmed a significant commercial gas discovery at the Podere Maiar-1d appraisal/redevelopment well.  Prospex holds a 17% interest in Podere Maiar, which is located on the Podere Gallina Exploration Permit (Podere Gallina) in the Po Valley region of Italy, a proven hydrocarbon province where over 5,000 wells have been drilled historically.

Podere Maiar was drilled during fourth-quarter 2017 into Selva gas field (previously operated by Eni), which historically produced 83 Bcf of gas between 1960 and 1984. As announced on Dec. 20, 2017, two gas-bearing reservoirs, C1 and C2, were encountered by the Well in the Medium-Upper Pliocene sands of the Porto Garibaldi formation.  Peak flow rates achieved at both levels during testing are as follows:

• C2 (net pay of 25.5 m): 148,136 scm/day (5.2 MMscfd) on a 3/8-in. choke and a pressure differential of 11 bar with no water production - pressure recovery to formation pressure occurred in 2 min.
• C1 (net pay of 15.5 m): 129,658 scm/day (4.6 MMscfd) on a 3/8-in. choke with good pressure recovery of approximately 12 min.

Based on the strong flowrates, which significantly exceed pre-test expectations of 100,000 scm/day, 99.1% methane gas content recorded at both levels, and the Well’s close proximity (600 m) to the Italian national grid pipeline connection, PVE has declared Podere Maiar a commercial discovery.  PVE will now prepare and submit a production concession application to the Italian Ministry in H1 2018.  The Ministry has been formally informed of the discovery and officials were in attendance during the successful test.

In tandem with this, analysis of the log and well test results will commence to generate revised contingent resource and reserve estimates, which is targeted for completion during second-quarter 2018. This work will include reservoir engineering to optimize production from the two gas levels over the field life.

Crucially, further upside exists as in addition to Selva field, Podere Gallina holds several other targets, including the much larger East Selva prospect. The remaining interests in Podere Gallina are held by PVE (63% - operator) and United Oil & Gas Plc (20%).