Prospex Energy plc (AIM: PXEN), the AIM quoted investing company focused on European gas and power projects, wishes to inform shareholders that it has been advised by the Operator of the Viura field, HEYCO Energia Iberia S.L. ("HEI" or the "Operator"), of the temporary cessation of production of the new Viura-1B well due to a leak in the completion tubing. The Operator is sourcing the necessary equipment including mobilising a suitable drill rig to perform the workover with the aim of reinstating production from the field by mid-June 2025. Although this is a temporary halt to production, it will have an impact on the stated schedule for drilling the development wells, which is now anticipated to take place next year.
Prospex owns 7.24% of the Viura field through its ownership of 7.5% of HEYCO Energy Iberia S.L. ("HEI" or the "Operator"). Prospex is accruing 14.47% of the production income from the Viura gas field until payback of its capital investment (expected to be ک£8 million) plus the accrued 10% p.a. interest thereon.
Mark Routh, Prospex's CEO, commented:
"This is an unfortunate temporary cessation of production at Viura while the operator mobilises the necessary equipment to carry out the required interventions and workovers to re-establish stable gas production from the Viura gas field.
"It is important to re-establish stable gas rates from Viura before the drilling of the new development wells commences in order to optimise the financing options for phase 2 of the development drilling campaign. We have every confidence in the Operator, who can access state-of-the-art technologies and expertise both in country and from the USA, to deliver the optimum outcome of the workover interventions and more importantly the future development well drilling. One benefit arising from the disruption to production at the field and the resultant delay to the development drilling it is that it provides Prospex with more time to generate cash from its other producing assets and fund our share of expenditure at Viura reducing the need to source additional funding from the market.
"I will keep shareholders updated with regular progress reports as the well interventions proceed."
Background
The Viura-1B well is currently not in production and was shut in during April-2025 owing to a leak in the completion tubing which requires a rig intervention to reinstate production. The Operator is now sourcing the necessary equipment including mobilising a suitable drilling rig in order to perform the workover by mid-June 2025.
Total natural gas produced from the Viura-1B well from start-up in December 2024 to the end of Q1-2025 was 0.528 Bcm = 18.6 Bcf which is 77 Bcm = 2.7 Bcf net to Prospex.
Whilst the rig is on site in June-2025 the Operator also plans a workover on the original producing well, Viura-1ST3 which is not currently in production. The Viura-1ST3 workover is in order to shut off a water zone to prevent produced water ingress from deeper in the reservoir flowing to the top producing zones in the new well Viura-1B. Decreasing water production into the processing plant will reduce operational costs. Following this workover the Viura-1ST3 well will not produce gas without further intervention. As advised in the RNS of 8 April 2025, the Viura-3 water injection well is capped and suspended as it has been deemed unsuitable for water injection.
As a result of these necessary workovers, the schedule of drilling the Phase 2 wells Viura-3A and Viura-3B has been pushed back to 2026. This will allow further time for the Operator to procure the necessary equipment and to optimise the 3D seismic reprocessing and reinterpretation to fine-tune the subsurface well locations of these development wells.
The Operator will recommence negotiations with the syndicate of banks to provide debt-finance towards the cost of drilling the development wells upon the resumption of production from well Viura-1B.
The Operator is also planning to test in Q1-2026 the hitherto untested Utrillas-B reservoir, which sits below the main Utrillas-A reservoir horizon and which was identified as containing the presence of gas bearing reservoir quality sandstones in December 2024.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended by virtue of the Market Abuse (Amendment) (EU Exit) Regulations 2019.