Prospex Energy (AIM:PXEN) has reported combined revenue of £1.7m from its Selva Malvezzi and Tarba assets for its third quarter, up from £1.2m in the second quarter, as the AIM-quoted investment company closed the period with £1.515m in cash.
The cash balance marked a 78% increase on the £852,000 held at the end of the second quarter.
Prospex, which is focused on European natural gas and power projects, reported that the operator of the Selva Malvezzi concession in Italy, had reduced the gas flow rate at the Podere Maiar-1 well to around 60,000 to 62,000 standard cubic metres a day in the second half of September, after formation-water production rose from around 40-45 litres a day to 70-100 litres a day.
A slickline intervention carried out on 29 and 30 September found water production had stabilised at approximately 80-90 litres a day at the reduced flow rate, with pressures within normal range and no sand or silt detected, it added.
Management said it intends to raise the flow rate to around 62,000 to 65,000 scm/d at the end of October if water production and pressures remain stable, with the next slickline intervention planned for January 2027.
Strong European gas prices cushioned the impact of the lower flow rate: the weighted average realised price reached €0.69 per standard cubic metre in the quarter, generating gross revenue of €4.566m and €1.689m net to Prospex's 37% working interest, with the price hitting €0.75/scm at the end of September and October indications above €0.80/scm.
Schlumberger Italy has delivered preliminary 3D seismic data to help firm up drilling locations for the planned 2027 campaign at Selva Malvezzi, where Italy's Ministry of Environment and Energy Security has declared the environmental impact assessment for a four-well drilling programme admissible, triggering a 60-day public observation period.
A new 12-month gas sales agreement with Hera Trading took effect on 1 October.
At El Romeral in Spain, Tarba Energía completed installation of a new transformer during the quarter, cutting monthly fixed operating costs by approximately €14,000 and funded entirely from the subsidiary's own cash flow.
Tarba made a positive net cash contribution of £105,000 for the quarter and was self-sufficient on a cash basis for August and September, removing the need for funding support from Prospex; the company expects current generation levels at El Romeral to continue until the third quarter of 2027, with potential to extend further.
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At the Viura field, operator HEYCO Energy Iberia began an interference and water re-injection test at the Viura 1 ST3 well after the quarter ended, with early indications described as encouraging for validating the reservoir model and the well's potential use for produced water disposal.
In Poland, Prospex developed a drilling and completion strategy for the Mniszow oil discovery on the Dunajec licence based on lateral drilling techniques used in other fractured carbonate reservoirs, following a September site visit to meet local seismic and drilling contractors.
"Ending the quarter with a strong cash balance of over £1.5 million provides Prospex with sufficient cash to progress assets in the near term," said chief executive Tom Reynolds, adding that he expects medium-term capital needs to be met "by introducing partnership capital at the asset level where the Company has engaged with a number of interested counterparties."