Prospex Energy reports wider annual loss

(Sharecast News) - Prospex Energy reported a wider annual loss for 2025 on Thursday, driven mainly by a non-cash revaluation loss on its Italian investment, while highlighting continued production from Selva, the return of El Romeral to production after the period ended and the expansion of its portfolio into Poland. The AIM-traded company said it made a loss for the year ended 31 December of £2.8m, compared with a £46,759 loss in 2024.

The result included an unrealised £2.5m loss on the revaluation of investments, primarily relating to reserve depletion from production at the Selva field and lower gas prices used for valuation at year end.

Shareholder equity, or net asset value, fell to £22.9m from £24.6m, while total assets declined to £24.5m from £25.8m.

Prospex said cash and cash equivalents stood at £38,935 at the end of December, compared with £1.2m a year earlier.

After the period ended, the company extended its convertible loan note offer, raising a further £653,950 and taking total proceeds to £2.0m, 25% above the original £1.6m target.

Together with stronger-than-budgeted gas sales cash flow, Prospex said it ended the first quarter of 2026 with unaudited cash of £907,000, expected to cover working capital and anticipated capital expenditure for the rest of the year.

During 2025, Prospex acquired full ownership of Tarba Energía, including the El Romeral gas-to-power project and the Tesorillo permit in southern Spain.

It also completed a £1.2m placing and subscription, invested about £3.8m into its assets during the first nine months of the year, and appointed Hannam & Partners as joint broker and Richard Jameson as chief operating officer.

At Selva Malvezzi in northern Italy, the Podere Maiar-1 well produced consistently throughout the year.

Prospex's share of production was 10.4 million standard cubic metres, with its share of gross revenue from gas sales totalling €4.1m.

The project also signed a new 12-month gas sales agreement with Hera Trading to supply about 27.96 million standard cubic metres at prices linked to the Italian gas index.

The operator completed about 140 square kilometres of 3D seismic data acquisition in December, on time and within budget.

Prospex said processing was now being carried out by Schlumberger Italy, while permitting and technical work continued for the planned four-well development programme.

After the year ended, Selva continued stable production, with first-quarter gross production of 7.26 million standard cubic metres, or 2.69 million net to Prospex.

The gas was sold at an average realised price of €0.43 per standard cubic metre, generating €1.16m of net revenue.

At El Romeral, Prospex said the plant generated 3,752 megawatt hours of electricity in the first half of 2025, delivering revenue of €365,152, before going offline from 1 July because of transformer availability issues.

A new transformer was ordered in November and production restarted after the period ended following installation of a replacement rental unit.

The company said it continued to engage with Spanish regulators over permits to drill five wells at El Romeral and connect the project to the Spanish gas grid, which would support direct gas export.

It had also engaged with potential third-party investors interested in supporting development of the assets.

At the Viura field in northern Spain, gross production from start-up in December 2024 to the end of the first quarter of 2025 totalled 30.2 million standard cubic metres, or 4.4 million net to Prospex.

The Viura-1B well was shut down in April after a tubing leak, but was brought back online in October, with production increased in stages.

In the first quarter of 2026, operator HEI carried out production trials to support a dynamic reservoir model for future development drilling.

Prospex said the 2026 focus at Viura was on preparing an independent reserves report that could support a debt facility at HEI, helping minimise shareholder dilution and fund future drilling and tie-in activity.

Prospex also expanded into Poland after the year end, securing the San and Dunajec exploration licences in the Carpathian Foreland Basin, both held 100%.

The company said it had started reviewing historic geological and production data, including the Mniszów undeveloped oil discovery within Dunajec.

Chief executive Tom Reynolds, who joined in February, said Prospex had "an enviable portfolio that combines existing cash flow, development upside and longer-term exploration potential".

"Selva Malvezzi continues to demonstrate its importance as the Company's foundation asset, delivering stable production and revenue while supporting the technical work required for the planned multi-well development programme," he said.

Reynolds said El Romeral had returned to production, Viura offered potential for future value through increased output and development activity, and the Polish licences added longer-term upside.

He added that European energy security and domestic supply remained high on the political agenda, while natural gas prices continued to reflect geopolitical pressures.

At 1246 BST, shares in Prospex Energy were down 6.87% at 2.93p.

Reporting by Josh White for Sharecast.com.

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