Prospex Energy PLC subsidiary PXOG Marshall Ltd. signed a conditional agreement with UOG Holdings PLC subsidiary United Oil & Gas PLC to acquire 100% of the share capital of UOG Italia Srl for €2.165 million in cash.
UOG Italia Srl holds a 20% non-operated interest in the Podere Gallina license in Italy’s Po Valley region, which contains the Selva gas development project. Currently, Prospex holds a 17% interest in the license with operator Po Valley Energy holding 63%.
The permit lies onshore northern Italy, in the Po Valley basin, with a proven hydrocarbon system where over 5,000 wells have been drilled historically. The block was operated by ENI and produced 83 bcf from 1960 to 1984 and contains the Selva Malvezzi gas field production concession (preliminary awarded). It was assigned by an independent competent person’s report conducted by CGG in 2019; 13.4 bcf P50 reserves at Selva gas field, gross contingent resources of 14.1 bcf 2C and gross prospective resources of 88.2 bcf best estimate.
The first stage of Selva’s development plan is to bring the Podere Maiar-1 well into production in two steps. Podere Maiar-1d was drilled in fourth-quarter 2017 and encountered two gas bearing reservoirs, C1 and C2, in the Mid-Upper Pliocene sands of the Porto Garibaldi formation. Production testing in January 2018 of C1 and C2 achieved peak flow rates of 148,136 standard cu m/d and 129,658 standard cu m/d, respectively, on an 3/8-in. choke.
The first step to bring the well into production is the installation of a fully automated gas plant at the existing well site, with capacity to produce 150,000 cu m/d of gas. Then, the tie-in of a 70 bar SNAM pipeline to the national grid 1,000 m away. There are minimal gas processing requirements, as Selva gas is high in methane (99%) and has low liquid content.
The sale is conditional upon receipt of approval of the Italian authorities and Prospex completing fundraising. The transaction is expected to close late this year.
The divestment will see United exit activities in Italy.