First gas confirmed at Bainet by Prospex

17th Sep 2018 13:59

(Sharecast News) - Investment company Prospex Oil and Gas has been advised by operator Raffles Energy that first gas production has commenced from the Bainet gas field at the EIV-1 Suceava Concession in North East Romania, it announced on Monday.The AIM-traded firm's wholly-owned subsidiary, PXOG Massey, held a 50% non-operated interest in the 980 square kilometre concession.It said gas from the field was being sold into the national grid operated by Transgaz, at the Romanian market price of around €6 per mcf.RELATED: Prospex narrows losses as it makes good development progressThe buyer of gas was described by Prospex as a "well-established" Romanian gas trading business, with gas delivered in one month being paid for in arrears in the following month.It said the operator had chosen to target an initial flow rate of about 0.7mmscf per day, with production rates able to be adjusted up or down according to the well performance and the market demand.Bainet, which was drilled in November last year and completed as a producer, had been connected to the Raffles-operated Bilca gas processing plant via a 2.2km flowline tie back to the existing production infrastructure.The well was drilled to a total depth of 600m, and encountered 9m of reservoir with 8m of net gas pay consisting of a "good quality" Sarmatian sandstone reservoir, similar to that found in fields producing in and around the concession.Prospex said Bainet was the first ready-to-drill prospect out of the multiple prospects and leads identified on the concession.The remaining prospects continue to represent relatively low cost opportunities to further increase production at Suceava, and were currently being evaluated for exploration and potential development.Bainet came on stream within the original drilling and development estimate, with Prospex having paid its share, totalling €0.4m."The commencement of first gas production in Romania is a milestone event, which transforms Prospex into a revenue generative investment company," said non-executive chairman Bill Smith."With multiple similar prospects already identified on the licence, each of which can be explored and developed at relatively low cost, Suceava represents an excellent, low risk opportunity to scale up our revenues."Smith noted that Prospex first announced the acquisition of a 50% interest in Suceava in August last year, and in the intervening period the joint venture had made a commercial gas discovery and completed planning, permitting and development work, now bringing the Bainet well into production."To have successfully put Bainet into production in such an incredibly short time frame, congratulations must first go to Raffles, the operator, whose professional approach and proven experience have enabled us to reach this very significant step on budget."I would also however like to take this opportunity to congratulate our own first-rate team, who not only identified Suceava as a suitable project but their contribution along the way," Smith said."This is an incredible achievement for any oil and gas company, let alone a junior such as Prospex."The company intended to replicate that success elsewhere on its other licences, Smith added, including the Podere Maiar gas discovery onshore Italy which was being advanced towards production, and Tesorillo in Spain where work was underway to de-risk up to 2TCF of gross prospective resources."With activity ongoing across our asset base, I look forward to providing further updates on our progress."