Prospex announces its first investment

8th Jan 2016 15:34

(ShareCast News) - Prospex Oil and Gas was celebrating its conditional first investment on Friday, giving it an avenue into the Polish exploration market.The AIM-listed oil and gas firm said it had conditionally agreed to acquire a 49% stake in Hutton Poland from Hutton Energy, for £620,000 in cash.Prospex said the initial consideration was £130,000 with the remaining £490,000 deferred to 31 August 2016.Hutton Poland had seven license applications in progress at the time of the transaction, with the most advanced being the Kolo License application recently offered to Hutton by the regulatory authorities.Prospex said it had been advised by Hutton Energy that the Kolo License award could be finalised in the next fortnight."The Kolo License area is 1,150 square kilometres and is elongated in a NW-SE direction along the strike of the Lodz Trough, a well-known Mesozoic sedimentary basin", said the Prospex board in a statement."The basin is known in Poland by its salt mines (Klodava), but also by important manifestations of gas and oil in shallow water wells", it added.Prospex said the Kolo License ares did not have the benefit of a competent person's report, but that it was in the process of acquiring one.The other license applications from Hutton Poland were for 100% of the Kolo West, Rypin East and Brodnica concessions, and 25% of the South Prabuty, Olesnica and Wielun concessions.Hutton Poland was not obliged to take up the licenses if awarded, with final decisions on the individual applications to ne made at the time of the award."Hutton are a proactive group with good working relationships in the country. We are impressed with the positive attitude of the government and the positive business environment that the exploration business can operate within", said Prospex chairman Bill Smith."Hutton have done a huge amount of groundwork and this will allow rapid progress of its assets from this stage", he added.