Prospex Energy Completes Acquisition of Tarba Energía, Boosting Spanish Gas Production
Why we think this is good
The acquisition of Tarba Energía, which holds the El Romeral gas and power project and the Tesorillo and Ruedalabola exploration permits in Spain, is a positive development for Prospex Energy. The transaction is expected to significantly increase the company's gas production and revenues once the permits to drill five new wells on the El Romeral concessions are approved. The acquisition price appears competitive, and the funding is secured from Prospex's existing cash resources, reducing financial risk. While some regulatory approvals are still pending, the successful completion of the Environmental Impact Assessment consultation is an encouraging sign. Overall, the transaction aligns with Prospex's strategy of acquiring undervalued projects with near-term value triggers.
Key Points
- Prospex has completed the acquisition of 100% of Tarba Energía, which holds the El Romeral gas and power project and the Tesorillo and Ruedalabola exploration permits in Spain
- The acquisition is expected to significantly increase Prospex's gas production and revenues once the permits to drill five new wells on the El Romeral concessions are approved
- The acquisition price of €662,725 for 50.1% of the 90 bcf of prospective resources equates to a competitive US$0.016/mcf or US$0.092/Boe
- The deal has been fully funded from Prospex's existing cash resources, reducing financial risk
- Regulatory approvals for the new wells are still pending, but the successful completion of the Environmental Impact Assessment consultation is an encouraging sign
Summary
Prospex Energy has completed the acquisition of 100% of Tarba Energía, which holds the El Romeral gas and power project and the Tesorillo and Ruedalabola exploration permits in Spain. The transaction is expected to significantly increase Prospex's gas production and revenues once the permits to drill five new wells on the El Romeral concessions are approved. The acquisition price of €662,725 for 50.1% of the 90 bcf of prospective resources equates to a competitive US$0.016/mcf or US$0.092/Boe. The deal has been fully funded from Prospex's existing cash resources, reducing financial risk. While regulatory approvals for the new wells are still pending, the successful completion of the Environmental Impact Assessment consultation is an encouraging sign. The acquisition aligns with Prospex's strategy of acquiring undervalued projects with near-term value triggers.