Prospex Energy (LSE:PXEN) reported a loss of £2.8 million for 2025, largely reflecting a £2.5 million non-cash valuation adjustment related to reserve depletion at the Selva gas field and weaker year-end gas prices. The revaluation reduced the company’s net asset value to £22.9 million and also lowered reported total assets for the year.
Despite ending the period with limited cash reserves, Prospex strengthened its financial position through additional convertible loan funding and stronger-than-expected gas sales during the opening quarter of 2026. The company said liquidity had increased to approximately £907,000, providing sufficient coverage for expected capital expenditure and working capital requirements for the remainder of the year.
Production Progress Across Italy and Spain
Operationally, Prospex maintained consistent gas production and revenue generation from the Selva field in Italy. The company also secured a new 12-month gas sales agreement linked to premium Italian gas index pricing, while advancing a planned four-well development programme following completion of a major 3D seismic survey and continued permitting work.
In Spain, Prospex completed the move to full ownership of Tarba Energía and the El Romeral gas-to-power project. Production at El Romeral resumed after earlier transformer-related disruptions, and permitting efforts continue for five additional wells. The company also reported ongoing progress at the Viura field, where production has restarted and reservoir modelling work is being carried out to support future drilling plans and a potential debt financing facility.
Strategic Expansion and Portfolio Review
Prospex also introduced management and board changes during the year, appointing a new chief executive officer and non-executive director. This was followed by a wider strategic review of the company’s portfolio, aimed at improving shareholder value and strengthening communication with the market.
The group additionally expanded its footprint into Poland through the acquisition of 100%-owned San and Dunajec exploration licences. The licences include an undeveloped oil discovery currently under evaluation, providing Prospex with added long-term development potential as European governments continue prioritising energy security and domestic gas supply.
Financial Outlook Remains Challenging
The company’s outlook is held down primarily by weak financial fundamentals—persistent operating losses and multi-year negative operating/free cash flow—despite a relatively low-debt balance sheet. Technicals also lean negative with the price below key moving averages and a negative MACD, while valuation is pressured by a very high P/E and no reported dividend yield.
More about Prospex Energy
Prospex Energy is an AIM-quoted investment company in the oil and gas sector, focused on European natural gas assets spanning production, development and exploration. Its portfolio includes interests in the Selva field in Italy, the El Romeral gas-to-power project and associated permits in Spain, the Viura gas field, and newly awarded exploration licences in Poland, positioning it to benefit from European energy security trends.
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