Prospex Energy PLC (LSE:PXEN) reported a 78% increase in its group cash balance to £1.515 million at 30 September 2026, compared with approximately £852,000 at the end of the previous quarter, supported by higher European energy prices and cash receipts from its gas and electricity operations.
The AIM-listed energy investment company recorded £1.701 million in combined operating revenue receipts from its Selva Malvezzi gas concession in Italy and Tarba Energía operations in Spain during the third quarter, compared with £1.203 million in the preceding quarter.
Prospex also reported progress across its European portfolio, including continued production at Selva Malvezzi, lower operating costs at El Romeral, testing activities at the Viura gas field and development planning for the Mniszow oil discovery in Poland.
The company said its cash position provides funding for near-term activities, while it continues to consider asset-level partnerships to support medium-term investment requirements.
Third-Quarter Cash Receipts Increase to £1.75 Million
Prospex reported total group cash receipts of £1.750 million for the three months ended 30 September 2026, compared with £1.286 million in the second quarter.
Receipts included £1.701 million from the group’s share of gross operating revenue and approximately £48,000 from interest and other financing activities.
Operating revenue receipts increased by approximately 41% from the £1.203 million recorded in the preceding quarter.
Total group cash outgoings declined to £1.086 million from £1.341 million in the second quarter.
These included operating expenditure of £778,000, development costs of £140,000, royalties, taxes and licence fees of £111,000, and debt servicing and repayments of £57,000.
The difference between receipts and outgoings contributed to the increase in the group’s quarter-end cash balance.
For the first nine months of 2026, Prospex reported total cash receipts of £5.332 million and cash outgoings of £3.859 million.
The figures are unaudited and relate to cash resources and operating receipts within the group’s direct control.
Selva Malvezzi Gas Production Continues Under Revised Operating Conditions
Production from the Podere Maiar-1 (PM-1) well at the Selva Malvezzi concession in Italy continued during the third quarter.
The well’s average gross daily production rate was reported at 74,955 standard cubic metres (scm), compared with 77,127 scm in the second quarter and 80,687 scm in the first quarter.
During the second half of September, operator Po Valley Operations Pty Ltd reduced the gas flow rate to approximately 60,000–62,000 scm per day.
The adjustment followed an increase in formation-water production and was implemented as part of reservoir management procedures intended to protect longer-term gas recovery.
Water production had increased from approximately 40–45 litres per day to 70–100 litres per day.
A slickline intervention conducted between 29 and 30 September examined the change in well conditions.
At the reduced gas flow rate, water production remained stable at approximately 80–90 litres per day, while pressures remained within the normal operating range.
No sand or silt production was detected, and the depth of the uppermost sediments remained unchanged.
PM-1 Flow Rate May Increase Following Further Monitoring
Following the September intervention, the operator planned to maintain production from the C2 reservoir interval at approximately 60,000 scm per day during October.
The well is connected to two reservoir zones, the upper C1 and lower C2 sands, but currently produces exclusively from the C2 interval.
The operator continues to monitor water production, reservoir pressures and other performance indicators.
If conditions remain stable, management intends to consider increasing the gas flow rate to approximately 62,000–65,000 scm per day towards the end of October.
Further increases may be evaluated following additional monitoring and technical analysis.
The next scheduled slickline intervention is planned for January 2027, subject to the ongoing assessment of well data.
Higher Gas Prices Support Selva Malvezzi Revenue
Prospex reported a weighted average realised gas price of €0.69 per standard cubic metre during the third quarter, compared with €0.48 in the second quarter and €0.43 in the first quarter.
The increase in realised pricing supported revenue despite lower average production volumes.
Gross revenue from Selva Malvezzi reached approximately €4.566 million during the quarter.
Revenue attributable to Prospex’s 37% interest was €1.689 million, compared with €1.255 million in the second quarter and €1.155 million in the first quarter.
The company said third-quarter revenue reached a record level for the operation.
At 30 September, the gas price was €0.75 per scm, while indications for October were above €0.80 per scm.
Prospex also confirmed that a new 12-month gas sales agreement with Hera Trading S.r.l. came into effect on 1 October 2026.
Revenue attributable to Prospex differs from cash receipts in the group’s unaudited cash-flow statement because of the timing of payments.
Selva Malvezzi Prepares for 2027 Drilling Programme
Prospex continued preparations for further drilling at Selva Malvezzi during the quarter.
Schlumberger Italy delivered a preliminary dataset following processing of the recently completed three-dimensional seismic survey.
The project team will interpret the information to identify and confirm drilling locations for a planned 2027 campaign.
The programme is intended to evaluate additional productive wells within the concession.
Prospex also reported progress in the environmental permitting process.
Italy’s Ministry of Environment and Energy Security has confirmed the admissibility of the Environmental Impact Assessment for a proposed four-well drilling programme.
A 60-day public observation period is now underway.
The timing of drilling activities will depend on the completion of technical planning and the relevant permitting processes.
El Romeral Generates Positive Cash Contribution
Prospex reported improved financial performance at the El Romeral gas and electricity operation in Spain during the third quarter.
The operation is held through Tarba Energía S.L.
Electricity generation revenue increased, supported by continued production and higher electricity prices.
As a result, Tarba generated a positive net cash contribution of £105,000 during the quarter.
The company said Tarba became self-sufficient on a current cash basis during August and September, removing the need for funding support from Prospex during those months.
Gas production and electricity generation continued throughout the reporting period.
New Transformer Reduces Romeral Operating Costs
A replacement transformer was installed and commissioned at El Romeral during the third quarter.
The equipment had originally been ordered in September 2025.
Following installation, Tarba returned a rented transformer to its supplier, reducing fixed monthly operating expenditure by approximately €14,000.
The company said the cost of the new transformer is expected to be funded entirely from Tarba’s internal cash flow, without additional contributions from Prospex.
Prospex also assessed the operation’s ability to maintain its current electricity generation levels.
Based on existing well and reservoir performance, the company expects current generation rates to continue until the third quarter of 2027, with the possibility of extending production beyond that period.
This expectation remains dependent on future operating conditions.
Viura Gas Field Begins Water Re-Injection Testing
At the Viura gas field in Spain, operator HEYCO Energy Iberia continued managing production to support cash generation during the third quarter.
Prospex holds a 7.5% interest in the operation.
During the period, the operator prepared an interference and water re-injection test using the Viura 1 ST3 well.
The testing programme is intended to validate the reservoir dynamic model and assess whether the existing well could be used for produced-water disposal.
Testing began in October, after the end of the reporting period.
Prospex said the initial results were encouraging, although it did not provide detailed technical findings.
Establishing a sustainable water injection system could improve reservoir recovery, operating costs and cash generation.
Further updates are expected as testing progresses.
Viura Reports Monthly Gas and Condensate Production
Viura recorded sales gas volumes of approximately 1.832 million normal cubic metres in July, 1.276 million in August and 1.602 million in September.
Total sales gas volumes for the third quarter were therefore approximately 4.709 million normal cubic metres.
This compares with 7.9 million normal cubic metres in the second quarter and 10.5 million in the first quarter.
Condensate production totalled 522 barrels in July, 377 barrels in August and 453 barrels in September.
Combined third-quarter condensate production was approximately 1,352 barrels, compared with 1,962 barrels in the second quarter.
Water production totalled 7,820 cubic metres in July, 4,094 cubic metres in August and 6,094 cubic metres in September.
The operator’s testing programme is intended to assess options for managing produced water and supporting future field performance.
Mniszow Oil Discovery Development Planning Advances in Poland
Prospex continued technical work on the Mniszow oil discovery within the Dunajec licence in Poland.
The company reviewed historical geological and operational information to develop a potential production strategy.
The proposed approach involves lateral drilling techniques used in other fractured carbonate reservoirs.
During September, Prospex management visited the licence area and met with local seismic and drilling service providers.
The company also published an investor presentation outlining the proposed development approach.
The work is intended to establish a drilling and completion strategy capable of supporting commercial oil production.
Prospex did not announce a drilling timetable, development budget or production forecast for Mniszow.
Nine-Month Cash Flow Reflects Operating and Financing Activities
For the first nine months of 2026, Prospex recorded £3.817 million in operating revenue receipts from assets within its direct control.
The group also received £1.355 million in net debt financing proceeds during the period, primarily associated with financing completed in the first quarter.
Interest and other financing receipts totalled £160,000.
Cash outgoings included £2.686 million in operating expenditure, £441,000 in development costs and £675,000 in royalties, taxes and licence fees.
Development expenditure during 2026 primarily related to seismic processing at Selva Malvezzi.
The group also recorded £57,000 in debt servicing and repayments.
Prospex noted that second-quarter royalties, taxes and licence fees included £177,000 of new permit fees in Poland.
The company’s interim accounts also reflected one-off costs associated with its convertible loan note financing and management changes earlier in the year.
CEO Comments on Operations and Funding Strategy
Tom Reynolds, Chief Executive Officer of Prospex Energy, commented on the group’s third-quarter activities and financial position.
“I am pleased to provide shareholders with an overview of Q3 2026 activities, including unaudited Group cash-flow figures for the period. During the quarter, we focused on operational delivery at El Romeral, resulting in a cash surplus and advanced detailed development plans at Mniszow in Poland.
“At Selva Malvezzi, PM-1 delivered record production and revenues during the quarter. The new seismic data is feeding into the 2027 drilling and activity plan, which aims to establish additional productive wells within the concession. In the meantime, the PM1 well will be carefully managed to optimise its continuing contribution.
“Ending the quarter with a strong cash balance of over £1.5 million provides the Prospex with sufficient cash to progress assets in the near term. Consistent with previous guidance, I expect medium-term capital needs to be met by introducing partnership capital at the asset level where the Company has engaged with a number of interested counterparties. This will allow us to add value to our assets through discovery, de-risking and development, maximising value for existing shareholders.”
The company indicated that discussions with potential partners are continuing as part of its approach to funding future development activities.
No binding partnership agreements or financing commitments were announced.
Outlook for the Remainder of 2026
Prospex enters the final quarter of 2026 with a group cash balance of £1.515 million and continued production from its Italian and Spanish operations.
At Selva Malvezzi, the operator is monitoring PM-1 well performance following the September reduction in gas flow rates.
Further analysis of seismic data will support planning for the proposed 2027 drilling programme, while the environmental assessment process for four additional wells continues.
At El Romeral, the company expects the installation of the new transformer to reduce operating costs and support Tarba’s cash generation.
Testing at Viura will continue to assess the potential for water re-injection, while development planning at Mniszow remains focused on establishing a commercial production strategy.
Prospex expects to fund near-term activities from existing cash resources and intends to pursue asset-level partnership capital for medium-term development requirements.
More About Prospex Energy
Prospex Energy PLC is an AIM-listed investment company focused on natural gas, electricity generation and energy development projects in Europe.
Its portfolio includes interests in the Selva Malvezzi gas concession in Italy, the El Romeral gas and electricity operation and Viura gas field in Spain, and the Mniszow oil discovery within the Dunajec licence in Poland.
Prospex is classified as an investment entity under IFRS 10. Consequently, its statutory financial statements recognise investments in subsidiaries, joint ventures and underlying assets at fair value rather than consolidating their operating results.
The group’s third-quarter cash-flow information is unaudited and excludes cash balances held by entities outside Prospex’s direct control, including HEYCO Energy Iberia.
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