Prospex raises cash, makes progress at Kolo

Prospex Oil and Gas updated the markets on its investment in the 1,150 sq km Kolo Licence, onshore Poland on Wednesday, where a well remains on track to be drilled on the Boleslaw conventional gas prospect in the fourth quarter of this year.

The AIM-traded company said Kolo is 100% owned by Strzlecki Energia, a wholly owned subsidiary of Hutton Poland in which Prospex holds a 49% interest.

Its board confirmed that, on behalf of the company, Beaufort Securities successfully raised £775,000 in an oversubscribed placing, the proceeds of which will be used to further support activities at Kolo and provide scope to explore additional investment opportunities, and for general working capital.

Prospex also said it has been advised by the directors of Hutton that Strzlecki has entered into a lease agreement with the landowner at the proposed location of the Boleslaw-1 well.

The term of the lease is four years with the option to extend this as required as part of a producing gas field development.

It added that the next steps will involve pad construction and the securing and mobilisation of the drill rig ahead of the commencement of drilling operations in Q4.

“Securing the surface access for the proposed drill site at Kolo is a key tangible milestone,” said Prospex non-executive chairman Bill Smith.

“With Hutton Poland's team delivering progress on schedule and demonstrating positive engagement with local stakeholders, Boleslaw-1 remains on course to be drilled in Q4 2016.

“We view this well as being potentially a low risk company maker while AGR describe it as 'a worthwhile and attractive exploration opportunity',” Smith added.

He said the Kolo Licence represented an “excellent first investment” for Prospex, and the company was “delighted” with the appetite for this oversubscribed placing.

“The funds raised place the company in a strong position to reach further significant milestones in the development of this asset, as we continue to build a portfolio of high impact onshore and shallow offshore European opportunities with short timelines to production,” he explained.

“With this in mind, we are evaluating other investments, specifically undervalued projects where low cost re-evaluation/re-working of historic exploration offer scope for tangible value trigger points and material value uplift for stakeholders within 12 months of acquisition.

“I look forward to providing further updates on our progress,” Smith said.