LONDON (ShareCast) - (Sharecast News) - Europe-focussed energy investor Prospex Energy updated the market on the El Romeral power project near Carmona in southern Spain on Tuesday, reporting recent record profits as a result of surges in electricity prices.
The AIM-traded firm holds a 49.9% working interest in El Romeral, through Tarba Energía.

It said that given the recent energy shortfalls across Europe, the owners of Tarba - being itself and Warrego Energy - had temporarily agreed to operate the power plant 24 hours per day, six days per week from 4 March to 15 March.

At that point, the reservoir performance and operating regime would be reviewed.

Prospex said recent revenues generated by the plant had been at an all-time high, as a result of current electricity prices, adding that switching to "almost continuous" operations would further boost revenue.

The move was possible due to the completion of plant automation work at the end of 2021, allowing El Romeral to produce at times of peak demand, regardless of the day or time.

Prices for electricity in Spain remained at "unprecedentedly high levels", Prospex said, currently sitting more than six times what it was a year ago when El Romeral was acquired.

Currently, Tarba had cash in hand of more than €0.45m (£0.37m), with recent monthly income from power generation totalling €0.29m in January, and €0.26m in February.

A reservoir modelling project to history-match and forecast gas production profiles from the El Romeral concession, meanwhile, was nearing completion.

Tarba's management team was planning to move to continuous daily gas production and generate electricity from the plant 24 hours per day as soon as results from the study indicated that it was prudent to do so.

Any change in the production regime would be carried out subject to the safety of personnel, and as permitted by the operational condition and maintenance requirements of the facilities, Prospex said.

Continuous operations would also optimise reservoir management, as a constant flow of gas from a gas well was preferable to shutting-in production several times each week.

Generator efficiency would also benefit from 24/7 operations.

The company said further additional production capacity existed if new wells could be drilled on the concessions to increase gas production.

Tarba applied for permits to drill several infill wells in September, and was pursuing the consent of authorities, which was expected later this year.

"Before switching to continuous plant operation which has been made feasible by the plant automation project which completed in December, it is essential that safe and reliable operating procedures and systems are tested and proven," said Prospex chief executive officer Mark Routh.

"It was also crucial that a reservoir modelling history matching and production forecasting study was undertaken to ensure that moving to continuous operations would not jeopardise gas production.

"The extra income generated from the new production regime and the current forward curve electricity prices puts Prospex in a very healthy position for further growth opportunities."

At 1529 GMT, shares in Prospex Energy were up 12.59% at 4.45p.

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