LONDON (ShareCast) - (Sharecast News) - Prospex Oil and Gas updated the market on the ongoing work programme to test known gas bearing sandstone sequences at the Tesorillo Project in the Cadiz Province of southern Spain on Friday.
The AIM-traded company said Tesorillo covers 38,000ha in a proven hydrocarbon region, and contains a known gas discovery which a competent person's report undertaken by Netherland Sewell and Associates in 2015 estimated could hold gross unrisked prospective resources of 830 billion cubic feet of gas, with upside in excess of 2 Tcf.

It said the operator at Tesorillo, Tarba Energia - previously called Schuepbach Energy Espania - had notified it that the relevant contracts to carry out a passive audio-magnetotellurics survey on the licence area had now been awarded to GeoProSys and GeoGnosia, which it described as two "leading" European AMT expert contractors.

With all preparatory work nearing completion and mobilisation ongoing, Prospec said the Tesorillo 2018 AMT survey was due to begin in the near-term, as soon as access to the land could be gained once the year's "exceptionally late" harvesting season in Southern Spain ended.

In addition to historic seismic survey data, the AMT survey would help evaluate the subsurface geology of the permit area and test for resistivity as a further indication of the presence of hydrocarbons.

It said it expected that after AMT data acquisition was completed, subsequent processing and interpretation phases would follow, with final results expected late 2018.

In tandem with the AMT survey, structural fieldwork mapping and analysis would be shortly initiated with the support of the University of Granada, Prospex added.

That applied geoscience analysis would be complementary to the subsurface knowledge gained via the AMT survey.

In addition, technical discussions with potential drilling and completion contractors were reportedly at an "advanced stage" as part of the ongoing well permitting and approvals process initiated at ministry level.

Following receipt of the required approvals and support from the local authorities, an environment impact assessment (EIA) had also been commissioned.

As part of that process, Prospex said relevant surveys over the Tesorillo permit were currently being carried out by a "well-recognised" environment consultancy group from Seville.

As it announced on 19 December, Prospex currently held a 2.5% interest in Tesorillo and had the option to increase that to 49.9%, based on the results of the current work programme, which included the MT Survey and - subject to the results - a well to target the Almarchal-1 discovery.

"With an historic gas discovery, exposure to the European fore deep play, excellent access to infrastructure and local markets, Tesorillo shares many similar characteristics to our interests in Romania and Italy where over the last 12 months commercial gas discoveries have been made at both projects," said Prospex non-executive chairman Bill Smith.

"One major difference however is the potential size of the field at Tesorillo."

Smith said that, whereas prospective resources on the near term producing Podere Gallina permit in Italy and the Suceava permit in Romania were estimated in terms of tens of BCF of gas, there could be up to two trillion cubic feet of gas at Tesorillo.

"We consider potential resources at Tesorillo to be on a far larger scale and success here would therefore be game-changing for Prospex.

"With this in mind, we are looking forward to commencing the MT survey, the results of which will inform a planned drilling campaign focused on unlocking the huge volumes of recoverable gas we believe the field holds."

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