Prospex's shares were up 7.9% on Tuesday morning at 0.561 per share.
The company is acquiring the stake through Schuepbach Energy Espania SRL, which has a 100% interest in Tesorillo.
The acquisition is going ahead in three stages, with the first stage seeing Prospex buying 2.5% for EUR48,750, effective immediately. Stage two gives Prospex the option to buy a further 12.50% for EUR280,000, and stage three gives an option to buy the remaining 35% for EUR1.7 million when drilling of a well is due to commence.
Prospex said the take up of the second and third stages will be based on the results of the upcoming work programme carried out by Schuepbach. On acquisition of the third tranche, it said, a drill programme would likely have been agreed.
Tesorillo is made up of two petroleum exploration licences: Tesorillo and Ruedalabola. They cover 38,000 hectares of a proven hydrocarbon region in Cadiz province in southern Spain. A 2015 report gave a gross unrisked prospective resource of 830 billion cubit feet, with 2 trillion cubit feet of potential upside.
The project has excellent infrastructure, Prospex said, and is located 3.9 kilometres from the North African Maghreb gas pipeline European landing point.
Non-Executive Chairman Bill Smith said: "Tesorillo offers the potential for very significant growth during 2018 and 2019 and caps a highly active and successful year for Prospex. In line with our strategy we have acquired interests in three onshore European projects and participated in the drilling of two new wells, both of which have resulted in gas discoveries."
"As with our Suceava concession in Romania and the Podere Gallina exploration permit in Italy, Tesorillo offers multiple development and appraisal gas opportunities. With independently certified unrisked prospective resource of 830 billion cubic feet best estimate, with upside in excess of 2 trillion cubit feet, the company-making potential of our latest investment is clear," Smith said.
By George Collard; georgecollard@alliancenews.com
The project has excellent infrastructure, Prospex said, and is located 3.9 kilometres from the North African Maghreb gas pipeline European landing point.
Non-Executive Chairman Bill Smith said: "Tesorillo offers the potential for very significant growth during 2018 and 2019 and caps a highly active and successful year for Prospex. In line with our strategy we have acquired interests in three onshore European projects and participated in the drilling of two new wells, both of which have resulted in gas discoveries."
"As with our Suceava concession in Romania and the Podere Gallina exploration permit in Italy, Tesorillo offers multiple development and appraisal gas opportunities. With independently certified unrisked prospective resource of 830 billion cubic feet best estimate, with upside in excess of 2 trillion cubit feet, the company-making potential of our latest investment is clear," Smith said.
By George Collard; georgecollard@alliancenews.com
