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Prospex Energy Share Price Plunges After Warning of Selva Field Delays

Sam Boughedda trader
Updated 26 Oct 2021

Shares of AIM-quoted Prospex Energy (LON: PXEN) plunged Tuesday after the company warned of delays at the Selva field development project in Italy.

 The company holds a 17% interest in the field.

According to an update from Prospex, Po Valley Energy, the operator of the Podere Gallina licence in Italy, where the Selva field is located, has been advised by the national pipeline operator (SNAM) in Italy of a delay to tie-in the Selva field to the national gas grid. 

After reviewing the tie-in execution plan with the pipeline operator, they have been informed that the estimated time to complete the tie-in would delay the first gas to the first half of 2023.  

According to the Italian gas network code, the tie-in to the gas grid can only be done by the operator, and the delay is, in part, a result of supply chain disruption due to COVID-19, which has impacted many other businesses globally.

Po Valley Energy also informed Prospex that there is an increased cost estimate of approximately 15% for related materials, which is likely to increase the gross development capex for the Selva Gas field from €2.3 million to €2.65 million.

“It is disappointing that the revised schedule for the tie-in works for our 4-inch pipeline to the national gas grid will delay the delivery of first gas from this project at a time when Europe is facing an unprecedented energy crisis and a shortage of gas,” said Mark Routh Prospex's CEO.

“We have asked Po Valley Energy, as operator, to engage with SNAM to seek an acceleration of the tie-in works to the national grid network.”

As a result of the delays, Prospex's stock price has plunged 13% to 3p per share, putting it down over 22% in the last month.

Should you invest in Prospex Energy shares?

Prospex Energy shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Prospex Energy shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies

Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.