• Warrego acquires a minimum 50.1% interest in an operational gas power project in southern Spain with 3 producing wells and 13 prospects
• Immediate production, revenue, reserves and resources
• The 13 prospects have gross contingent and unrisked prospective gas resources of 5 Bcf and 90 Bcf respectively

Warrego Energy Limited has agreed to acquire a minimum 50.1% indirect interest in El Romeral, an integrated gas production and power station operation located in the Guadalquivir basin in southern Spain.

El Romeral comprises three production licences, a 100%-owned 8.1 MW power station supplied by three producing wells, 13 prospects and multiple low-cost development opportunities with the potential to significantly increase gas production, electricity generation and revenue.

Group CEO and Managing Director Mr Dennis Donald, said, 
“The acquisition of an onshore producing asset such as El Romeral represents a low risk strategy to add reserves to our balance sheet and at the same time generate near-term cash flows to support future growth and complement the company’s exploration and appraisal activities at Tesorillo. The acquisition is part of Warrego’s strategy of being a strong upstream player focusing on Australia and Spain and we are excited about the opportunities this acquisition will demonstrate to the market both in Europe and Australia.”

“Our Board and management team have considerable previous experience of these types of operation and we expect the knowledge gained from operating El Romeral will also provide substantial benefits as we progress appraisal and development planning and gas marketing for the West Erregulla fields, in Western Australia,” he concluded.

El Romeral asset overview

Eleven wells drilled since 1950s including seven post-1983 which discovered gas

• Three wells currently producing 150 mscfd net
• Two shut-in gas wells with low cost workover potential

Two discoveries and 13 nearfield prospects identified on c. 550 km of 2D seismic supported by AVO analysis

• Two undeveloped discoveries with a best estimate of 5 Bcf of gross contingent resources(1)
• Eleven prospects with 90 Bcf gross best estimate unrisked prospective resources(1)

Profitable El Romeral power station operating 16h/d provides immediate revenues and low-cost route to commercialisation for future gas discoveries, generates monthly and cash-flow positive revenues via sales to the Spanish electricity grid.

(1) Information taken from 2019 independent reserves and resources report from Netherland Sewell and Associates to Tarba Energia SL as the actual acquiring company.

Acquisition arrangements

• The El Romeral asset will be acquired by Warrego’s 85% owned Joint Venture vehicle, Tarba Energia SL (“Tarba”). Prospex Oil and Gas Plc owns the remaining 15% of Tarba.
• Tarba has agreed to acquire El Romeral for an initial consideration of €750,000 from Petroleum Oil and Gas España S.A (‘Petroleum’), a subsidiary of Naturgy Energy Group S.A. (‘Naturgy’)
• Tarba’s two shareholders, Warrego and Prospex, have entered into an acquisition funding agreement whereby Warrego will fund the initial consideration and Prospex will have 90 days to elect to take up to a 49.9% interest in the Project. Warrego will then take the balance. Warrego’s share of the funding of the acquisition will be provided from existing cash reserves.
• Prospex is Warrego’s partner via Tarba in the Tesorillo gas project in Spain. Both partners believe El Romeral will be highly complementary to the Tesorillo project

Drilling and development opportunities

There is a low cost and rapid route to commercialisation via tie-ins to the Project-owned power station in the later part of 2020 and in 2021. Planning for this with Prospex will commence in the new year.

Link to Warrego Spain country profile