Prospex Energy PLC Signs New Gas Sales Agreement with Hera Group

Hera Trading deal secures 12 months of Selva gas sales for Prospex

Prospex Energy has locked in its next buyer for Italian gas. The Selva Malvezzi joint venture has signed a 12-month gas sales agreement (GSA) with Hera Trading S.r.l. (part of the Hera Group), starting 1 October 2025 and running to 1 October 2026. This replaces the current contract with BP Gas Marketing, which concludes on the same day.

Po Valley Operations (PVO) operates Selva and holds 63%. Prospex has an effective 37% interest via two subsidiaries: 17% through PXOG Marshall Limited and 20% through UOG Italia Srl. The gas comes from the Podere Maiar-1d well, which has already delivered approximately 54.4 million standard cubic metres since first gas on 4 July 2023.

What’s actually been agreed – volumes, pricing and timing

This is a straightforward offtake switch to a well-known local counterparty. Hera Trading is part of Hera S.p.A, a major Italian multi-utility listed on the FTSE MIB, with operational headquarters in the Bologna area. The JV ran a competitive tender and Hera emerged as the winning bidder. The operator expects strong local support for this outcome.

How the price is set: IG Index GME (PSV Day-Ahead)

The gas price will float with the Italian PSV Day-Ahead market, using the IG Index GME. In plain English: the daily price is the arithmetic average of trades done between 17:15 and 17:30 in Italy’s day-ahead gas market, covering day-ahead and weekend products. Prospex’s CEO notes that the Italian index typically trades at a premium to the Dutch TTF, so Selva has historically achieved a premium for its gas sales.

Jargon buster: PSV is Italy’s gas hub. Day-Ahead means gas for delivery the next day. SNAM is Italy’s gas transmission operator. Nominations are the daily volume schedules the producer commits to deliver.

Operational backdrop: Podere Maiar-1d keeps delivering

Since first gas in July 2023, Podere Maiar-1d has produced around 54.4 million standard cubic metres from the C2 reservoir level. For the new Hera contract, the JV expects to supply about 27.963 million standard cubic metres over the 12 months from October 2025. That equates to roughly 76,600 standard cubic metres per day on average over the period.

The current BP Gas Marketing GSA has underpinned nearly two and a half years of production and sales. The RNS makes a point of thanking BP for its support as the agreement winds down in October 2025.

Why this matters for Prospex investors

• Sales continuity secured: The Hera deal neatly bridges from the expiring BP contract, maintaining uninterrupted offtake for Selva gas.
• Local partner advantage: Hera is a major Emilia-Romagna operator. Selling to a regional multi-utility should help with stakeholder alignment and community engagement around the field.
• Premium pricing potential: With prices linked to the IG Index GME (PSV Day-Ahead), and management highlighting that IG typically trades above TTF, Selva should continue to capture a premium versus pan-European benchmarks.
• Cash flow clarity: Payment terms are set – settlement 20 days after month-end – and SNAM transport costs are built into the invoicing mechanics. That helps forecasting.
• Volume guidance: The 27.963 million standard cubic metres estimate gives a clear view on targeted throughput for the period.

The balanced view: positives and watch-outs

• Positive – Competitive process outcome: The JV ran a tender and selected Hera, suggesting market interest and potentially supportive terms, even if exact commercial details are not disclosed.
• Positive – Flexibility on nominations: Monthly, weekly and daily provisional nominations with a ±10% tolerance gives operational wiggle room.
• Neutral – Floating price exposure: Day-ahead indexation keeps Prospex exposed to Italian spot volatility. There are no floors, caps or hedges disclosed.
• Neutral/Negative – No automatic extension: There is no built-in rollover. Extension talks must start at least 30 days before 30 September 2026, so renewal risk exists beyond the first year.
• Data gap – Commercial specifics: The RNS does not disclose any fixed premia, discounts, or additional fees beyond the index linkage and transport cost treatment.

What to watch next

• Production performance: Delivery versus the 27.963 million standard cubic metres annual estimate. Any updates on field uptime, reservoir management, or additional zones would be relevant, though none are disclosed here.
• Italian gas market dynamics: PSV Day-Ahead price movements will directly feed through to realised sales. Keep an eye on seasonal demand, storage levels and continental supply headlines.
• Stakeholder relations: With Hera as a local counterparty, community and permitting dynamics may be smoother. Any feedback from regional authorities or SNAM would be noteworthy.
• Contract renewal window: Diary note – extension discussions must commence at least 30 days before 30 September 2026. Investors should expect clarity on the 2026-27 offtake around late summer 2026.

Bottom line: a tidy handover that keeps the cash register ringing

This is a sensible step for the Selva JV. Hera brings local heft, the index linkage keeps pricing transparent, and the volumes look consistent with recent performance from Podere Maiar-1d. The lack of an automatic extension is a mild negative, but that is common in short-cycle European GSAs.

Overall, this announcement reduces offtake risk from October 2025, maintains exposure to a typically premium Italian gas price, and reinforces Prospex’s regional relationships. For a 37% holder, that is solid business: dependable sales, clear terms, and continued momentum from a producing asset.