LONDON (ShareCast) - (Sharecast News) - Prospex Energy announced a temporary suspension of production from the Viura-1B well at the Viura gas field in Spain on Tuesday, following notification from the field's operator, Heyco Energia Iberia.
The AIM-traded firm said the shutdown was due to a leak in the completion tubing, with remedial work planned to restore production by mid-June.

It said the operator was currently sourcing the necessary equipment, including a suitable drill rig, to carry out the required workover.

While the interruption was expected to be temporary, it would delay the timeline for drilling further development wells at the field, which were now scheduled for next year.

Prospex said it holds an indirect 7.24% interest in the Viura field via its 7.5% stake in Heyco Energia Iberia.

Until payback of its estimated £8m capital investment plus 10% annual interest, the company was entitled to 14.47% of the field's production income.

"This is an unfortunate temporary cessation of production at Viura while the operator mobilises the necessary equipment to carry out the required interventions and workovers to re-establish stable gas production from the Viura gas field," said chief executive officer Mark Routh.

"It is important to re-establish stable gas rates from Viura before the drilling of the new development wells commences in order to optimise the financing options for phase two of the development drilling campaign.

"We have every confidence in the operator, who can access state-of-the-art technologies and expertise both in country and from the US, to deliver the optimum outcome of the workover interventions and more importantly the future development well drilling."

Routh noted that one benefit arising from the disruption to production at the field and the resultant delay to the development drilling it was that it provided Prospex with more time to generate cash from its other producing assets and fund its share of expenditure at Viura, reducing the need to source additional funding from the market.

"I will keep shareholders updated with regular progress reports as the well interventions proceed."

At 1539 BST, shares in Prospex Energy were down 11.32% at 5.37p.

Reporting by Josh White for Sharecast.com.

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