Rome, Nov 27, 2008 AEST (ABN Newswire) - The Italian Government has granted Australia's Po Valley Energy Limited (ASX:PVE) a 20-year production concession for the Company's largest asset, the Sillaro gas field, near Bologna in northern Italy.
The Sillaro milestone follows the grant earlier this month of a similar concession for Po Valley's Castello gas field further to the northwest, near Milan.
As a result, Po Valley has now been granted the majority of all production concessions issued in on-shore Italy in the past five years and all of the new production concessions granted in northern Italy since the oil and gas sector's deregulation in 1998.
The 20-year Sillaro production concession expires in November 2028 and provides Po Valley with the legal right to develop the field and produce and sell natural gas. This includes the full approval of environmental, regional and comune authorities.
Po Valley's preparations to bring Sillaro and Castello into production are well advanced. The pipeline connection for Sillaro is currently under construction and is expected to be completed by the end of next month. Construction of the surface plant equipment for both the Sillaro and Castello fields is complete and is currently awaiting installation.
"The granting of production concessions for both Sillaro and Castello puts Po Valley at the forefront of new gas field development in Italy. We account for two out of three new on-shore Italy production concessions granted in the past five years and are exceptionally well prepared to move our fields into production next year," Po Valley's Chief Executive Officer, Mr. Michael Masterman, said today.
"The equipment is ready, pipeline connection is near completion, and Sillaro will follow Castello into production in 2009, becoming our second producing gas field" Mr. Masterman said.
"Italy continues to have exceptional parameters for low cost high margin gas field development, combining a large market, high gas prices, an extensive pipeline grid, gas of high natural purity, very low project capital costs and an attractive royalty regime.
"Commercial success, however, requires skillful and patient navigation of the complex regulatory environment, for which the Company continues to demonstrate its strong capability through the granting of these two production concessions." Mr Masterman said.
"Their granting is also a tribute to the positive attitude and support being shown by Italian Government authorities and the Ministry for new energy developments in northern Italy."
The Sillaro field has proven plus probable (2P) gas reserves of 14 billion cubic feet (bcf), and is expected to have an initial production rate of 3.8 million cubic feet per day.
Sillaro will be a two-well field, producing from three gas bearing levels, and delivering gas to the national pipeline grid some 300 metres away.
Contact
Michael Masterman
Po Valley Energy
Mob: +61-417-851-303
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