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New Prospects
In November, Po Valley was granted six year exploration licences for its La Prospera and Terra del Sole prospects near Bologna. The two new licences expand our portfolio of exploration licences to nine. Following extensive geological studies and seismic interpretation, we have defined three priority gas targets in the La Prospera licence - Gradizza, Pioppette and Capitello. The most advanced of these is the Gradizza prospect, a shallow (1,000 metre) anticlinal structure with a strong "bright spot" and good seismic definition. It contains estimated P50 potential resources of 7 bcf. Seismic reprocessing and further work is underway on the Pioppette and Capitello structures and on the Castrocaro prospect in Terra del Sole licence area.
Another recent success is the grant of a six year exploration licence for the Podere Gallina permit near Bologna. The permit covers 506 square kilometres. Following integrated geological and seismic interpretation studies, the Company has defined three priority gas targets in Podere Gallina - Fondo Perino, Cembalina and Casa Rossa. The most advanced of these is Fondo Perino, a faulted anticlinal structure at a depth of approximately 1,500 metres and which contains estimated P50 potential resources of 22 bcf of gas. The Cembalina structure, which has the potential to be of similar size, will be the subject of further geological and geophysical study, including possible seismic acquisition, during 2009.
The Company also received preliminary award of three further exploration permits in 2008; Cadelbosco di Sopra near Modena, Grattasasso also near Modena and an offshore Adriatic permit, AR-168-PY "Azzurra". The Cadelbosco permit area contains the Correggio gas discovery previously produced by ENI and estimated to contain remaining P50 gas resources of 35 bcf. In addition to other exploration potential, the permit area also contains the Bagnolo in Piano oil discovery with estimated remaining P50 resources of 5 million barrels of oil ("mmbbl").
The Grattasasso permit, adjacent to the Cadelbosco di Sopra permit, contains the Ravizza oil field which is estimated to contain P50 resources of 5 mmbbl. The preliminary award of exploration licence, AR-168-PY "Azzurra", is the first offshore licence area sought for the Company. It covers an area of 526 square kilometers situated in the Adriatic Sea off Italy's east coast, in shallow water (30 metres) adjacent to the large ENI Agostino and Porto Garibaldi gas fields. ENI previously drilled and tested positive gas flows in separate wells during the 1980s and 1990s; Azzurra-1, Ginevra-1dir,Irma-1 and Carola-1 prior to relinquishing the area. The licence area also has extensive 3D seismic coverage acquired during the 1990s.
Exploration Focus
Initial seismic and geological reviews have been completed on all of our new licences in northern Italy. Some 17 gas prospects have been mapped with P50 potential resources ranging in size from 2.5 to 50 bcf. Like Sillaro, Castello and Bezzecca these gas prospects are expected to yield high quality gas, benefit from close proximity to the national pipeline grid and high Italian gas prices. Detailed geological and geophysical studies are underway and are expected to be completed during 2009. In total, 394 kilometres of seismic has been purchased. The priority targets for the 2010 drilling program are Fondo Perino in the Podere Gallina licence area and two targets in the La Prospera licence area - Gradizza and Cembalina. Final well locations will be identified through these studies with a view to lodging drilling applications late in 2009.
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