News & ASX Releases

Development Go-Ahead For New Italian Gas Field After Reserves Boost

April 11, 2005

Development of a fourth Italian gas field has been given the go-ahead by Australian petroleum explorer and developer, Po Valley Energy (ASX: PVE).

Po Valley — which has already scheduled development activity this year on three other gas fields in Italy’s northern provinces — said today that work would also start in the same region on the Pandino field.

Go-ahead for the Pandino project follows a review of the field’s estimated recoverable proven, probable and possible gas reserves which have been increased nearly 10 fold to 45.3 billion cubic feet (bcf) of gas from a estimate of 5.3 bcf previously.

The Company announced today that the Pandino development would include the drilling of appraisal wells as early as next year.

The Pandino field is located in the Cascina san Pietro licence, 23 kilometres east of Milan and is 100%-owned by Po Valley. The Company’s other Italian gas fields under development are Santa Maddalena, Sillaro and Vitalba (which is in the same licence area).

The Pandino reserves upgrade and the decision to move the project to development status have contributed to a 71% increase to 105.6 bcf in Po Valley’s total Proven and Probable (2P) gas reserves in Italy. The main impact has been at the Proven reserve level, with total group 1P reserves rising 150% to 25.3 bcf.

Michael Masterman, Chief Executive of Po Valley commented: “Our success at defining new reserves at Pandino is a clear demonstration of the capacity of Po Valley to significantly expand its reserve base in this historically prolific hydrocarbon province,”

“Pandino has been under intensive data collection and evaluation over the past 12 months as part of our strategy to build a strong gas business within Europe’s high paying and increasingly deregulated gas market,”

“The Pandino field (under ENI management in the 1950s) has already produced 5.13 bcf of gas. Our reserves upgrade resulting from a detailed review of historic production tests and log data on seven of the former ENI wells,”

“Two drill targets have been selected and Po Valley will immediately prepare and submit Environmental Impact assessment reviews to gain approval to drill Pandino”

Pandino has two main gas bearing levels — a 58 metre thick sand interval in an anticline structure in the Miocene at around 1875 metres, and prospective pinch-outs in the Pliocene at around 1,200 metres.

The field’s estimated Remaining Recoverable reserves are set out below: see attached PDF for table

The upgrade of Pandino to development status has enhanced Po Valley’s Proven and Probable reserves within its development fields, to: see attached PDF for table

Po Valley listed on the ASX only in December last year after a successful A$20 million capital raising.

The Company plans to drill an appraisal well on each of its Vitalba (east of Milan) and Sillaro (east of Bologna) fields — both 100% owned - in the coming June quarter. In addition, in conjunction with 50% joint venture partner and operator, Edison Gas S.p.A, Po Valley is progressing development work to bring the Santa Maddalena gas field north of Bologna, into production in the 2005 December quarter.

Hydrocarbon reserves have been estimated by Ecopetrol, the Consulting Geologist, using the definitions and guidelines of the SPE and WPC.

Michael Masterman                    Kevin Skinner
President & CEO                      Field Public Relations
Po Valley Energy                     (08) 8234 9555 / 0414 822 631
0417 851 303

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