News & ASX Releases

Expansion Into Offshore Adriatic Gas Province

July 16, 2008

Emerging Australian gas producer, Po Valley Energy, has been awarded its first offshore oil and gas licence in one of the key petroleum provinces servicing Europe’s energy demands.

In a major expansion from its current onshore-based Italian gas portfolio, Po Valley (ASX: “PVE”) has won a competitive preliminary award by Italy’s Ministry of Economic Development for a 526 km² exploration licence AR168PY (“Azzurra”) in the Adriatic Sea off Italy’s east coast.

The close-to-shore and previously drilled acreage is southeast of and on the same trend as Po Valley’s gas fields stretching between Milan, Modena and Bologna. It is from this area that the Company’s first output is expected by early next year from production plant and grid connection infrastructure currently under construction.

“The Adriatic Sea is a natural geological extension of our existing onshore oil and gas assets,” Po Valley Energy’s Chief Executive Officer, Mr Michael Masterman, said. “This area remains highly productive, producing over 350 million cubic feet per day and the largest producer, Italian energy giant, ENI now produces in excess of five times more gas from it offshore Adriatic fields that its onshore Po Valley fields.”

Prior to the industry deregulation of recent times, the province was the exclusive domain of ENI. “Under this award, the offshore block is a major step-up for Po Valley’s gas exploration and production potential, as well as confirmation of the high regard in which the Company is increasingly being held in Italy’s fast-growing natural gas sector.” Mr Masterman said.

The shallow offshore licence — AR 168 PY (“Azzurra”) — lies in 30 metres of water, adjacent to the large Agostino and Porto Garibaldi gas fields. The area has extensive 3D seismic coverage. ENI successfully drilled and tested positive gas flows in separate wells, Azzurra-1, Ginevra-1dir, Irma-1 and Carola-1.

“While historic low energy prices meant ENI did not develop the fields in the early 1990s, we are confident that subject to successful appraisal, a number of these prospects could be expected to become significant commercial gas developments. The former ENI wells are also only 10-20 kilometres from existing pipeline connection points and with relatively short drilling times and significant production infrastructure, any new development wells could be brought onstream in short timeframes.” Mr Masterman said.

Po Valley is currently undertaking environmental clearance studies ahead of the full granting of the offshore licence and is initiating the purchase and review of existing seismic, well log and test data.

In a separate development, the Company has also received environmental approval to proceed with drilling its Bezzecca gas target, east of Milan, with the Bezzecca-1 well spud scheduled for November.

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

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