March 18, 2008
A major oil and condensate exploration target and a gas development field in northern Italy will be developed under an agreement announced today between Italian energy leader, Edison and Australia’s ASX-listed emerging gas producer, Po Valley Limited (ASX code “PVE”). Under the agreement, Edison and Po Valley will now jointly develop on a 50:50 basis, the prospective Ossola exploration licence north of Milan and to the west of Bergamo, which is expected to contain a very large-scale oil and condensate target with additional potential for a gas target.
This joint venture arrangement is subject to the granting of the final licence by the Ministry of Economic Development. Po Valley will retain operatorship until the spud of the first exploration well, after which time operatorship will pass to Edison.
Edison — the second largest gas and electricity company in Italy — is presently operator in a joint venture with Po Valley for the San Vincenzo licence area and Sant’Alberto gas field, north of Bologna.
Under the agreement announced today, Edison will move from its previous 50% joint venture interest to a royalty entitlement of 3.75% on hydrocarbons production from the Sant’ Alberto field and San Vincenzo licence. Po Valley in turn will move from its 50% interest to full ownership (100%) of the San Vincenzo licence and the Sant’ Alberto field as well as operatorship of this area.
Rights to the Ossola licence had been in dispute between Po Valley and Edison with Edison originally challenging a decision in October 2006 by the Italian Ministry to preliminary award the licence to Po Valley. During this time Po Valley has obtained the Environmental Clearance from the Regione Lombardia Authority and has already proceeded with a regional, large scale geological study. Po Valley has purchased more than 50 km of 2D seismic dataset.
“The agreements announced today close out the dispute and pave the way for an accelerated and decisive exploration campaign targeting the large-scale oil and condensate and gas targets in Ossola,” Po Valley’s Chief Executive Officer, Mr Michael Masterman, said today. “The agreements generate considerable upside for both Edison and Po Valley while significantly adding to Po Valley’s expanding footprint of gas and oil exploration, development and production plays in northern Italy.”
Po Valley is currently constructing surface plant in gearing up for first gas production from its Castello and Sillaro gas fields near Milan and Bologna respectively in northern Italy.
Michael Masterman Po Valley Energy 0417 851 303
Kevin Skinner Field Public Relations (08) 8234 9555 / 0414 822 631
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