May 15, 2015
Po Valley (ASX:PVE) the Italian based oil & gas exploration,
development and production company has completed its resource and
technical review of the Sillaro gas field and has defined its 2015-2016
work programme to increase production and cash flow from this asset.
Sillaro has been a strong revenue and cashflow generator for PVE since
production commenced in 2010 generating over EUR 30 million in revenue
and EUR 23 million in operating cashflow. Production declined in 2014
and an in-depth technical and reservoir review has identified and
prioritised two core initiatives to increase production, revenue and
The work plan involves two phases:
- Phase 1 - Recomplete Sillaro-2 to increase production to around 50,000scm/day
- Phase 2 - Redrill Sillaro-1 well with a side track to access the
Miocene levels which is expected to increase production rates to
Financing for the above will be achieved through a combination of a
farm-out, equity and potentially additional drawings on the existing
Nedbank EUR 20 million facility (current drawn to EUR 3 million).
The Company is targeting to progress these projects in the second half of 2015 and the first half of 2016.
The first initiative will be to pull out the completion in Sillaro 2 and
recomplete the well in the Pliocene levels with commercially attractive
remaining recoverable reserves. These reserves are estimated at
approximately 2 bcf1 and primarily in the C1 production level and in
level E and D which we expect to be new production levels. The capital
cost for the recompletion is estimated at EUR 1.8 million and, if
successful, is projected to generate EUR 4.5 million per annum in
revenue and EUR 4 million in operating cashflow in the first full year
of production in 2016.
Given the low capital cost and high return a priority will be to
recomplete the well in the September Quarter 2015 with the work planned
to take approximately 20 days.
The second initiative is to redrill the Sillaro 1 well to access the
deeper Miocene reservoir at 2475m. This redrill will also add an
additional depletion point for the overlying developed Pliocene
reservoirs and should facilitate increased ultimate recovery from those
zones. This investment offers good prospective returns. The Sillaro-1
sidetrack is expected to increase production rates by a further 40,000
standard cubic metres per day at an estimated capital cost of EUR 4.1
The Sillaro production expansion coupled with the Company’s planned
development of its Bezzecca gas field are expected to be funded
primarily from a third party farm-in. Discussions with potential farm-in
partners are progressing.
Commenting on the developments, Sara Edmonson, Acting CEO
“The work program at Sillaro combined with the development of Bezzecca
are expected to materially improve revenue and earnings for Po Valley in
2016. The revised strategy will transform these two assets, with the
main funding sourced from farm-in contributions.”
Estimates of recoverable volumes at Sillaro (including the Pliocene and
Miocene reservoirs) were announced to the market on 9 January 2015 at
A recent investor presentation was released to the market on the ASX on 13 May 2015.
Po Valley Energy
+39 06 4201 62 75
Qualified petroleum reserves and resources evaluator:
The information in this announcement that relates to Hydrocarbon
Resources is based on, and fairly represents, information and supporting
documentation prepared under the supervision of the Qualified Petroleum
Reserves and Resources Evaluator, Mr. Greg Short. Mr Short is a
Non-Executive Director of Po Valley Energy Limited, a geologist with
over 40 years of oil and gas industry experience and a member of AAPG.
He has consented to the form and context in which the Reserves and the
supporting information are presented in this announcement.
About Po Valley Energy:
Po Valley Energy (ASX: PVE) is an oil and gas production and exploration
company listed on the Australian Stock Exchange. It has an expanding
portfolio of hydrocarbon assets in northern Italy. Po Valley holds 11
license areas, encompassing 2,000 km2 and owns and operates two gas
treatment plants. The Po Valley region is the main gas production zone
in Italy. The Company’s web site is http://www.povalley.com
1. Please refer to the ASX announcement “Sillaro Field Reserves Revision and Production Forecast”
lodged on 9 January 2015 and to the Company’s 2014 Annual Report lodged
on 14 April 2015 for full details of the Company’s reserves and
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