February 8, 2012
Valley Energy (ASX:PVE) is pleased to announce that gas production from
the Vitalba1dirA well, in its Cascina Castello concession, north of
Milan, has started today.
Production from the Pliocene SAN A2 sand level has commenced at a rate
of about 0.5 million standard cubic feet per day and it will gradually
increase to reach the target rate of 0.7 million standard cubic feet per
day. The Company is working on a static and dynamic model of the
Vitalba field which will incorporate the new production data and update
the proven and probable reserves.
Po Valley Energy is also pleased to report that no safety incidents
occurred during the workover drilling and reconnection to the gas
The Company also advises that production at its Sillaro field is still
impacted by the extreme weather conditions affecting Northern Italy and
production stands at 1.6 million standard cubic feet per day.
The Sillaro field normally produces from two separate wells, Sillaro 1
and Sillaro 2. Recently, the gas has been yielding minor quantities of
condensate, however, with the colder winter temperatures, condensate
production has increased.
As previously advised, production was halted for four days while excess
condensate was removed from the processing facility. Production has
since recommenced, initially from Sillaro 2 well which is currently
producing at 1.6 million standard cubic feet per day. As a precaution,
production from the Sillaro 1 well, where the condensate was believed to
originate, will be brought back into production gradually while the
situation is fully evaluated. As a result production from the Sillaro
field is expected to be between 1.6 million standard cubic feet per day
and 2.8 million standard cubic feet per day in the interim.
While the condensate levels are low, they may reach a level requiring
the installation of standard condensate processing equipment on site.
The necessity for this, cost and timing are currently being evaluated.
In the meantime the Company is carefully monitoring the situation in
order to meet its regulatory and environmental commitments while seeking
to maintain maximum production during this time of gas shortage.
“Restarting production at Vitalba was a key objective for Po Valley. The
temporary reduction of production from the Sillaro field is
disappointing, however, condensate management is a straightforward
operational issue and should not impact the long-term economics of the
field. While a temporary reduction in revenue is never welcomed, our
approach is appropriately cautious in order to properly address this
matter while maintaining our excellent operating record in Italy. The
Company’s Board and Management reiterate their commitment to focus on
unlocking the value of Po Valley’s asset portfolio via direct
development and identifying appropriate farm-out partners,” Po
Valley Energy CEO Giovanni Catalano said.
Po Valley Energy
+39 06 4201 62 75
Cannings Corporate Communications
+ 61 2 8284 9990
About Po Valley Energy
Po Valley Energy (ASX: PVE) is an oil and gas producer 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 square kilometers 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 www.povalley.com
Competent Person’s Statement
Information in this report that relates to Hydrocarbon Reserves and or
Resources is based on information compiled by Mr Giovanni Catalano, CEO
of Po Valley Energy who have consented to the inclusion of that
information in the form and context in which it appears. Mr Catalano has
over 32 years experience in Exploration and Development in the Oil and
Gas Industry. He is member of SEAPEX and AAPG and holds a masters degree
in Geology from the University of Ferrara.
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