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Stable gas production and increased revenues for Po Valley's 1Q 2011

April 14, 2011

Po Valley Energy Limited (ASX: “PVE”) started 2011 with stable gas production and strong revenue generation during the first quarter.

Starting from October 1, 2010 the Company entered into its first gas thermal year (from 1 October 2010 to 30 September 2011) with a committed daily gas production rate of 85,000 scbm/day.

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The 2011 March quarter production amounted to 7.78 million cubic metres (275 million cubic feet), with Sillaro field contributing 7.50 million cubic metres (265 million cubic feet) and Castello field 280 thousand cubic metres (10 million cubic feet).

Gas prices during the March quarter increased slightly to an average of €0.31 per cubic metre (USD11.86 per thousand cubic feet). Revenue for 1Q 2011 was approximately €2.2m (AUD$3.1m), an increase of 8% compared to 4Q 2010.

To date Po Valley’s total gas production amounts to 34.56 million cubic metres (1.2 billion cubic feet), which can be split as follows: Sillaro field contributed 25.99 million cubic metres (918 million cubic feet) while Castello field contributed 8.56 million cubic metres (302 million cubic feet).
Sillaro production averaged 83,200 cubic metres/day (2.9 million cubic feet/day) during the quarter with stable plant and reservoir pressure performance.

Additionally, the gas production from one of the three producing strings has exceeded our performance expectations. Specifically, the amount of gas originally estimated for the short string E of Sillaro 2dir well has already reached the total predicted recoverable volume nonetheless it is still producing at operating rates. For this reason and in order to better evaluate the potential upside reserves of the field, a bottom hole pressure test is planned for July 2011.



During the quarter Castello was still producing at limited rates while plans were advanced to proceed with a deviation of the well — Vitalba-1dirA. Vitalba-1dirA well will be deviated from the current Castello plant location and connected to the existing Castello plant to recommence production.

Comment by Po Valley Chief Executive Officer, Mr. Giovanni Catalano:

“I am pleased to report that the steady production performance of PVE’s fields has continued and that the gas production from one of the three producing strings at Sillaro field has exceeded our performance expectations. Revenues for the quarter increased compared to 4Q 2010 due to a slightly higher gas price. Moreover, the Company has achieved additional improvements related to operating efficiencies, namely the operating netback for the Sillaro field which has reached 90%.”

MEDIA CONTACTS:

Giovanni Catalano
Po Valley Energy
+39 06 42 01 26 675

Kevin Skinner
Field Public Relations
(08) 8234 9555 / 0414 822 631

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