News & ASX Releases

Vitalba Drilling Approval and Rig Contract

April 18, 2011

Po Valley Energy Limited (ASX:PVE) is pleased to announce that Italian energy authorities have granted the final approval for the drilling of Vitalba-1dirA, the deviated well that is a critical step in the Company’s plans to recommence production at the Castello gas field and that the Company has now contracted the drilling rig required for the new well.

Following sudden pressure decline in the existing Castello well (Vitalba-1dir) in mid-2010, the gas field has been operating at limited production rates, specifically around 3,000 cubic metres per day. After a comprehensive geological review by the Company and its external advisors, it was concluded that the initial well location encountered an isolated gas reservoir, and that there was a good probability that commercial gas reserves could be accessed by a new well.

The plan for the new well was submitted to the Italian regulatory authorities for approval and authorisation was received in late March.

The Vitalba-1dirA well will be deviated from the current Castello gas plant location and connected to the existing production plant. Subject to drilling success, production is expected to recommence towards the end of the 3rd quarter 2011 or early in the 4th quarter if rig availability is slightly delayed.

The Company has signed a drilling contract with LP Drilling Srl, to secure the availability of their hydraulic drilling rig HH200. The rig is the same that was used to drill Bezzecca and Sillaro-2dir wells. The drilling operation is planned to start immediately after rig HH200’s current obligations are fulfilled.

Po Valley also announced that the 2D seismic acquisition campaign in the Sant’ Alberto and Podere Gallina permit areas north and northeast of Bologna, had been completed on schedule and on budget. The dataset has been forwarded to Geotrace Technologies Ltd in the United Kingdom for final processing.

Po Valley Energy’s Chief Executive Officer, Mr Giovanni Catalano:

“The securing of the rig contract to drill the Vitalba1dirA well is a critical step in our plan to bring the Castello gas field back into full commercial production. Assuming drilling success the new Vitalba well will allow us to access the remaining Castello field’s gas reserves, providing an important increase in the Company production and cashflows. What’s more, we are confident that, in light of the quality of the seismic data acquired, the validity of the Sant’Alberto and Cembalina projects will be further confirmed”.

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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