The Sillaro field is located in the province of Bologna and was originally explored by ENI between 1955 and 1982 with seven wells drilled in and around the structure. The field contains gas bearing zones in the Pliocene level at a depth of 2,100 metres. The deeper Miocene level, at a depth of 2,500 metres, was previously drilled by ENI and found to have a gas bearing reservoir.

In July 2009, the Company drilled a second well (Sillaro-2dir) intersecting the Pliocene gas reservoirs designed to produce from multiple levels and to increase overall flow rates and optimise total field recovery.

Since production commenced in 2010, Sillaro has proved a strong revenue and cash flow generator for the Company, generating over EUR 30 million in revenue and EUR 23 million in operating cashflow.

Production started to decline in late 2014 and an in-depth technical and reservoir review identified and prioritised two core initiatives to increase production, revenue and profitability.

The work plan involves two phases:

Phase 1 - Recomplete Sillaro-2 to increase production to ~ 50,000scm/day

Phase 2 - Re-drill and side track the Sillaro-1 well to access the Miocene levels which is expected to increase production rates to ~ 80-90,000scm/day

Financing for the above is envisioned through the combination of a farm-out and equity. The Company is targeting to progress these initiatives in 2H2015 and 1H2016.

In the meantime, rigless interventions and further studies on the reservoir have been carried out internally resulting in a significant increase to current production which is currently averaging ~ 35,000scm/day.