www.povalley.com
Po Valley Energy is a leading independent Oil and Gas enterprise growing rapidly from quiet, results-driven beginnings. The Company currently operates exclusively in northern Italy exploiting the large hydrocarbon system, and it is now a gas producer in the fast-growing Italian market as it brings its first 2 fields into production - with more to come. All of the Po Valley Energy's fields are in very close proximity to the pipeline grid and major consumers in the north of Italy.
Po Valley Energy Italian gas production rebounds by 95.8% in September quarter
Italy–resource focused Po Valley Energy (ASX:PVE) has achieved strong production and revenue from its north Italy gas fields during the 2010 September quarter, more than off-setting the unexpected decline of production from the Castello field during the June quarter.
The higher production in the September quarter reflected the first full quarter of production from the 100% owned Sillaro field.
Production comprised 8.92 million cubic metres (315 million cubic feet), up 95.8% on the preceding June quarter, with the Sillaro field contributing 8.59 million cubic metres (308 million cubic feet) and the Castello field, 336 thousand cubic metres (12 million cubic feet).
The Sillaro field averaged 94,500 cubic metres/day (3.3 million cubic feet/day) from its two production wells during the quarter with stable plant and pressure performance.
Production from the Sillaro gas field commenced during the June quarter after being brought on stream on the Pliocene PL2-A and PL2-E levels in the Sillaro-2 well on May 16.
The rate of production from the Sillaro field has been gradually increased since the successful commissioning of Sillaro-2. Following the completion of coil tubing work, the Sillaro-1 well also commenced production in mid-June on level PL2 C1/C2.
Castello produced at limited rates during the quarter while planning to proceed with a deviation of the well and Vitalba-1dirA continues as a priority. Vitalba-1dirA, will be deviated from the current Castello plant location and connected to the existing Castello plant to recommence production.
Po Valley plans to recommence production in the June quarter of 2011 and expects to produce at 50-70,000 cubic metres/day, subject to drilling success.
In another milestone for Po Valley, Sillaro passed the Bank of Scotland (BOS) 90 days completion test, result in the borrowing costs dropping from 300 basis points over EURLIBOR to 180 basis points. This represents a significant reduction in interest costs.
Revenue for the September quarter was approximately €2.43m (AUD$3.2m), reflecting the higher production. Gas prices remained on an average of €0.30 per cubic metre in the September quarter (USD11.3 per thousand cubic feet).
The company had €2.0m (AUD$2.9m) cash at bank at the end of the quarter and the drawing on the Bank of Scotland facility remained unchanged at €7.0m.
