Reabold Resources PLC (AIM:RBD) co-chief executive Sachin Oza told investors the company is encouraged by support in Italy as it acquires the onshore Colle Santo gas field.
The small-cap energy firm in May announced a deal to acquire a 16.2% equity interest in LNEnergy, which in turn owns 90% of the Colle Santo gas field.
Today, in a statement, Reabold noted the receipt of a letter from the head of the Italian National Bureau of Hydrocarbons and Georesources (UNMIG) giving permission to carry out well integrity and well service testing on the two existing wells and to start work on the installation and commissioning of the monitoring network.
It is described as "a positive indication of support" for the development of the Colle Santo gas field.
"It is encouraging to note the favourable indication from UNMIG that early work on testing and monitoring can begin at the Colle Santo gas field,” Oza said.
“Our focus now turns to finalising this stage of the approvals process with a view to commencing operations later this year once all necessary permits are in place.
“We look forward to updating our shareholders with further progress on the project throughout the year."
The next stage is to receive a formal decree from the Italian Ministry of Environment and Energy Security to conduct the work, Reabold noted.
LNEnergy is seeking a two-year, long-term production test permit which would significantly de-risk the full concession permit approval to allow for more than 20 years of production, and a decision is due before the end of 2023.