Reabold Resources PLC (AIM:RBD) told investors that its Colle Santo gas project in Italy has entered an operational phase, aiming to deliver "early production".
It is presently focused on advancing the project through the regulatory and national approval process in Italy.
Early production is envisaged over a 24-month period, with produced gas used for conversion to power for sale into the electricity grid.
The company said it is expecting a formal decree from the Abruzzo region’s authorities to be granted "over the coming months".
Much of the equipment that is needed for electricity generation is available locally and can be provided on a rental basis, which will minimise the capital required, it said in a statement.
"We are pleased with the speed and efficiency of the regulatory process in the Abruzzo Region to date and delighted to reach this stage of the early production programme,” said co-chief executive Stephen Williams.
“We can see a clear pathway to generating revenue from gas to power in the near term, and we believe this news considerably de-risks the granting of the full concession to LNEnergy and the small scale LNG project.
“Italy needs domestic energy supply to keep prices lower.
“We look forward to updating shareholders with further progress on the Colle Santo development."
Reabold acquired its interest in the Colle Santo project via its deals in May and June, to acquire a 16.2% equity stake in LNEnergy, which in turn owns 90% of Colle Santo.
Colle Santo is deemed a "development-ready" field by Reabold – which highlighted that it believes the field has potential to generate an estimated €11-12 million of post-tax free cash flow per year.