Po Valley Energy Limited (ASX:PVE) has been granted preliminary approval for its first planned gas production well at the onshore Selva Malvezzi field, northeast of Bologna in northern Italy.
Preliminary approval has been granted by the Italian Government and the company is targeting final Selva production approvals by the first half of next year.
It aims to complete the well and field connection pipe work with first gas targeted by late 2020.
“Key regulatory milestone”
Po Valley Energy’s chief executive officer Michael Masterman said: “The preliminary award of the Selva production licence is a key and major regulatory milestone in advancing our Selva project towards production.
“Receipt of the preliminary award furthers our strategy of securing exposure to the surging Italian domestic gas market where prices over 2018 rose more than 50% to about 30 euro per cubic metre (US$9.60/mcf).”
Selva is 63% owned by Po Valley, 20% by United Oil & Gas Plc and 17% by Prospex Oil & Gas.
Po Valley's licences in northern Italy
Once operational the company is targeting daily production of up to 5.3 mmscf from the C1 and C2 sand levels.
Methane content of 99.1%
Given its scale and proximity to the national gas grid, the development plan for Selva includes installation of an automated gas plant at the Podere Maiar 1dir well site, and a 1-kilometre connection to the grid.
The well has generated very high-quality gas, with methane content of 99.1% that is expected to further minimise processing costs.
“Critical transition fuel”
Masterman said: “Italy continues to have to import more than 90% of its gas consumption so new domestic contributors such as Selva build shareholder value and help deliver Italy’s push to use natural gas as a critical transition fuel towards a low carbon economy and with negligible environmental impacts.”
A previous Po Valley drilling program intersected two identified gas reservoirs, C1 and C2, with subsequent good flow rates and a 2C resource of 17 Bcf.
Subject to successful 3D seismic results from the upcoming program, additional wells may be drilled across the Selva gas field and nearby prospects in the exploration concession.
- Jessica Cummins