Italy's Oil & Gas Bill's Hidden Benefits
While Italy's act of national vandalism, the "Plan for Sustainable Energy Transition for Suitable Areas" Bill (the "Sustainable Energy Bill" or the "Bill"), has damaged its reputation as an oil and gas province, there may yet be silver linings for those that have invested money in exploration assets in country.
Perversely, given all that Cabot has invested in Po Valley and offshore Sicily, not to mention in the Adriatic, should these areas be ruled out for oil and gas exploration, then legitimately the Company will have recourse to litigate for the money that it's invested to that date.
This has been tacitly admitted by the Italian government in the initial drafting of the Bill, as passed by the Senate, but whether these provisions last review and voting by the Parliament is another matter.
Should it all be cleared in its current format and Cabot's areas be ruled unsuitable for exploration, then the Company would be entitled to all the money that it had spent, which we estimate across all areas to be in excess of €15mm.
As with everything Italian, nothing will move quickly, and the Company is still seeking to complete fundraising to meet its near-term cash needs.
For more information on the Company's current position and its planned fundraising please visit the Company's website (https://www.cabot-energy.com).