Coro Energy PLC (AIM:CORO) is relaunching its Italian gas portfolio amidst higher gas prices, following the termination of a sale agreement last week.
The company, in a statement, told investors that Italian gas prices are up around 700% over the past twelve months, and, it now expects to generate over €5mln of free cash flow per year from the assets – once the Sillaro field is brought back into production later this month.
It noted that cash flow from Italy will support the company’s renewable energy growth plans in South East Asia.
"I am delighted to report that recent market changes have provided a clear opportunity for the re-spawning of our Italian portfolio with a view to providing solid near-term cash flows to support our South East Asian growth strategy," said chief executive Mark Hood.
Coro’s Italian portfolio spans six production concessions, presently led by the Rapagnano operation which is yielding around 6,000 cubic metres of gas per day. Sillaro is due to add some 18,000 cubic metres per day.
The company said that gas is expected to play a vital transitional role as Europe transitions to a low carbon economy, and, gas prices are projected to remain strong for the foreseeable future.
It plans to carry out a number of low-risk operations over the course of 2022 to further boost production – including a potential producing zone reperforation at Rapagnano, a possible recompletion of a well at the Casa Tiberi field, and initial development work at the Sant' Alberto concession (where historic test rates were measured above 75,000 cubic metres per day.
Additionally, Coro noted that it will take the opportunity to establish and fund out of cash flows, an independent Italian abandonment fund, which over time will cover future Italian abandonment liabilities.