Po Valley Receives Government Approval For Its First Planned Production Well

  • Jan 15, 2019 AEDT
  • Team Kalkine
Po Valley Receives Government Approval For Its First Planned Production Well

On 15 January 2019, Po Valley Energy Limited (ASX: PVE) has announced that the Italian Government has granted preliminary approval for their first planned production well. It is located at its onshore Selva Malvezzi field, in the Bologna region in northern Italy.

Po Valley has a stake of 63% in Selva, however United Oil & Gas Plc owns the remainder 20%, and Prospex Oil & Gas owns another 17%. The field historically produced significant Eni S.p.A, producing 2,380MMscm (84 Bcf) from 24 wells between 1956 and 1984. The Selva field is located within less than one kilometer from the country’s national gas grid.

The company is targeting to achieve the final Selva production approvals by the first half of next year. It also seeks to complete the well and related field connection pipework with a target production of first gas by late in CY20.

The Chief Executive Officer of the company, Mr. Michael Masterman, said that the preliminary award of the Selva production license is a key and major regulatory milestone for the company for the advancement of the Selva project towards production. The receipt of the preliminary award helps to promote the strategy of the company to secure exposure to the surging Italian domestic gas market. The prices of the gas, however, rose more than 50% in CY18 to Euro 0.30/cm.

Italy has to import more than 90% of its gas consumption. Hence new domestic contributors such as Selva build shareholder value and helps in boosting the use of natural gas as a critical transition fuel towards a low carbon economy and with minimum impacts on the environment.

The development plan for Selva includes installation of an automated gas plant at the existing Podere Maiar, well site and then a 1km connection to Italy's national gas grid.

The well has generated very high-quality gas with a methane content of 99.1%. This might help in further minimizing the processing costs. Once, the commencement of the operation starts, the Company is targeting production of up to 5.3 mmscf/day from the C1 and C2 sand levels.

Now, let us quickly look at the performance of Po Valley Energy Limited’s stock and the return it has posted over the last few months. The stock last traded at $0.040, with a market capitalization of ~$24.47 million. It is trading at a PE multiple of 4.55x. It has a negative YTD return of 4.76%, also posted negative returns of 2.44%, 6.98% and 4.76 % over the period of last six months, three months and one month, respectively. It has a 52-week high price of $0.110 and a 52-week low of $0.031, with an average volume of 153,698.


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