Po Valley Energy

Po Valley Energy is a leading independent Oil and Gas enterprise growing rapidly from quiet, results-driven beginnings. The Company currently operates exclusively in northern Italy exploiting the large hydrocarbon system, and it is on the verge of becoming a significant gas producer in the fast-growing and under-supplied Italian market as it brings its first fields into production - with more to come.

All of the Po Valley Energy's fields are in very close proximity to the pipeline grid and major consumers in the north of Italy.

Po Valley Energy, through its subsidiaries Northsun Italia S.p.A and Po Valley Operations Pty Ltd holds 11 licence areas, 2 of which, Sillaro and Castello, were awarded the production concessions in November 2008, and 130.4 bcf of 3P gas reserves. The Po Valley region, between the Alps and the Apennines, is the main gas production zone in Italy and has produced more gas than Australia's Northwest shelf. Italian gas prices are high by world standards, transportation costs are negligible and capital costs are very low resulting in highly attractive development economics. The Company Listed on the Australian Stock Exchange on 14 December 2004.

Having operated in Italy for 10 years the Company is experienced in Italy's regulatory process and has successfully managed each stage over a lengthy period. The Company's presence in Italy and local management team represents significant competitive advantage not enjoyed by newer entrants seeking to find success in the Italian market.

The Company has continued to grow its portfolio of assets at a very low cost relative to other oil and gas companies, providing the basis for future shareholder value creation. Italy remains an attractive market with gas and oil being of high quality, an accessible and low cost transportation network and a pricing environment that has been stable and higher than other comparable European countries.

Strategically, therefore, the Company is well positioned for accelerating and sustaining growth.

3 Production Developments
7 Gas field Discoveries for appraisal
17 Gas Exploration prospects
2 Oil prospects

Po Valley Energy has been very active on the gas field development front and in expanding the potential for future projects through new licence applications.

The Company started with 3 gas development fields, Sillaro, Castello (Vitalba) and S. Alberto (S. Maddalena), which are steadily heading into production, and are now followed by two larger scale appraisal projects (Bezzecca and Fantuzza), 10 new gas prospects and a further two oil prospects, one of which (Rovagnate) is very large scale.

The production, development and exploration projects identified to date in these licences are shown in the tables below:

Sillaro

Sillaro, in the Crocetta licence area east of Bologna, is the Company's largest natural gas field discovered to date. The field was originally explored by ENI between 1955 and 1982 with seven wells drilled in and around the structure. The field contains gas bearing zones in the Pliocene level at a depth of 2,100 metres. The deepe rMiocene level, at a depth of 2,500 metres, was previously drilled by ENI and found to have a gas bearing reservoir. [READ MORE]

Castello
Castello, east of Milan, is the first Company's gas field in commercial production. The field was drilled in 2005 at a location updip from the former ENI Agnadello well, which produced 13 billion cubic feet of gas (bcf) over a period of five years in the 1980s.

The Castello gas field was successfully tested by Po Valley in Vitalba #1 well over two gas bearing levels early in 2006. Flow rate testing of the two levels, San A1 and San A2, produced flows of 2.8 million cubic feet per day (mmcf/d) on a 1/4 " choke. [READ MORE]

S. Alberto
Sant' Alberto, north of Bologna, is the third field in the portfolio to progress towards commercial gas production.

Edison, the then operator, submitted the production concession application in July 2006.

In March 2008, Po Valley reached an agreement with Edison to take over operatorship of the field and move to 100% ownership. We plan to complete a new 2D seismic acquisition program in the second half of 2009, to improve field knowledge and support our production licence application. Our renewed focus on the field aims to achieve commercialization by the second half of 2010. 

Bezzecca

The Bezzecca #1 well, located within the Company's 100% owned Cascina San Pietro permit area east of Milan, is the Company's fourth appraisal well. Formerly called Pandino, the field was drilled in the 1950s by ENI and produced 5 bcf.

In 2006, 50 kilometres of seismic data were purchased and the Company completed a review of the size and structure of the Bezzecca field. [READ MORE]

Fantuzza
Fantuzza is a deeper structure of Sillaro; the well is located with the task to exploit a deeper Miocene structure. 50km of seismic data was purchased during 2006 and reviewed to confirm the size and structure of the Miocene target and a drill location has been selected. Fantuzza 1 will be the first Po Valley Energy well targeted to test this deeper structure which was previously successfully drilled and tested by ENI.

The Fantuzza 1 drilling program and environmental approval documentation has been submitted to the regulatory authorities and all the necessary casing, tubing and wellhead have been delivered to the Company during 2007. The well is expected to be drilled in the first half of 2009 to a depth of 2,600m.

New Prospects
In November, Po Valley was granted six year exploration licences for its La Prospera and Terra del Sole prospects near Bologna. The two new licences expand our portfolio of exploration licences to nine. Following extensive geological studies and seismic interpretation, we have defined three priority gas targets in the La Prospera licence - Gradizza, Pioppette and Capitello. The most advanced of these is the Gradizza prospect, a shallow (1,000 metre) anticlinal structure with a strong "bright spot" and good seismic definition. It contains estimated P50 potential resources of 7 bcf. Seismic reprocessing and further work is underway on the Pioppette and Capitello structures and on the Castrocaro prospect in Terra del Sole licence area. [READ MORE]

Board of Directors

Graham Bradley BA, LLB (Hons), LLM, FAICD - Chairman

Michael Masterman BEcHons - Managing Director and CEO

David McEvoy BSc, Grad Diploma (Appl. Geophysics)- Non Exec Director

Byron Pirola BSc, PhD - Non Executive Director

For information on Po Valley's Management please CLICK HERE

The Company had 110,179,926 ordinary shares allotted and quoted on the
Australian Stock Exchange ("ASX") as at 18 November 2009.