Cabot Energy plc (LON:CAB) told investors that it will use a new moratorium on Italian exploration activities as an opportunity to evaluate its future strategy in the country.
Italy earlier this week introduced a pause of up to 18 months on all work on oil and gas exploration permits or applications to allow a review as part of the ‘Plan for Sustainable Energy Transition of Suitable Areas’ (PTESAI) bill.
It aims to reach consensus, politically, over the country’s approach to onshore and offshore oil and gas activities, and, if a consensus is not reached within a total of 24 months the moratorium will be lifted.
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“This new legislation is not a ban on exploration. It allows the Italian government to reappraise the exploration licences it has granted,” said Scott Aitken, Cabot chief executive.
“Cabot Energy will ensure the company is prepared to rapidly progress our licences as soon as the review is completed, whenever that occurs within the next 18 months.”
The company, in a statement, highlighted that the new Italian legislation makes allowance for compensation for companies that are impacted. It could, if necessary, seek compensation for all exploration costs up to the withdrawal date.
Aitken added: “Cabot Energy's focus remains the funding of a scalable and repeatable development drilling programme in Canada.
“Our Canadian assets have shown great promise with an annual increase of 26% in gross net proven plus probable reserves to 3.6 mmboe as well as a 339% increase in gross reserves and resources of the Canadian asset to 42.2 mmboe.
“We will continue to work with the authorities in Italy and remain hopeful of either securing a positive outcome for our exploration licences or receiving appropriate compensation at the end of the two-year assessment period."
