Po Valley Energy (ASX: PVE) has taken a key step towards the award of a final production concession for its Bezzecca gas discovery in the Lombardy Region, Italy, after receiving formal approval of the Environmental Impact Assessment.
Bezzecca will be brought into production through the installation of a 7 kilometre pipeline to the company’s existing Castello gas plant.
Pipeline installation will commence immediately upon the award of the production concession with design and planning currently well advanced.
The pipeline is now estimated to cost in the order of €3.1 million (A$4.64 million) and will be funded through a combination of operating cash flow and the recently completed reservoir financing facility with Nedbank.
Bezzecca was discovered in 2009 with the Bezzecca-1 well flowing gas at a combined rate of 3.9 million cubic feet per day during testing.
Production will be sourced from the Pliocene and Miocene formations which are located at a depth of 2,000 metres.
The field has Proved and Probable Reserves of 4.2 billion cubic feet of gas.
Field activity on grant of the final production licence will primarily consist of construction of the 7 kilometre pipeline to connect Bezzecca with the Castello surface gas plant from which it will be produced through.
Bezzecca will be the company’s third producing gas field.
With formal approval of the Environmental Impact Assessment for its Bezzecca gas discovery, Po Valley Energy has secured a critical milestone towards the award of a final production concession.
The addition of a third producing field will significantly increase the company’s production given that its average daily production in 2013 was about 2.3 million standard cubic feet of gas while Bezzecca-1 had produced 3.9MMscf per day during testing.
There is a pipeline of other catalysts to look out for in the coming months.
These include further progress on the production concession application for the Graddiza-1 gas discovery as well as review and interpretation of new 3D seismic data acquired from Eni over the Vitalba West Prospect in the Cascina Castello production concession to finalise a well location and drilling program.
While a potentially smaller prospect, this is located only a short distance from the existing Vitalba gas production facility and within the current production concession licence area, offering potential to be tied in quickly in the event of a success.
With a market capitalisation of $14.69 million and a share price of $0.12, Po Valley is leveraged to further production and development news flow.
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