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Po Valley On Track For Solid Cash Flow, Higher Italian Gas Production

Po Valley Energy (ASX: PVE) expects to maintain its solid cash flows while increasing production at its Sillaro gas field in northern Italy for the rest of 2013.

Speaking to shareholders, chairman Graham Bradley added the company also expected to secure funding for production facilities at Bezzecca and Sant' Alberto when these prospects secure final approval.

"A major priority will be to find farm-in partners to help progress a number of our highly prospective assets towards development," he added.

Po Valley has already secured two partners Petrorep Italiana and Aleanna Resources for the La Prospera licence.

These have farmed into three wells that the company plans to drill in the 2013/2014 period, the first of which is the Gradizza-1 that is expected to spud in June 2013.

Bradley also noted the €20 million reserve based lending (NYSEARCA:RBL) facility with South Africa's Nedbank Group to replace its facility with Lloyds Bank was a positive for the company.

"Securing this facility in the currently constrained European banking market was a real vote of confidence on the part of NedBank in the company's prospects as well as our sound track record as a borrower."

Po Valley is currently waiting on final approval from Italy's Ministry of Economic Development (UNMIG) to restart production from the main producing level at its Sillaro gas field, where gas production will be boosted to 2.4 million cubic feet per day, up from the average production of 1.7MMcfd it recorded from the field in the March 2013 quarter.

It has identified a new low risk gas prospect at the Podere Gallina licence, where the Selva gas field produced 83 Bcf from 15 wells over a 35-year period and has found a new prospect in the Cascina Castello production concession, which is estimated to hold a 2C prospective resource of 2.4 Bcf of gas.

There is also a high potential for gas discoveries within the AR94PY offshore permit, which is estimated to have a combined 2C contingent resource of 47.3 Bcf.

AR94PY is located in the shallow waters of the Adriatic Sea and contains two connected gas discoveries, Carola and Irma, which were previously drilled and tested by Italy's Eni.

Revenue for the March quarter was €1.6 million (A$2.1 million). Cash at bank at the end of the quarter amounted to €1.32 million.

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