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Po Valley Energy Signs Gas Sales Contract With Shell

Po Valley Energy (ASX: PVE) has finalised a new gas offtake agreement with Shell Italia that is benchmarked to prices in Italy.

"We are very pleased to start a commercial relationship with Shell and welcome this opportunity in light of a number of future development projects both on and offshore Italy," managing director Giovanni Catalano said.

"The new contract represents an important stage in the Po Valley Energy's development as a gas producer as this is an opportune time to execute a gas sales contract with a major global customer."

Po Valley was last month awarded a new gas exploration licence - the 90 square kilometre Tozzona - in the Bologna and Ravenna provinces in northern Italy that contains the Santerno gas field that has produced about 35 billion cubic feet of gas to date.

The company has also restarted production from the main producing level at its Sillaro gas field, increasing gas production to about 2.65 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.

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