Po Valley Energy (ASX:PVE) is on track towards adding a fourth producing gas field to its portfolio with the award of a preliminary production concession for the Sant'Alberto gas field in northern Italy.
Sant'Alberto has Best Estimate (2C) Contingent Resources of 2.1 billion cubic feet of gas.
The company will now submit the Environmental Impact Assessment to the Emilia Romagna Region, the last step towards the full grant of the production concession.
"The long awaited preliminary award of the Production Concession marks the achievement of an important regulatory hurdle in the process toward our fourth producing gas field," acting chief executive officer Sara Edmonson said.
"Planned development for the Sant'Alberto field envisions a small modular plant and a simple connection to the national grid which is some 200 meters away."
Sant'Alberto is located in the north of Bologna and Edison, the previous partner and operator, submitted the production concession application in July 2006.
Po Valley reached an agreement to acquire the licence from Edison in March 2008.
It contains the Santa Maddalena-1 well, which had produced gas at a rate of 1.8 million cubic feet of gas per day during testing. The field has 2C Contingent Resources of 2.1Bcf of gas.
The company had previously noted that it would evaluate the feasibility of a second well in the eastern portion of Block-5, based on the production behaviour of the Santa Maddalena1dir well, as well as new seismic reinterpretation of the area.
Funding for Sant'Alberto and the Bezzecca production well comes from the company's €20 million Reserve Based Lending facility with the Nedbank Group.
Italian Gas Fields
Po Valley received the Environmental Impact Assessment approval for the Bezzecca gas field in early 2014 from the Lombardy Region and is currently in the final approvals stage with two formal signoffs remaining.
Upon formal granting of the Production Concessions by the Italian Ministry of Economic Development, subsequent approval by the Ministry office in Bologna of the formal Development Plan is required.
It is expected that the award of the concession will follow in the third quarter of 2014 with pipeline installation commencing shortly thereafter.
In early 2014, the company finalised the engineering and design of the pipeline and related surface facilities. It has commenced the bid process for the construction and installation of the pipeline to connect the field with the Vitalba plant.
The award of the preliminary concession for the Sant'Alberto gas field sets the stage for Po Valley Energy to add a fourth gas production field in Italy.
With the final approval underway for Bezzecca, the company is well on its way towards substantially increasing its gas production.
The company had produced 5.66 million standard cubic metres of gas in the March 2014 quarter, generating revenue of $1.85 million.
It had $1.25 million in cash as of 31 March 2014.
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