Po Valley Seeking Additional Acreage in Northern Italy

Po Valley Energy Limited is seeking additional exploration acreage in northern Italy as the company readies for its first commercial production from the province by early next year.

Details of eight new exploration license applications over new gas targets were outline by Po Valley's Chairman, Mr. Graham Bradley at the company's annual general meeting in Sydney.

The license areas are in and around Po Valley's existing project areas where the company made several commercial gas discoveries from successfully drilling in 2004 and 2005 near Bologna and Milan.

"Three of the best applications are for uncontested areas, and hosting what Po Valley believes are attractive gas exploration targets," Mr. Bradley said.

"The Proposed expansion of our Italian exploration assets is timely, as the likely final grant of the first licenses, will coincide with our pending gas production in the first half of 2007" he said.

"If approved, all eight licenses should be granted progressively through 2007, assisting Po Valley to build on our successful exploration drilling programs in northern Italy in 2004-2005.

Our focus remains northern Italy – we know the geology and regulatory processes applying to the province.

"Acquisition by application for the region is very cost effective and if at least 3 – 4 applications are approved, I am confident that Po Valley will find its next generation of successful gas field discoveries on this expanded acreage opportunity."

Mr. Bradley said the license applications submitted to the Italian Ministry, covered an areas of 2,005 square kilometers or almost twice Po Valley's current licenses area. There is extensive seismic and well data that can be used as the base for geological investigations which are underway.

"In the three uncontested applications, Opera, La Prospera, and La Risorta, there is more than on target of potential gas development," he said.

La Prospera and Las Risorta are located in the eastern part of northern Italy near Po Valley's successful Sillaro development field. Four targets have been identified in these two licenses with geological and geophysical studies underway.

Opera is located south of Milan and Po Valley's successful Vitalba gasfield and has two target fields.

The applications are expected to be reviewed by mid year by Italy's Hydrocarbon Commission followed by environmental clearance reviews prior to full granting of the licenses.

"Five of the eight applications have competing bids. This may present an opportunity to work with other competing applicants in joint venturing, and discussion towards this end have commenced with a number of bidders," Mr. Bradley said.