Po Valley Secures A$34 Million in Financing

Po Valley Energy has secured a finance facility of A$34 million from the Bank of Scotland. The funding ensures that Po Valley Energy has all the necessary financing available to bring its maiden production on stream before the middle of next year.

The two-part finance facility comprises an initial A$8 million for Po Valley to access prior to final development approval from Italian Government authorities for its production start-up from fields in Italy's far north.

Up to A$34 million Senior Debt facility will be available once Po Valley Energy receives its formal production concession; drawdown will be subject to satisfying the terms of the facility.

Final approvals for the low capital cost production fields for the Castello and Sillaro projects (Euro 6 Million for surface plant), by the Italian Ministry, are expected in March next year.

Intial drawdown of funds will be used to finance the construction program for both the Castello and Sillaro projects and the drilling costs of the Sillaro 2 production well, Bezzecca and Fantuzza fields in 2008.

Po Valley's Chief Executive Officer, Michael Masterman, said: "Bank of Scotland has a proven track record of lending to the oil and gas sector and has recognized the potential of our development projects in Italy".

"The Bank has recognized the quality of our gas reservoirs in the Castello and Sillaro fields. We look forward to working with the Bank in bringing Po Valley Energy's gas reserves to market from its first production fields during 2008."

Michael Thorpe, Lead Director in Bank of Scotland's Oil & Gas team, said" "When we look at the gas economics of the Italian market and the quality of the assets held by Po Valley Energy in this region, we are comfortable in financing the development of the various projects in this strong market environment."