Po Valley Energy Limited (ASX: PVE) (“Po Valley” or “the Company”) has published its Quarterly Activities Report for the period ended September 30th, 2024, exhibiting exceptional performance that surpasses previous quarters. The report also provides a detailed overview of the Company’s financial achievements during the quarter.
Po Valley Energy Limited is a significant natural gas-producing company in Southern Europe. Also, the Company is the first E&P player to introduce new production in the region after the Italian gas market was liberalised in 1998, breaking the ENI-Agip monopoly. Po Valley Energy’s Rome-based team has operated in Italy’s regulatory environment with expertise for two decades, guiding projects from exploration to production. Through the Po Valley Operations (PVO) subsidiary, the Company has secured essential licences, brought multiple fields online, and seen several assets thrive under a new operator.
Figure 1: Po Valley Energy Limited
Po Valley Energy: Gas-Tastic Quarter of Growth
Po Valley Energy has shown excellent improvement in results compared to previous quarters since December 2023. The quarterly production in December 2023 was 2.63 million standard cubic metres (scm), which grew almost 1.7 times to 4.42 million scm in September 2024 (on a net 63% share to PVE).
PM-1 Production: Consistency That Counts
Po Valley has shown resilience in the Podere Maiar Gas field (PM-1) by maintaining a steady gas production rate averaging ~80,000 scm/day, comfortably hitting its predicted levels. The quarterly production totalled an impressive 7.018 million scm of gas (on a 100% basis), generating revenue of €2.8 million (also on a 100% basis). With strong gas prices September 2024 quarter, the average weighted gas sales price rose to €0.39/scm, reflecting a solid increase over the previous quarter.
Figure 2: A Summary of the Production Data from PM-1 gas facility in the Selva Malvezzi Production Concession for the quarter
Broader Selva Development Program: Drilling Milestones in Motion
Po Valley has met key development milestones in its Broader Selva Development Program. By the end of September 2024, the Company filed four new drilling applications with the Ministry of Environment and Energy Security, all located within the Selva Malvezzi Production Concession. The Environmental Impact Studies will be submitted in the next quarter. After application submission, the Ministry will process the formal application assessment. On the geophysical front, preparation for the 3D survey acquisition in the Selva Malvezzi Production Concession is progressing nicely, with all environmental approvals secured. The seismic geophysical campaign is set to commence after receiving final sign-off from the region, expected following the regional elections in mid-November.
Teodorico Project: New Legislation Brings Regulatory Clarity
Po Valley received a boost from a new Environmental Decree, disclosed on October 21st, 2024, which provides enhanced regulatory certainty for its largest gas development project—Teodorico—situated in the shallow waters of the Northern Adriatic. Once this legislation is formalised in mid-December, along with the existing Energy Decree from 2023, it will further bolster Teodorico’s potential and value.
Corporate Highlights: Positive Cashflow and Steady Financials
Po Valley reported an operating cash flow of €1.2 million (net to PVE) for the quarter ending September 2024, with a typical one-month lag between revenue and cash receipts due to regular trading terms with BP Gas Marketing. The exploration expenditure for the quarter was €156k (net to PVE), leaving the Company with healthy cash reserves of €4,159,000 (~A$6,698k) as of September 30th, 2024.
Po Valley’s Projects Stealing the Show
The Company holds essential licenses in Italy, including Selva Malvezzi (Production Concession), Teodorico, Torre del Moro, Cadelbosco, and Grattasasso. Currently, the Company is focused on developing its onshore gas asset at Selva Malvezzi, with active gas production from the PM 1 well and further exploration underway at Selva North, South, East, and Riccardiana. The Company has two flagship projects to solidify its position as a major player in Italy’s natural gas market.
Selva Project (63% PVE)
The Selva Malvezzi Production Concession in the Po Plain of Emilia Romagna includes the PM-1 gas field. With a 63% stake, Po Valley Energy operates the field through its subsidiary, PVO. The Company holds net 2P reserves of 8.4 Bcf and a 2C resource of 8.9 Bcf in its Selva Malvezzi onshore gas asset. It manages a 1km export pipeline to the SNAM grid and advanced surface facilities like separation units and storage tanks. The gas is 99.5% biogenic methane, requiring minimal processing. A supply agreement with BP Gas Marketing was extended to 2025, while recent maintenance and slick line tests ensured uninterrupted production at ~80,000 scm/day.
Figure 3: Potential of the Selva Malvezzi Project
Teodorico Project (100% PVE)
The 100% owned Teodorico project in shallow Adriatic waters near Venice has a gas capacity of 300,000 scm/day. With Environmental Approval granted in 2021, the development plan envisions two wells with dual string completions and an unmanned tripod wellhead tied to Eni’s nearby Naomi Pandora platform. Gas will be processed and exported onshore through existing infrastructure. Teodorico holds 2P reserves of 37 Bcf and requires a Capex of €67.2 million, with current gas prices making it highly viable. PVE is evaluating options, including a potential joint venture or divestment.
Summary of the Tenements
Tenement | Location | Interest held | |||
PRODUCTION CONCESSIONS
| AWARDED | Selva Malvezzi(1)(2) | Italy, Emilia Romagna | 63% Po Valley 37% Prospex Group | |
PREL. AWARDED | Teodorico (d.40.AC-PY) | Italy, Adriatic Offshore | 100% Po Valley | ||
EXPLORATION PERMITS | GRANTED | AR94PY | Italy, Adriatic Offshore | 100% Po Valley | |
Cadelbosco di Sopra | Italy, Emilia Romagna | 100% Po Valley | |||
Grattasasso | Italy, Emilia Romagna | 100% Po Valley | |||
Torre del Moro | Italy, Emilia Romagna | 100% Po Valley |
Figure 4: Summary of the Tenements
Investor’s Outlook
Po Valley Energy Limited’s latest Quarterly Activities Report reveals impressive growth, with a 1.7 times increase in production and positive cash flow of €1.2 million. Steady production rates highlight the Company’s efficient PM-1 field management, and rising gas prices complement the growth trajectory. Ongoing developments in the Selva and Teodorico projects, alongside new regulatory clarity, position Po Valley as a substantial investment opportunity in Italy’s natural gas sector.
As of October 31st, 2024,
- The share price of Po Valley Energy was $0.039 per share, with a 52-week range of $0.027 – $0.050.
- The market capitalisation of the Company was $46.35 million.
- The Company had nearly 1,158.9 million shares on issue.
For more details, visit the company’s official website.