Po Valley Energy (PVE) has signed a gas sales contract with BP Gas Marketing — a subsidiary of BP International — for 37 million standard cubic metres of gas over 18 months, a deal that’s expected to deliver significant revenues to the company in its first year.
The gas will be supplied from its Podere Maiar-1 onshore facility in the Selva Malvezzi production concession, located in the Po Valley region of Italy, which is due to be start production in April.
Po Valley Energy chair Kevin Bailey said it was a major milestone for the company.
“To be able to negotiate a gas sales agreement with a company of the calibre of BP is a real endorsement of the work we have been doing for many years — it’s come to fruition,” Mr Bailey said.
“We’re confident it’s going to produce literally millions of dollars in revenue for us to take forward our plans for developing several other wells that are look-alikes: North Selva, South Selva, East Selva, Riccadina…
“We’ve got some tremendous opportunities ahead of us and are fully funded for this first Podere Maiar-1 well which is going to be completed in April, which is just weeks away.”
Under the sales agreement, the gas supply price will be linked to Italy’s ‘Heren PSV day ahead mid’ fluctuating price assessment.
“Our joint venture will be providing gas to BP Gas Marketing for 18 months with the option for that to continue beyond September 2024.”
Meanwhile, works in northern Italy are progressing rapidly with the main electric generator, compressors, dryers, filters, a nitrogen storage tank and other major equipment and components on site and being installed.
Po Valley Operations (a wholly owned subsidiary of Po Valley Energy) is the operator of the Selva Malvezzi production concession with 100 per cent ownership interest, scaling down to 63 per cent. Notices to transfer joint venture partner quotas to Prospex Energy’s two subsidiaries UOG Italia (20 per cent) and PXOG Marshall (17 per cent) were sent to the Italian Ministry in November.
PVE shares closed at 9 cents each on Tuesday.