Po Valley Announces Quarterly Activities Report for the Period Ended 30 June 2023

Source: www.gulfoilandgas.com 7/27/2023, Location: Europe

Highlights

Selva Malvezzi
• Gas production commenced at Podere Maiar-1 (PM-1) site in Italy, delivering first gas on 4 July 2023
• Initial ramp-up is progressing in accordance with production and commissioning plans
• First gas will provide Po Valley Energy with its maiden revenue from the Selva Malvezzi Production Concession
• PM-1 is supplying the gas to BP Gas Marketing under an 18-month supply agreement. Next steps
• PVE intends to advance other projects within the Selva Malvezzi Production Concession Corporate
• €757,000 recovered from SNAM Performance Bonds (63% to PVO €476,910)
• Cash at 30 June 2023 €939k (A$1,539k)

Australia's Po Valley Energy Limited ("Po Valley" or "The Company") is pleased to provide its Quarterly Activities Report for the period ending 30 June 2023, covering the Company's gas exploration, development and production outcomes across its onshore and offshore assets in northern Italy.

Selva Malvezzi
Selva is an onshore natural gas field in the eastern part of the Po Plain, among the Ferrara and Bologna provinces, in the Emilia Romagna Region. The production concession measures 80.68 sq km and is the former Podere Gallina Exploration Permit which is now reclassified as a production concession.

Podere Maiar gas plant and pipeline construction
On 4 July 2023, Po Valley commenced gas production at its 63 % owned Podere Maiar – 1 (PM-1) gas facility in the Selva Malvezzi Production Concession, located in the Po Valley plains of northern Italy. PM1 is supplying the gas to BP Gas Marketing under an 18-month gas supply agreement (refer to ASX Announcement dated 14 February 2023).

First gas delivery was achieved following the successful sign-off from UNMIG and Italy’s Fire Department in the June 2023 quarter, ensuring compliance with all necessary safety and operational requirements.

Subsequently, the company received full approval from the Ministry and final authorisation for gas production to commence at PM-1.

Construction and grid connection of PM-1 to the Italian national pipeline grid operated by SNAM (Società Nazionale Metanodotti / National Pipeline Company) took place in May 2023 with all activities completed on schedule and within 3% of budget.

As part of the gas production ramp-up process, Po Valley will actively monitor production in order to determine the optimal flow rate and ensure sustainable production levels from the PM-1 well. By settling on a sustainable flow rate, Po Valley aims to maximise the production potential of the PM-1 reserves.

Initial ramp-up is progressing in accordance with production and commissioning plans which is very pleasing. Once the ramp-up programme is complete, the Company will make further announcements on this process and future production.

The Selva Malvezzi Concession is the key area of focus for the Company and we are assessing the next stages of development including drilling programmes at Selva North, South and East and a potential seismic programme at the Riccardina prospect. The Company will provide further clarity on these programmes as they are developed and stakeholder approval milestones are progressed.

Other Assets
The Company is also assessing how best to realise value from its 100%-owned Teodorico (AR94PY) offshore asset, either via a joint venture or sale. In addition, the company is reviewing optimal development paths for its residual assets (Cadelbosco di Sopra, Grattasasso and Torre del Moro) including the potential for introduction of third party investors/ partners who have interest in participating in their development. Cadelbosco di Sopra and Grattasasso are shallow gas opportunities which fit neatly within the Company’s proven exploration and development capabilities whilst Torre del Moro is a large deep gas prospect.

Corporate

Recovery of SNAM performance bond funds
A process to recover the performance bond funds deposited with SNAM as part of the PM-1 grid connection process was finalised during the quarter. The amount reimbursed from SNAM was €757,000 (100% basis) with €476,910 net to PVO. This followed the completion of the pipeline tie-in connection to the newly built PM-1 gas treatment facility. The return of the bond deposited with SNAM was conditional on completion of the SNAM grid connection and the Gas Sales Agreement, announced on 14 February 2023.

Issue of shares
During the quarter, the Company issued 3,000,000 shares upon the exercise of the remainder of options with an exercise price of A$0.05 and expiring 21 July 2023. Proceeds from the options exercised was €92k (A$150k). At 30 June 2023, the company had 1,158,961,621 ordinary shares on issue and 7,500,000 unlisted options with an exercise price of A$0.10 and expiring 30 June 2024.

Cash flow
Net operating cash outflow was €361k and development cost cash outflow for the Podere Maiar-1 well site was €137k in the quarter.

The Group’s cash balance at 30 June 2023 was €939k (A$1,539k).

Regarding Section 6.1 of the Appendix 5B and payments totalling €110k made to related parties and their associates during the quarter, the Company advises these payments consisted of director fees for the current and prior quarter and also include payment of accrued director fees from prior financial years.

Information Provided in Accordance with ASX Listing Rules 5.4.1 and 5.4.2

In accordance with ASX Listing Rule 5.4.1, the Company confirms that, other than the development underway at the Podere Maiar-1 well site, there have been no material developments or changes to its exploration activities. As the focus in this quarter was the development of the Poder Maiar-1 gas plant and pipeline, there were no other substantive exploration activities or costs incurred during the quarter.

In accordance with ASX Listing Rule 5.4.2, the Company advises that the development and production activities undertaken at the Podere Maiar-1 site and costs incurred are as described in the relevant sections above.


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