JOHANNESBURG (miningweekly.com) – Australia’s Po Valley Energy, which is in the process of selling its Italian operations to Aim-listed Saffron Energy, has declared a maiden 2P reserve of 36.5-billion cubic feet of gas at the Teodorico gasfield, offshore Italy.

Teodorico has the largest gas in place of all of Po Valley’s gasfields and is at an advanced stage of assessment and is ready for development.

The company received a preliminary award of the Teodorico production concession last year and is advanced in securing environmental approval, which is the main step before full grant of the production concession.

The development of the Teodorico gasfield involves the drilling of two wells, Teodorico 1 and Teodorico 2, both drilled in shallow water of about 30 m in depth, and the construction of a 12 km tie line to the ENI-operated Naomi Pandora gas processing facility, which is connected to the Italian national grid.

Po Valley said on Monday that it had spent nearly €1-million on technical and facilities studies to reach this stage, noting that it had successfully filed the environmental impact assessment and that the Italian Ministry had sanctioned its formal development plan.

Costs have been scoped and quotes obtained for capital expenditure planning, covering the entire execution process.

“The competent person, CGG Services, considers that having reached this advanced stage, and having made these commitments, it is now reasonable to expect that the operator will proceed to development within five years,” Po Valley stated.

Meanwhile, the company said that, following the successful drilling of Podere Maiar 1 dir well in the former Selva gasfield in the Podere Gallina exploration licence, work was under way to provide updated reserve and resource estimates on the Selva stratigraphic discovery. Po Valley stated that it would update the market on these developments in the second quarter of 2018.

The contingent resources estimates have been adjusted to reflect Po Valley’s 63% share in the licence and gasfield following the successful farm out to United Oil and Gas and to Prospex Energy.

Po Valley also stated that CGG had prepared a report in connection with the proposed acquisition of Po Valley Operations and Sound Energy Holdings Italy by Saffron and the readmission to the Aim market of the enlarged group.

Saffron published its admission document on Friday, after close of the ASX trading.

The Po Valley board is currently awaiting finalisation of an independent experts report on the proposed transaction, as required by ASX rules, as part of its evaluation of the proposed transaction and said it would provide further advice on this to the market as soon as practical.