Gas Production ITALY AND PO VALLEY Gas Consumption 3 tcf p.a. - - PowerPoint PPT Presentation

Gas Production

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ITALY AND PO VALLEY

 Gas Consumption 3 tcf p.a.  Growing at 2-3% p.a.  Gas Production 27 tcf to date  Europe’s 2nd largest

• nshore gas province

Po Valley  Europe’s largest

• nshore oil field

Val D’Agri  Po Valley/Northern Adriatic was monopoly of ENI/Agip for 50 years

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PVE January 2005

ITALIAN GAS PRICE: EUR14cents/cubic metre

Castello 100%

Undrilled

Sillaro 100%

Undrilled

Sant’Alberto 50%

1 well drilled

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Castello 100%

1 well drilled

Sillaro 100%

1 well drilled

Sant’Alberto 100%

1 well drilled + Production concession appl.

Bezzecca 100%

Undrilled

Fantuzza 100%

Drilling planned for 2

nd half 2010

Correggio 100%

Preliminary award

Offshore adriatic 100%

Preliminary award

12 Exploration Projects 100%

Prospect definition work underway

PVE January 2009

ITALIAN GAS PRICE: EUR22 cents/cubic metre

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Castello 100%

1 well drilled + Surface plant installed + Production

Sillaro 100%

2 wells drilled + Surface plant installed + Production

Sant’Alberto 100%

1 well drilled + Production concession appl.

Bezzecca 100%

1 well drilled + Production concession appl.

Fantuzza 100%

Drilling planned for 2

nd half 2010

Correggio 100%

Drilling planned for 2011

Offshore adriatic 100%

Preliminary award

12 Exploration Projects 100%

Gradizza, Cembalina planned for drilling in the next 18 months

PVE MAY 2010

Invested Capital €35m/AUD50m

ITALIAN GAS PRICE: EUR27cents/cubic metre

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RESOURCE BASE

Po Valley Assets  11 License areas  2 Production projects

• Sillaro
• Castello



2 Drilling projects

• Sant’ Alberto
• Bezzecca

 5 Gas Discoveries

for appraisal

 12 Gas Exploration

prospects

 2 Oil opportunities

Nov 2009

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PRICES RISING DUE TO FALLING EUR AND RISING OIL PRICES

ITALIAN ENI GAS RELEASE PRICE: APRIL UPDATE

Source: ENI Gas Release and forecast sourced from Alba Soluzioni; Driver parameters and forward curves sourced from Bloomberg Summary €cent/m3 USD/Mcf AUD/Mcf

• Apr. 10 Month

28.35 10.57 11.40

May 10 Forecast

29.50 11.00 11.86

2010 Average

29.86 11.26 12.10

2011 Cal

34.90 12.93 13.81

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PVE RESERVE & RESOURCE CATEGORIZATION

Page 8 PROJECT CURRENT ASSESSMENT (BCF) KEY RISKS / UNCERTAINTIES REVIEW PLAN TIMING OF RESERVES / RESOURCES REVIEW 1P 2P RESERVES CASTELLO 4.6 6.3  Pressure Decline Independent, external review of new pressure data May / June 2010 SILLARO 10.4 14.4  Reservoir Description  Production Performance Independent, external review of: Initial production performance Reservoir model 31 July 2010 PROJECT CURRENT ASSESSMENT (BCF) KEY RISKS / UNCERTAINTIES REVIEW PLAN TIMING OF RESERVES / RESOURCES REVIEW 1C 2C CONTINGENT RESOURCES

• DEVELOPMENT PENDING

SANT’ ALBERTO 8.0 12.9  Structural Complexity  Reservoir Model  Production Performance  New seismic data  Independent, external review of:

• Structural mapping
• Reservoir model
• Development plans

3Q 2010 BEZZECCA 0.7 3.1  Reservoir Model  Production Performance  External review completed Completed

• DEVELOPMENT UNCLARIFIED

FANTUZZA

• 26.6

 Reservoir Quality / producibility  Independent, external review of:

• Reservoir model
• Volumetric analysis

31 July 2010

RESOURCES MANAGEMENT ASSESSMENT

Page 9 PROJECT CURRENT ASSESSMENT (BCF) KEY RISKS / UNCERTAINTIES REVIEW PLAN TIMING OF RESERVES / RESOURCES REVIEW 1C 2C

• DEVELOPMENT UNCLARIFIED / LICENCE AWARD PENDING

CORREGGIO

• 35.0

 Reservoir Model  Production Performance  Independent, external review of Stage 1 Development Plan 31 July 2010 AR.168PY LICENCE To be estimated  Production Performance  Independent, external review of:

• Reservoir model
• Development Plan

Dependent on final permit award RAVIZZA To be estimated  Reservoir Quality  Production Management  Commercial Viability  Independent, external review of:

• Reservoir model
• Development Plan

Dependent on final permit award BAGNOLO IN PIANO To be estimated  Reservoir Quality  Production Management  Commercial Viability  Independent, external review of:

• Reservoir model
• Development Plan

Dependent on final permit award

RESOURCE MANAGEMENT ASSESSMENT

Intent to carry out external audit of reserves/resources estimation processes at year end 2010

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PO VALLEY ASSETS REVIEW

• CASTELLO
• Production start 17 Dec 2009
• Pressure decline being investigated
• SILLARO
• Sillaro-2 drilled August 2009
• Plant installed and production started
• SANT’ALBERTO
• New Seismic being acquired
• BEZZECCA
• Bezzecca-1 drilled April 2009
• Reservoir study reduces reserves
• Development plan underway
• CORREGGIO
• G&G work near completion
• 1-2 wells planned for 2011
• AZZURRA
• First phase G&G study complete
• EXPLORATION
• 12 Prospects
• Cembalina and Gradizza first wells to be drilled

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CASTELLO PLANT INAUGURATION: 12 JANUARY 2010

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CASTELLO PRODUCTION SUMMARY: 17 DEC 2009 - 30 APRIL 2010

1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 80,000 16/12/09 23/12/09 30/12/09 06/01/10 13/01/10 20/01/10 27/01/10 03/02/10 10/02/10 17/02/10 24/02/10 03/03/10 10/03/10 17/03/10 24/03/10 31/03/10 07/04/10 14/04/10 21/04/10 Cumulative Gas Production (m3) Daily Prod (m3/day)

Castello Production Summary

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CASTELLO STRUCTURE

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PO VALLEY ASSETS REVIEW

• CASTELLO
• Production start 17 Dec 2009
• Pressure decline being investigated
• SILLARO
• Sillaro-2 drilled August 2009
• Plant installed and production started
• SANT’ALBERTO
• New Seismic being acquired
• BEZZECCA
• Bezzecca-1 drilled April 2009
• Reservoir study reduces reserves
• Development plan underway
• CORREGGIO
• G&G work near completion
• 1-2 wells planned for 2011
• AZZURRA
• First phase G&G study complete
• EXPLORATION
• 12 Prospects
• Cembalina and Gradizza first wells to be drilled

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SILLARO SUCCESSFULLY DRILLED AND TESTED

 6 reservoir levels confirmed  2 new previously untested levels  Well completed safely on schedule

• n budget

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SILLARO PLANT 100% COMPLETE AND IN PRODUCTION

On the left side the Major of Medicina town visiting the plant with Po Valley Chairman

ON THE LEFT SIDE THE REPRESENTATIVE OF BOLOGNA MINISTRY MR . GIACCHETTA AND THE MAJOR OF THE MEDICINA TOWN MR. RAMBALDI VISITING SILLARO PLANT

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FANTUZZA CAN FEED INTO SILLARO

 Targeting 2,600m Miocene

structure

 Previously drilled and

tested by ENI

 50km of seismic acquired

and processed

 Fantuzza 1 site selected,

drilling approvals in process, equipment purchased and drilling rig contracted

 Expected to spud in 2010  Sillaro surface plant and

pipeline sized to process Fantuzza (2km away)

 Cost €4m  Key uncertainties: reservoir

quality, producibility

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• CASTELLO
• Production start 17 Dec 2009
• Pressure decline being investigated
• SILLARO
• Sillaro-2 drilled August 2009
• Plant installed and production started
• SANT’ALBERTO
• New Seismic being acquired
• BEZZECCA
• Bezzecca-1 drilled April 2009
• Reservoir study reduces reserves
• Development plan underway
• CORREGGIO
• G&G work near completion
• 1-2 wells planned for 2011
• AZZURRA
• First phase G&G study complete
• EXPLORATION
• 12 Prospects
• Cembalina and Gradizza first wells to be drilled

PO VALLEY ASSETS REVIEW

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Block 5

SANT’ALBERTO – SEISMIC TO BE ACQUIRED IN MAY

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PO VALLEY ASSETS REVIEW

• CASTELLO
• Production start 17 Dec 2009
• Pressure decline being investigated
• SILLARO
• Sillaro-2 drilled August 2009
• Plant start up underway
• SANT’ALBERTO
• New Seismic being acquired
• BEZZECCA
• Bezzecca-1 drilled April 2009
• Reservoir study reduces reserves
• Development plan underway
• CORREGGIO
• G&G work near completion
• 1-2 wells planned for 2011
• AZZURRA
• First phase G&G study complete
• EXPLORATION
• 12 Prospects
• Cembalina and Gradizza first wells to be drilled

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BEZZECCA INTERPRETATION

BEZZECCA SCHEMATIC CROSS-SECTION PRE BEZZECCA-1.



Remaining gas in place 70bcf



Continuous sand reservoir model



Assumed 57% recovery factor based on water drive recovery

• mechanism. Resulting in estimate of 44bcf recoverable

resources BEZZECCA SCHEMATIC CROSS-SECTION POST BEZZECCA-1.



Remaining gas in place significantly reduced



Discontinuous / complex reservoir distribution



Low recovery factor due to semi-isolated reservoir bodies



Overall reduction in recoverable resources to 3.1bcf



2 well development with lower recovery per well

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da inserire  Target depth 2000m  Pliocene - Miocene  Contingent Resources 2.4Bcf

a’ a a a’

BEZZECCA 2 (CASCINA S.PIETRO PERMIT)

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BEZZECCA CAN FEED INTO CASTELLO

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PO VALLEY ASSETS REVIEW

• CASTELLO
• Production start 17 Dec 2009
• Pressure decline being investigated
• SILLARO
• Sillaro-2 drilled August 2009
• Plant installed and production started
• SANT’ALBERTO
• New Seismic being acquired
• BEZZECCA
• Bezzecca-1 drilled April 2009
• Reservoir study reduces reserves
• Development plan underway
• CORREGGIO
• G&G work near completion
• 1-2 wells planned for 2011
• AZZURRA
• First phase G&G study complete
• EXPLORATION
• 12 Prospects
• Cembalina and Gradizza first wells to be drilled

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CORREGGIO: STRONG ADDITION TO THE PORTFOLIO

 Production to date ~240 bcf  Potential P50 gas

discoveries ~ 35 bcf

 Planned 3D seismic

coverage

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EXPANSION OFFSHORE: AZZURRA (AR168PY)

 Major gas production zone in Italy  Shallow water depth ~20m  Full 3D seismic coverage  4 drilled and tested prospects  Preliminary award to Po Valley: July 2008  G&G work underway  Pipeline connection through licence  Ministry/Po Valley opposing legal challenge to Ministry award by losing

• bidder. Court Case June 2010.
• Azzurra
• Ginevra
• Adele
• Irma/Carola

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12 NEW PROSPECTS

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Mr Graham Bradley Non-executive Chairman

 Former CEO - Perpetual, Blake Dawson Waldron  Director – Singtel  Chairman – HSBC, Stockland, Boart Longyear

Mr David McEvoy Non-executive Director

 33 years Exxon/Esso  Director - Woodside Petroleum, AWE, Innamincka Petroleum

Dr Byron Pirola Non-executive Director

 23 years McKinsey/Port Jackson Partners Limited  Founder and major shareholder

Mr Michael Masterman Chief Executive & Managing Director

 8 years McKinsey  7 years CFO Anaconda Nickel  Executive Chairman Caspian Holdings Plc  Founder and major shareholder

BOARD OF DIRECTORS

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PO VALLEY CAPITAL STRUCTURE

Substantial Shareholders Shares (m) held as at 30 April 2010 % Michael Masterman 23.9 21.7% Hunter Hall 19.5 17.7% Beronia Investments 7.1 6.5% Other Investors 59.6 54.1% TOTAL SHARES 110.1 Market Capitalization (at A$0.37*) (€28.9m) A$41.3m Cash at Bank (Apr 10) (€3.6m) A$5.1m Drawing on €20m BOS Facility (€9.0m) A$13.2m Enterprise Value (€34.3m) A$49.4m

* At 30 April 2010

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BANK OF SCOTLAND - RESERVOIR FACILITY

Facility Size: €20 million (Current Borrowing base EUR13.8m) Use of Funds: Put Castello in production (EUR3m) Drill Sillaro 2 and Install Surface plant (EUR7m) Term: 5 years expiring 15 November 2013 Borrowing base limit set on semi annual basis Interest Rate:

• Current

EURIBOR +300bp Margin = Currently 3.4%

• Post Completion

EURIBOR +180bp Margin = Currently 2.2% Drawings:

• Current

€9 million (30 April 2010)

• Target

€5 million (31 Dec 2010)

*Civil Works and Well Equipment purchased

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 Ramp up production from Sillaro to 110,000 cm per day  Resolve Castello production issues and reassess field size

and production life

 Generate free cashflows and EBITDA  Reduce debt levels  Secure full award of Cadelbosco di Sopra (Correggio)

and AR168PY (Azzurra) licences

 Fund exploration through farm outs  Complete independent review of key reserves and resources

KEY OBJECTIVES FOR NEXT 12 MONTHS

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Disclaimer

This presentation should not be considered as an invitation or recommendation to purchase securities in PVE. PVE has not audited or investigated the accuracy or completeness of the information, statements and opinions contained in this presentation. Accordingly, to the maximum extent permitted by applicable laws, PVE makes no representation and can give no assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omission, from any information, statement or opinion contained in this presentation. You should not act or refrain from acting in reliance on this presentation material. This overview of PVE does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of PVE’s prospects.You should conduct your own investigation and perform your own analysis in

• rder to satisfy yourself as to the accuracy and completeness of the information, statements and opinions

contained in this presentation and making any investment decision. The contents of this presentation are confidential. This presentation is being provided to you on the condition that you do not reproduce or communicate it or disclose it to, or discuss it with, any other person without the prior written permission of PVE.