Po Valley Energy (BUY, A$1.50) (PVE, A$0.365, ? (2.67%)) announced that commercial gas production had commenced at its second production field in Northern Italy. Production from the first of two production wells in the Sillaro field (near Bologna) has begun and the second well is planned to be brought in to production over the next fortnight. Production from double completed Sillaro 2dir well was operating at its targeted production rate of 31,200m3/day from level A and will be increased further when level E is brought into production over the next week. Over the next month the plant will be brought up to the planned full production rate of 110,000m3/day.
Comment: The start of production at Sillaro is a welcome event after the problems encountered recently by the Company at Castello. However it should have only a muted impact compared to the fall caused by the reservoir pressure issues at Castello. We believe the stock will continue to drift until those are resolved positively.
Rockhopper Exploration (HOLD, £1.10) (RKH, 172p, ? (18.1%)) confirmed that well 14/10-2 on the Sea Lion prospect has been successfully suspended for future testing. The well was drilled to a total depth of 2,744m and the duration of the rig hire was 35 days. Work continues on analysis of the results of the well The physical samples taken from the well are currently being transported to the United Kingdom by freight plane, and are due to arrive shortly. Based on that timetable, the Company anticipates making a further update within the next 10-15 days at which point it expects to be able to provide initial estimates of the potential size of the discovery.
Comment: As a reminder, the pre-drill P50 for the Sea Lion prospect was some 170MMbbl within a wide range of 58-472MMbbl.
Caza Oil & Gas (CAZA, 4.75p, ? (9.52%)) has executed an exploration agreement with Devon Energy Production Company, L.P. as operator, to jointly test and develop Caza's Windham Wolfberry prospect in Crane and Upton Counties, Texas, covering approximately 1,318 net acres. The Agreement provides terms whereby Devon can earn 75% of Caza's 100% participation interest in the initial well. After completion of the initial well, Devon will have the right to participate for its 75% interest in all operations associated with the property, and Caza will participate for its remaining 25% interest.
Valiant Petroleum (VPP, 645p, ?…
