Po Valley Limited (ASX:PVE) Consolidated Financial Report For Six Months Ended June 30, 2008

Perth, Sept 9, 2008 (ABN Newswire) - The Directors of Po Valley Limited (ASX:PVE) present their report together with the consolidated financial report for the half-year ended 30 June 2008 and the review report thereon.

Directors

The directors of the Company at any time during or since the end of the half-year are:

Name Date of first appointment Date of re-appointment

Non- Executive:
G Bradley (Chairman) 30 September 2004 30 May 2007
B Pirola 10 May 2002 30 May 2008
D McEvoy 30 September 2004 30 May 2007

Executive:
M Masterman 22 June 1999 - Chief Executive Officer

Principal Activities

The principal continuing activity of the group in the course of the year was the development and exploration for gas in the Po Valley region in Italy.

Review and results of operations

Operating Results

The net loss of the consolidated entity after income tax amounted to $ 2,319,202 for the half-year ended 30 June 2008 (2007: Loss $ 1,357,727)

Operating Review

During the half year the Company progressed towards first gas production for Sillaro and Castello fields with the granting of the environmental approvals. Construction of the surface plant equipment for these fields and associated skids were 63% complete at the end of June. The production licence approval process is now at the stage for each of these fields where it is expected that a final inter-governmental meeting, expected to take place in September 2008, is required prior to final grant of production licences by the responsible national government authority.

Also during the period, the Company achieved a commercial agreement with Edison to take over the full operatorship and ownership of the San Vincenzo exploration licence area and associated Sant' Alberto production concession application. As part of this agreement, Edison will participate on a 50/50 basis, in the awarded Ossola licence area, where the Company is pursuing large-scale oil and gas/condensate targets.

Environmental approval was received for the drilling of the Bezzecca-1 appraisal project and Fantuzza-1 is expected in the 2nd half. All drilling equipment (piping, casing and wellheads), drill rig and other critical support contracts are in place for the drilling of Bezzecca-1 and Fantuzza-1 wells.

Work progressed on the new licence applications with the purchase and evaluation of seismic lines on the La Prospera, Opera and Podere Gallina exploration licences. The Company also secured during the period the preliminary award, subject to environmental clearance, of two new licences - the offshore licence area AR- 168-PY ("Azzurra") in the northern Adriatic and Cadelbosco di Sopra in the onshore Po Valley.

The Company closed a $41,120,000 (EURO25,000,000) finance facility with the Bank of Scotland which was drawn to $3,940,940 (EURO2,396,000) as at the end of 30 June 2008. During the six months to 30 June 2008, 1,200,000 options expiring 31 October 2008 were exercised at $1.25. The proceeds received by the Company on exercising these options to shares were a total $1,500,000.

During the six months to 30 June 2008, the Company granted 1,200,000 options to executives and 1,800,000 options to non-executive directors. These options expire on 31 May 2011 and have been granted with an exercise price of $1.75.

The company issued 262,463 shares to employees pursuant to the employees share purchase plan. These shares were issued at a price of $1.85.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 3 and forms part of the Directors' report for the half-year ended 30 June 2008.

Matters subsequent to balance date

The Directors have not become aware of any other matter or circumstance which may significantly affect the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity in subsequent financial years.

For the full consolidated financial report for the half-year ended 30 June 2008, please visit the following link:

http://abnnewswire.net/lnk/I0NCMEF4

About PO VALLEY ENERGY LIMITED

Po Valley Energy Limited (PVE) is engaged in the exploration for gas in the Po Valley region in Italy, and appraisal and development of gas properties. During the year ended December 31, 2006, the Company prepared and submitted production concession applications for Sillaro, Castello (aka Vitalba) and Sant Alberto (aka Santa Maddalena) fields. During 2006, eight new license area applications were submitted, of which PVE was awarded with the rights to proceed forward for five gas and oil exploration licenses applications in Italy. The additional licenses cover a total area of 1,610 square kilometers and are all contained within the petroleum provinces in northern Italy where the Company has focused its development options. The five license applications are Ossola and Opera located near Milan and La Prospera, Podere Gallina and La Risorta located near Bologna. The license areas contain eight new gas prospects and two new oil exploration targets.