Po Valley Energy Limited

New testing has brought to six the number of gas bearing levels to be exploited by Po Valley Energy Limited (ASX:PVE) at its Sillaro field in northern Italy. Latest testing on the successfully completed Sillaro-2 well - 500 metres from the earlier successfully tested production well, Sillaro-1 - has confirmed production rates on the main zones and added production potential at two previously untested levels.

Production capacity has been confirmed in the PL2A level and additional production potential identified, by Po Valley Energy Limited (ASX:PVE) during initial clean up and testing of the Sillaro- 2 gas well, east of Bologna in northern Italy.

PO Valley Energy Limited (ASX:PVE) announced today that the Sillaro#2 production well has been successfully drilled on schedule to a target depth of 2364m and log runs have been completed. Log analysis of Sillaro#2 confirmed the main pay zones in the Sillaro#1 production well across a gross interval of 140 metres from 2,180m to 2,320m. There is a very good match between the two wells which are laterally 500m apart at target depth.

The Sillaro-2 production well, at PO Valley Energy Limited's (ASX:PVE) Sillaro gas production field, was spudded today following mobilisation of the drilling equipment to the field. Italian-based Perazzoli Drilling, employing a 200 tonne capacity HH200 hydraulic rig, has been contracted for the Sillaro-2 well.

PO Valley Energy Limited (ASX:PVE) announced today the commencement of installation works on the Castello production field east of Milan. The Italian contractor, Semat SpA, have commenced site activities today and expect to complete the civil works and plant installation within a target four-month schedule.

PO Valley Energy Limited (ASX:PVE) has taken a key step towards maiden gas production from its northern Italy fields, with the announcement today of official government approval for the installation of a commercial plant at the Castello project, east of Milan.

PO Valley Energy (ASX:PVE) As I said in my letter in the Annual Report, this time last year we had hoped by now to have at least one of our gas fields in commercial production. Progress towards this objective has been slower than we hoped, due largely to factors outside our direct control, but I am now pleased to report that we have made significant progress towards this objective.

PO Valley Energy (ASX:PVE) As I said in my letter in the Annual Report, this time last year we had hoped by now to have at least one of our gas fields in commercial production. Progress towards this objective has been slower than we hoped, due largely to factors outside our direct control, but I am now pleased to report that we have made significant progress towards this objective.

PO Valley Energy (ASX:PVE) As I said in my letter in the Annual Report, this time last year we had hoped by now to have at least one of our gas fields in commercial production. Progress towards this objective has been slower than we hoped, due largely to factors outside our direct control, but I am now pleased to report that we have made significant progress towards this objective.

The priority objective of PO Valley Energy (ASX:PVE) is getting the Sillaro and Castello fields into production. Approvals are in place to drill Sillaro-2 and the Company expects to spud this well in June/July 2009. The Ministry is in the final stage of the HSE reviews and the Castello installation approval and associated site access is expected during the June quarter.