Po Valley Energy has received a preliminary production concession from the Italian Ministry of Economic Development for the company’s 47 billion cubic feet (bcf) offshore Teodorico gasfield in the northern Adriatic Sea.

The Teodorico gasfield is the chief source of domestic gas production in Italy. It lies within the AR94PY licence area, and is a former ENI gas discovery with five wells drilled and tested, as well as full 3D seismic coverage being available through ENIs earlier operations.

This field is in shallow waters in depths of around 25m of the Adriatic Sea in the eastern coastline of Italy.

Italy's Ministry of Environment has invited Po Valley to start the environmental approval process for Teodorico.

Preparation of Environmental Impact Assessment (EIA) documentation is currently advanced and is scheduled to get submitted by the first half of 2017.

"The importance of this award should not be underestimated as it has the potential to significantly reduce the time to first gas."

After the EIA approval and receipt of full production concession permission, the company intends to drill two production wells and then connect the gasfield to ENI’s Naomi Pandora offshore gas processing facility.

Po Valley has already completed the necessary feasibility study and development design for this programme.

Po Valley Energy chairman Michael Masterman said: “The awarding of this preliminary offshore concession is a very significant step as it allows Po Valley to more rapidly commercialise this very valuable gasfield. Following this award, we expect to very substantially increase the proven gas reserve base of the company by being able to convert the existing 2C (contingent) resources of 47bcf into 2P proven reserves.

“Grant of this preliminary production concession and then the full concession is a very significant milestone as it allows the company to move directly from drilling the two production wells and connecting to the existing ENI processing facility, to gas sales and commercial production. Put simply, new gas project investment is followed shortly thereafter by production and cashflow.”

The company intends to finance the development of the field with a farm-in partner with offshore drilling experience.

Po Valley Energy CEO Sara Edmonson said: “This is an incredible achievement by the team and further demonstrates the company’s capacity to progress our portfolio of quality assets to production. The importance of this award should not be underestimated as it has the potential to significantly reduce the time to first gas from this game-changing field.”