After today’s Initial Public Offering and successful acquisition of its assets in Italy we discuss why the company was able to acquire the producing assets. We talked about the listing on the AIM market and why it was unloved on the ASX market under its former name of Po Valley Energy. We speak about current production, the near term additional production plans and bringing a third well into production by the end of the year.
The IPO will primarily enable Saffron Energy to fund the accelerated development of all three of its gas fields. Specifically, the Company will utilise the funds to complete the Bezzecca gas field development, bringing the new Sant’Alberto gas field into production and refinance the Bezzecca development bridging finance.
Michael Masterman, Chief Executive Officer of Saffron Energy, commented:
“I am proud and delighted that Saffron Energy is joining AIM today. This is an important and transformational step for the Company. We believe our AIM listing will establish a more representative fair value for our high-margin gas fields while unlocking the upside that each asset possesses.”
“Italy is a very good market to produce and commercialise gas. The gas from our fields is very pure. It is 99% methane, so the processing plant can be very small. The gas basically goes straight into the Italian national grid from the well.”
“We have a well- defined development strategy and work programme to increase production, based on proven and low-risk operations and a strong technical senior manager who has significant experience from the major Italian oil company ENI.”
“The proceeds from the Placing and Subscription, together with the increased cash flow derived from the start-up of production from the Bezzecca field next month will put the Company in an ideal position to advance and fund our capital expenditure development plans at all 3 of our gas fields, increasing production from current modest levels to over 4,000 mcfpd by 2019. That’s a very good base to build a strong business on.”
“We have been very pleased to work with Turner Pope Investments who have introduced a number of their private clients as well as institutional investors to this oversubscribed fundraise”
“We look forward to communicating on our progress as we begin our life as an AIM quoted company.”
Saffron Energy is a natural gas producer with interests in Northern Italy. Its portfolio includes one gas production (Sillaro), one near-term gas production field (Bezzecca (90%) andan application for a near field (Sant’Alberto), all near Milan and Bologna. These assets are being spun out from Po Valley Energy Ltd (“PVE”) (ASX: PVE), an Australian company, and will be now held through Saffron’s wholly owned Italian subsidiary, Northsun Italia S.p.A (“NSI”).
• 100% ownership via Saffron’s wholly owned Italian subsidiary, NSI.
• Production licence located in the Emilia Romagna region, 30 km east of Bologna, in northern Italy.
• Production began in May 2010 from 2 wells. Total production of approximately 11,500 standard cubic metres per day (“scmpd”) (c. 300 – 400 million cubic feet of gas per day (“mmcfpd”)) in Q4 2016.
• 90% ownership via Saffron’s wholly owned Italian subsidiary, NSI.
• Production licence located 35 km east of Milan, in northern Italy, within the Cascino Castello Production Licence.
• Final preparations to bring the Bezzecca-1 well into production are on schedule for March completion and first gas sales.
• Gas from the Bezzecca field will be processed at the Vitalba processing plant located only 7 km away and will be ready to be connected through the newly constructed tie-in pipeline.
• The development plan includes a second production well which will be drilled in due course. Gas from Bezzecca 2 will also be processed through the Vitalba processing plant.
• Current plans in place are to drill 2 development wells, one in late 2018 and the second in late 2020 in order to fully exploit the proven and probable reserves on the field at a cost of approximately €4.0m per well.
· 100% ownership via Saffron’s wholly owned Italian subsidiary, NSI.
· Located in the Emilia Romagna region of northern Italy.
· Application for a full production concession for Sant’Alberto is expected to be fully granted during the first half of 2017.
· Production well is in place and gas processing facilities and a tie into the Italian National Grid is scheduled for the second half of 2017. Expected cost of €1.3m to complete a modular plant to treat gas production from the existing production well.
The Company anticipates that combined production from the three fields could reach 4,000 mcfpd by 2019, equivalent to almost 700 barrels of oil equivalent per day (“boepd”).
All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned