(Alliance News) - Reabold Resources PLC on Friday said the Italian government has approved a decree to boost the country's renewable energy production and energy security.
The oil and gas investing company with a diversified portfolio of exploration, appraisal and development projects said the decree "provides incentives to build plants for energy production from renewable sources, such as the liquefaction of natural gas; the release of new licences for the exploitation of gas fields aimed at providing gas to industries with high gas consumption, at competitive prices; incentives for [liquefied natural gas] terminals and incentives for carbon dioxide storage programmes."
The decree is already in force, Reabold said, with the Italian Parliament having 60 days to ratify it into a definitive law.
Reabold noted this as it has an 18% interest in LNEnergy Ltd, whose primary asset is an exclusive option over a 90% interest in the Colle Santo gas field in Italy.
Reabold described Colle Santo as a "highly material gas resource" with an estimated 65 billion cubic feet of 2P reserves, with two production wells already drilled and flow-tested, making the field development ready.
LNEnergy believes that the field has the potential to generate an estimated EUR11-12 million of gross post-tax free cash flow annually, Reabold said.
Reabold retains the right to invest a further GBP1.7 million in LNEnergy shares under an option, as announced in May and September. If exercised, this would result in Reabold holding a 26% interest in the enlarged share capital of LNEnergy.
"The regulatory environment in Italy is looking increasingly promising. With the Colle Santo gas field, we have an asset that can help Italy improve its energy security and provide a much needed domestic energy supply to the country. We look forward to updating shareholders with our progress," said Reabold Co-Chief Executive Officer Stephen Williams.
Shares in Reabold were up 1.2% to 0.13 pence each in London on Friday before closing.
By Greg Rosenvinge, Alliance News senior reporter
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Reabold Resources (RBD)