Annual Report
For the year ended 31 December 2024
PO VALLEY ENERGY LIMITED
ABN 33 087 741 571
CORPORATE DIRECTORY
Directors
Kevin Bailey AM
Chairman
Sara Edmonson
Non-Executive Director
Joseph Constable
Non-Executive Director
Katrina O’Leary
Non-Executive Director
Michael Gentile
Non-Executive Director
Company Secretary
Kevin Hart
Registered Office
Level 5, 191 St Georges Terrace, Perth WA 6000
Rome Office
Via Isonzo 34, Rome 00198 Italy
Tel: +39 06 42014968
Share Register
Automic
Level 5, 191 St Georges Terrace, Perth WA 6000
Tel: 1300 288 664
Auditor
HLB Mann Judd
Level 4, 130 Stirling Street, Perth WA 6000
Solicitors
Steinepreis Paganin
Level 14, QV1 Building, 250 St Georges Terrace Perth WA 6000
Stock Exchange Listing
Australian Securities Exchange (ASX) under the code PVE
OTC Markets Group (OTCQB) under the code PVLEF
Website address
www.povalley.com
PO VALLEY ENERGY LIMITED
ABN 33 087 741 571
CONTENTS
CHAIRMAN’S LETTER TO SHAREHOLDERS ................................................................................................................... 1
DIRECTORS’ REPORT .................................................................................................................................................... 3
REMUNERATION REPORT .......................................................................................................................................... 12
AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................................... 19
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ............................................................... 20
STATEMENT OF FINANCIAL POSITION ....................................................................................................................... 21
STATEMENT OF CHANGES IN EQUITY ........................................................................................................................ 22
STATEMENT OF CASH FLOWS .................................................................................................................................... 23
NOTES TO THE FINANCIAL STATEMENTS .................................................................................................................... 24
CONSOLIDATED ENTITY DISCLOSURE STATEMENT ……………………………………………………………………………………………….57
DIRECTORS’ DECLARATION ........................................................................................................................................ 58
INDEPENDENT AUDITOR’S REPORT ........................................................................................................................... 59
TECHNICAL SUMMARY – RESERVES AND RESOURCES STATEMENT .......................................................................... 64
ASX ADDITIONAL INFORMATION ............................................................................................................................... 71
PO VALLEY ENERGY LIMITED
ABN 33 087 741 571
CHAIRMAN’S LETTER
1
Dear Shareholder,
On behalf of the Board of Directors, I am pleased to present the Company’s Annual Report for the 2024
year. This year has been one of considerable achievement and growth, supported by a robust and
expanding market environment. It is with great pride that I share the progress, results, and strategic
initiatives that have driven the Company forward.
Our operational performance remained strong, with production from the Podere Maiar-1 (PM-1) field
consistently meeting expectations at steady, predictable levels. For 2024, total production reached
27.5 million standard cubic meters (17.3 million net to PVE). This robust output generated €6.5 million
in gas revenues for the Group. Coupled with our disciplined operational approach, we achieved a profit
after tax of €2.3 million for the year, a testament to operational excellence and our focus on maximising
shareholder value.
Significant strides were made across our development projects at Selva North, South, East Selva, and
Riccardina. Throughout the year, we submitted drilling programs and Environmental Impact Studies
(EIS) for these new wells to the Ministry for approval. Completing such an extensive volume of
technical and regulatory work within a 12-month timeframe highlights the dedication and efficiency
of our operations team.
We have made important progress on the 3D seismic campaign across the Selva Malvezzi Production
Concession. Having received regional approval (INTESA) to proceed, we successfully completed the
preliminary design, planning, and permitting stages for the campaign which is significant in size. Formal
permitting, scheduling and landowner agreements are now underway. Importantly, the seismic survey
will be conducted using low impact technologies, ensuring minimal environmental disruption, and
conducted in a respectful and responsible manner in alignment with industry best practices.
From a financial standpoint, the Company remains in a strong and resilient position. We are debt-free
and held €6.5 million in cash (equivalent to $11.3 million AUD) as of the first quarter of 2025. This solid
financial standing provides the necessary resources to continue advancing our development plans for
the four new wells and to complete the 3D seismic campaign, both of which are pivotal to our near
term growth strategy.
We also continue to evaluate opportunities to unlock value from our offshore Adriatic asset at
Teodorico. We are actively assessing pathways, including the sale of the asset to a major offshore
operator or securing a joint venture partner through a farm-in arrangement. Encouragingly, recent
legislative reforms by the Government to strengthen domestic natural gas production and security
bode well for the development of Teodorico.
I would like to take this opportunity to sincerely thank the Board and our operations team in Italy for
their dedication, hard work, and expertise. Their commitment has been instrumental to the Company’s
success in 2024.
PO VALLEY ENERGY LIMITED
ABN 33 087 741 571
CHAIRMAN’S LETTER
2
Looking forward, we are confident in the Company’s future. Our strategic initiatives, combined with
our operational efficiency and strong financial base, position us well to continue delivering value to
our shareholders. We remain focussed on executing on our development plans and driving sustainable,
long-term growth.
Thank you for your ongoing support and confidence in the Company. Together, we look forward to
another year of success and growth.
Kevin Bailey AM
Chairman
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
3
The Directors of Po Valley Energy Limited (“the Company” or “PVE”) present their report together with the
financial report for the year ended 31 December 2024 of the Group, being the Company and its controlled
entities (“the Group” or “Po Valley”).
1. Directors
The Directors of the Company at any time during or since the end of the financial year are:
Kevin Bailey AM — Director since 22 April 2016
Non-Executive Chairman
DipFP, Age 64
Kevin was appointed as a director on 22 April 2016 and as Chairman on 2 May 2022. He has been a shareholder
of PVE since April 2008 and brings significant business acumen and experience to the Board. Kevin is a highly
successful businessman with a range of business interests, both local and overseas. He worked for 28 years as
a Certified Financial Planner and was a founding director of Shadforth Financial Group Limited. He was a
member of the Prime Minister’s Community Business Partnership and devotes considerable time to
philanthropic interests. Kevin is currently Chairman of Parousia Media Pty Ltd and has served as director of
various entities including the Investment Advisory Board of the Timor Leste Petroleum Fund, the $17bn
Sovereign Wealth Fund of Timor Leste, Outward Looking International Pty Ltd, Halftime Australia Pty Ltd, Alpha
Australia, Empart Inc, and Dads4Kids Fatherhood Foundation. In the past three years, Kevin has not been a
director of any other listed company.
Sara Edmonson — Director since 23 December 2019
Non-Executive Director
BSBA, MBA, Age 45
Sara was appointed as a director on 23 December 2019. Sara has extensive experience in natural gas, the
critical transition fuel for a low carbon future. Sara is a former President at Associazione Energia Nazionale, an
Italian association created to promote sustainable production, transportation and use of domestic energy and
is fluent in Italian, having previously worked both in Italy and internationally for Ernst & Young Transaction
Advisory Services. During her tenure at EY, Sara advised numerous blue-chip corporate clients on transactions
in Russia, Romania, Turkey and the US including the US$5 billion acquisition of DRS Technologies by
Finmeccanica in 2008. She holds an MBA from St John’s University in New York City and a Masters in
Sustainability Sciences from Harvard University. Sara led PVE as CEO from July 2010 to 2017 and served on the
board of Coro Energy Plc from November 2017 to October 2018 and as executive until March 2019. Sara has
spent the last several years focused on the energy transition leading large commercial-scale development of
green hydrogen projects in Europe. She has been deeply involved in the policy shaping around decarbonisation
and climate targets at EU and Member State level. In the past three years, Sara has not been a director of any
other listed company.
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
4
Joseph Constable — Director since 30 November 2021
Non-Executive Director
BA(Hons) MPhil, Age 33
Joseph was appointed as a director on 30 November 2021. Joseph has been a long term shareholder of PVE
and has a detailed understanding of the company’s assets and brings his significant financial skills to PVE and
the Board. Joseph was previously an executive director of Hancock & Gore (ASX: HNG), and portfolio manager
at H&G Investment Management Limited and Executive Director at H&G High Conviction Limited (ASX: HCF).
In the past three years, Joseph has not been a director of any other listed company.
Katrina O’Leary — Director since 2 May 2022
Non-Executive Director
BA LLB, LLM, Age 61
Katrina was appointed as a director on 2 May 2022. Katrina is an Intellectual Property (IP) and Information
Technology lawyer with decades of experience in IP management, commercial and litigious matters. Katrina
also advises on ESG compliance especially in the area of ethical sourcing. Her practice is international, and she
has worked in Italy, the USA and Australia representing government and international organisations and major
public companies. Katrina brings to the board her strength in legal compliance, governance, and risk
management. In the past three years, Katrina has not been a director of any other listed company.
Michael Gentile — Director since 25 November 2024
Non-Executive Director
CFA Charter Holder, Age 45
Michael was appointed as director on 25 November 2024. Michael is considered one of the leading strategic
investors in the junior resource sector in Canada, owning significant top-five ownership stakes in over 20 small-
cap mining companies, and is also a shareholder of PVE. He is currently a director of Group Eleven Resources
(TSX-V: ZNG), Northern Superior Resources (TSXV:SUP), OnGold (TSX-V:ONAU) Radisson Mining Resources
(TSX-V: RDS), Roscan Gold (TSX-V: ROS) and Solstice Gold (TSX-V: SGC) and a Strategic Advisor to Northisle
Copper and Gold (TSX-V: NCX). Michael cofounded Bastion Asset Management in January 2022 a rapidly
growing money management firm in Montreal focused on small to mid-cap equities in the USA and Canada.
Michael was previously a Vice President and Senior Portfolio Manager with Formula Growth Limited where he
worked from 2002 to 2018. In the past three years, Michael has not been a director of any other ASX listed
company.
2. Company Secretary
Kevin Hart – Company Secretary, B.Comm, FCA
Kevin Hart is a Chartered Accountant and was appointed to the position of Company Secretary on 17 April
2018. He has over 30 years’ experience in accounting , management and administration of public listed entities
in the mining, mining services and exploration industry. Kevin is a Principal in the Company Secretarial and
CFO divisions of the Automic Group which provides Company Secretarial, CFO support and corporate
compliance advice to a number of ASX listed entities.
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
5
3. Directors’ Meetings
The number of meetings of the Board of Directors held during the financial year and the number of meetings
attended by each director are provided below:
Director
Attended
Held
Kevin Bailey AM
10
10
Sara Edmonson
10
10
Joseph Constable
10
10
Katrina O’Leary
10
10
Michael Gentile
1
1
Held: represents the number of meetings held during the time director held office.
The roles and responsibilities normally undertaken by the Audit and Risk Committee and the Remunerations
and Nominations Committee have been dealt with by the full board as part of its duly convened meetings
rather than through separate committees.
4. Principal Activities
The principal continuing activities of the Group in the course of the year were:
•
Production of gas at Podere-Maiar 1 in the Selva Malvezzi concession
•
The exploration for gas and oil in the Po Valley region in Italy.
•
Appraisal and development of gas and oil fields.
5. Operating and financial review
Strategy
Po Valley remains a northern Italy-focused energy production, development and exploration company with a
streamlined focus on the following assets:
-
The onshore gas production and further development at Selva Malvezzi;
-
Offshore Adriatic gas development at Teodorico;
-
The large-scale gas prospect at Torre del Moro;
-
Canolo and Zini gas prospects in the Cadelbosco di Sopra exploration licence; and
-
Reinstated Bagnolo in Piano, Ravizza oil discoveries in the Cadelbosco and Grattasasso Permits and
Bagnolo SW oil prospect in Cadelbosco Permit.
Po Valley’s primary focus is gas production at the Podere Maiar-1 well in the Selva Malvezzi Production
Concession and to advance development of the surrounding prospects at North, South and East Selva, with
the goal of drilling these prospects in the next twelve to twenty-four months.
Teodorico is very leveraged to the current market conditions in Italy and Po Valley continues to explore options
to introduce joint venture partners or divest this large offshore gas field.
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
6
Financial results for the year
The Group has had a successful year operating in a strong and growing market. Production results have been
steady and continue to meet predicted levels. Total production for the year was 27,562 Mcm of gas (gross,
net to the Group of 63% or 17,364 Mcm) generating revenue of €6.5 million for the Group. Gas prices have
been robust in the year increasing due to strong market conditions.
Significant progress has also been achieved with targeted exploration and development plans for four new
wells within the Selva Malvezzi production concession.
The profit after tax for the year from continuing operations was €2,391,151 (2023: €586,657).
The Group’s cash reserves as at 31 December 2024 were €4,993,913 (31 December 2023: €1,252,717).
A review of the operations and the results of those operations of the Group during the year is as follows:
Summary of results table:
2024
2023
Mcm
Mcm
Production volume (net)
17,364
6,198
€’000
€’000
Gas Sales
6,524
2,337
EBITDA1
4,004
1,159
Depreciation and amortisation – production
(532)
(190)
Depreciation
(27)
(27)
Unwind of discount of restoration provision
(39)
(108)
EBIT1
3,405
834
Finance costs other than restoration provision
discounting
(14)
(32)
Taxation
(1,000)
(215)
Net profit after tax attributable to shareholders
2,391
587
1EBITDA (earnings before interest, tax, depreciation and depletion, exploration expensed and impairment losses) and EBIT (earnings before
interest and tax) are non-IFRS measures that are presented to provide an understanding of the Group’s operations. The non-IFRS measures
are unaudited, however, the numbers have been extracted from the financial statements that have been subject to audit by the Company’s
auditor.
Share issues
There were no new shares issued in the financial year.
Earnings per share
The basic and diluted earnings per share for the Group from continuing operations was 0.21 € cents (2023:
0.05 € cents)
Operations
Selva Gas Field (63% PVO) - Selva Malvezzi Production concession
Selva is an onshore natural gas field located in the eastern part of the Po Plain, in the Bologna province of the
Emilia Romagna Region. The Selva Malvezzi Production Concession was awarded in July 2022 and measures
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
7
80.68km2. It includes the Podere Maiar Gas field (PM-1) (in production) and the gas prospects known as East
Selva, Selva North and South and Riccardina carved out from the former Podere Gallina Exploration Permit.
Po Valley Operations (100% subsidiary of the Company, “PVO”) is the operator under a Joint Operating
Agreement (“JOA”) and holds a 63% interest in the Selva Malvezzi Production Concession with Prospex Energy
Plc (“Prospex”) holding 37% (includes 20% held by Prospex subsidiary UOG Italia S.r.l).
Podere Maiar-1 (“PM-1”) gas facility and production:
The gas facility at PM-1 was completed in June 2023 and commenced production on 4th July 2023. The PM-1
development has a small footprint of less than one hectare and will have negligible emissions. The PM-1 facility
is a fully automated gas plant at the existing Podere Maiar 1dir well and a one-kilometer-long pipeline
connecting the well with the nearby Italian National Gas Grid, operated by SNAM.
Gas is sold under the gas sales agreement (GSA) with BP Gas Marketing Limited (BPGM). The gas supply price
in the contract is linked to Italy’s “Heren PSV day ahead mid” price. Robust gas prices were experienced over
the year due to strong market conditions.
Podere Maiar-1 (PM-1) Production
Results
Mar 2024
Quarter
Jun 2024
Quarter
Sept 2024
Quarter
Dec 2024
Quarter
Avg. daily production (scm) [gross]
69,976
74,904
76,910
79,596
Quarterly production ('000 scm) [net]
4,023
4,306
4,421
4,614
Weighted average price (per scm)
€ 0.30
€ 0.34
€ 0.39
€0.46
Revenue ('000) [net]
€ 1,201
€ 1,456
€ 1,737
€2,129
Field Operating costs ('000)1
€146
€174
€179
€162
Note: All figures in the table above, other than the daily production rate, are quoted on a net-63% share to PVE
1.Cash outflows field operating costs per quarter excludes accrued royalties
Production has been consistent throughout the period averaging ~80,000 scm per day, with exception of days
during which slick line operations were undertaken. The Group conducted several routine slick line operations
during the year to test pressure evolution and detect any sand or water buildup. There were no significant
discrepancies detected. To enhance monitoring capabilities, a surface sand detector was installed in the year.
During slick line operations in September, the Group took advantage of the short shutdown to conduct routine
maintenance of the plant and successfully replaced alumina in the plant regeneration columns.
Selva Malvezzi Prospects: Casale Guida 1d, Ronchi 1d, Bagnarola 1d, Selva Malvezzi 1d wells
The Selva Malvezzi Production Concession is the key area of focus for the Group with the next stages of
development at Selva North, South, Selva East and Riccardina prospects. The Group progressed its work
programs over these areas including the design, planning and permitting of a 3D seismic campaign over the
whole Selva Malvezzi Production concession area and in parallel proposed drilling program planning, surface
facility design and environmental studies of new wells at Casale Guida 1d (North Selva), Ronchi 1d (South
Selva), Selva Malvezzi 1d (East Selva) and Bagnarola 1d (Riccardina).
The drilling programs for the four new drilling projects at Casale Guida 1d (North Selva), Ronchi 1d (South
Selva), Selva Malvezzi 1d (East Selva) and Bagnarola 1d (Riccardina) were filed for drilling authorization to the
UNMIG department of the Italian Ministry of Environment and Energy Security (MASE) in September 2024. The
Environmental Impact Study for drilling, development and production of the four wells was submitted in
December 2024.
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
8
Planning and permitting for the 3D geophysical campaign across the entire Production Concession continued
to advance. The Group has successfully obtained Regional approval (INTESA) from the Emilia Romagna
Regional Council to commence its works under the planned 3D seismic campaign. This campaign covers the
entire Selva Malvezzi Production Concession Area and is an integral part of the ongoing development program
which envisages the drilling of 4 new wells. The granting of the Regional INTESA is an important step in the
authorisation process which will complete with the issuing of a formal Decree from the Ministry once all
documentation has been verified.
In anticipation of the INTESA, the Group has completed all preliminary works in relation to the design, planning
and permitting of the campaign. Now with the grant of the INTESA it will be able to commence the
formalisation of the permitting and agreements with landowners. As part of these preparatory activities, the
Group participated in constructive co-ordination meetings with the relevant farmers associations and has
worked closely with relevant representatives to ensure that all the planned activity aligns with industry best
practices.
The nature of the 3D seismic campaign and the technology that will be used is purposefully designed to ensure
that the environmental footprint is negligible and can be carried out quickly. The entire campaign is expected
to take no more than three weeks. Once the seismic has been acquired and then reprocessed the dataset will
be interpreted in-house.
The drilling programs, development plans, and environmental impact studies and works on the seismic
campaign constitute a significant amount of work carried out in less than 12 months and are a testament to
the commitment and dedication of the Group’s operations team.
Expenditure for the year on these work programs (net to the Group) were ~€399k, with continuing works
expected to complete in the first half of 2025.
Teodorico Offshore Gas field development (100% PVO)
The Teodorico gas field is located in shallow waters (approximately 30m deep) off the east coast in the
northern Adriatic Sea; the primary source of domestic gas production for much of Italy; and in close proximity
to existing east coast offshore gas production facilities. Teodorico has the largest gas-in-place of all of Po Valley
Energy’s gas fields and is at an advanced stage of assessment, ready for development. The Group holds a
preliminary production concession for this area.
In December 2023, the Italian government published a New Energy Decree in response to Italy’s energy
security needs which include measures to strengthen the production and security of domestic natural gas
supply. An accelerated permitting regime is envisaged as an integral part of this decree. The decree was
converted into law in February 2024. This law must be operationalised, and the Italian Government has
assigned this mandate to Gestiore Servizi Energetici “GSE”, an existing regulated body for energy in Italy.
In addition, a new Environmental Decree 2024 (Legislative Decree n.153/2024) (“Decree”) was published in
the Italian government’s Official Gazette on 17 October 2024. The Decree aims to provide regulatory certainty
for hydrocarbon exploration and production whilst balancing security of supply with environmental protection.
The Decree is particularly relevant to Teodorico.
The Decree provides allowances for the award of natural gas production concessions within a defined area of
the Adriatic Sea, if application had been made prior to the Decree’s enforcement and provided that the gas
reserves exceed 500 million cubic meters. The area defined as suitable for production includes the stretch
between the parallel passing through the mouth of the Goro branch of the Po River, the Po di Goro line, and
9
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
the parallel 15km to the south of the latter and with a distance of at least 9 nautical miles from the coastline.
Po Valley’s Teodorico project is exactly located within this defined area.
A recent administrative court ruling (TAR) on a case raised by an environmental protection group against the
Ministry indicated that the Environmental Impact Assessment (EIA) for Teodorico, originally granted in March
2021, must include an evaluation of the potential impacts on two newer environmentally protected
areas. These two areas, which primarily aim to protect marine life, were not officially established by the
Ministry of Environment when the original assessment for Teodorico was filed. As it happened, the
Environmental Impact Assessment Committee had approved the project without taking such potential
protected areas into consideration. The administrative court case claimed that the Ministry had been aware
that these areas had been under consideration, even if not yet officially recognized as protected, and
therefore found fault with the positive EIA opinion on the basis that it was not comprehensive. Under the
precautionary principle, the Administrative Court has ruled in favour of the environmental protection group(s).
The Group's tenure to the Teodorico project is not impacted by this ruling. The new Environmental Decree and
its intentions remain firm, that is, provision for allowances for the award of natural gas production
concessions in the area in which Teodorico is located. By means of clarification, all projects which fall within
the defined area of the Adriatic Sea referred in the new Environmental Decree 2024 are still subject to an
environmental impact assessment which not only reviews suitability but also results in a list of
precautionary measures and guidance for project operators to ensure that best practices for development
are upheld.
In terms of next steps, the Company has reached out to the Ministry of Environment and Energy Security to
determine the best way forward. The Administrative Court ruling used wording that implies that the rest of
the Environmental Impact Assessment retains its legal standing, however and the Group expects to renew the
Environmental Impact Study previously submitted taking the two new areas into consideration in accordance
with the Ministry’s requirements.
Torre del Moro, Cadelbosco di Sopra and Grattasasso exploration licences (100% PVO)
Cadelbosco di Sopra and Grattasasso are shallow gas opportunities which fit neatly with the Group’s
proven exploration and development capabilities whilst Torre del Moro is a large deep gas prospect. Following
a recent meeting with MASE in February 2025 and with the 2024 Environmental Decree repealing the
previous plan of suitable hydrocarbon exploitation areas ‘PITESAI’ , it has been clarified that activities
regarding oil exploration may resume. Accordingly, the Cadelbosco and Grattasasso oil contingent
resources and Torre del Moro oil prospective resources can be restated the Po Valley’s Resources and
Reserves, as originally reported in the April 2019 CGG CPR.
The Group is reviewing optimal development paths for these assets including introduction of third-party
investors/partners who have interest in participating in their development.
Health, safety and environment
Paramount to Po Valley’s ability to pursue its strategic priorities is a safe workplace and a culture of safety first.
The Group regards environmental awareness and sustainability as key strengths in planning and carrying out
business activities. Po Valley’s daily operations are conducted in a way that adheres to these principles and
management is committed to their continuous improvement. Whilst growing from exploration roots, the
Group has strived to continually improve underlying safety performance. The Group has adopted an HSE
Management System which provides for a series of procedures and routine checks (including periodical audits)
to ensure compliance with all legal and regulatory requirements and best practices in this area. In 2024, the
Group maintained its outstanding occupational health safety and environmental track record with no incidents
or near misses to report.
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
10
Principal risks and uncertainties
Oil and gas exploration and appraisal involves significant risk. The future profitability of the Group and the
value of the Company’s shares are directly related to the results of exploration and appraisal activities. There
are inherent risks in these activities. No assurances can be given that funds spent on exploration and appraisal
will result in discoveries that will be commercially viable. Future exploration and appraisal activities, including
drilling and seismic acquisition, may result in changes to current perceptions of individual prospects, leads and
permits.
The Group identifies and assesses the potential consequences of strategic, safety, environmental, operational,
legal, reputational and financial risks in accordance with the Group’s risk management policy. Po Valley
management continually monitors the effectiveness of the Group’s risk management, internal compliance and
control systems which includes insurance coverage over major operational activities, and reports to the Board
on areas where there is scope for improvement. The Board as a whole is responsible for oversight of the
Group’s risk management and control system. The principal risks and uncertainties that could materially affect
PVE’s future performance are described below.
External risks
Exposure to gas
pricing
Volatile gas prices make it difficult to predict future price movements with any
certainty. Decline in gas prices could have an adverse effect on PVE. The Group does
not currently hedge its exposures to gas price movements long term. The
profitability of the Group’s prospective gas assets will be determined by the future
market for domestic gas. Gas prices can vary significantly depending on other
European gas markets, worldwide supply and the terms under which long term take
or pay arrangements are agreed.
Changes to law,
regulations or
Government policy
Changes in laws and regulations or government policy may adversely affect PVE’s
business. Examples include changes to land access or the introduction of legislation
that restricts or inhibits exploration and production.
Similarly changes to direct or indirect tax legislation may have an adverse impact
on the Group’s profitability, net assets and cash flow.
Uncertainty of timing
of regulatory
approvals
Delays in the regulatory process could hinder the Group’s ability to pursue
operational activities in a timely manner including drilling exploration and
development wells, installing infrastructure, and to producing gas. In particular, oil
and gas operations in Italy are subject to both Regional and Federal approvals.
Operating risks
Exploration,
development and
production
The future value of PVE will depend on its ability to find, develop, and produce gas
that is economically recoverable. The ultimate success or otherwise of such
ventures requires successful exploration, establishment of commercial reserves,
establishment of and successful effective production from processing facilities, and
transport and marketing of the end product. Through this process, the business is
exposed to a wide variety of risks, including failure to locate hydrocarbons, changes
to reserve estimates or production volumes, variable quality of hydrocarbons,
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
11
weather impacts, facility malfunctions, lack of access to appropriate skills or
equipment and cost overruns.
Estimation of
reserves
The estimation of oil and natural gas reserves involves subjective judgments and
determinations based on geological, technical, contractual and economic
information. It is not an exact calculation. The estimate may change because of new
information from production or drilling activities.
Tenure security
Exploration licences held by PVE are subject to the granting and approval by
relevant government bodies. Government regulatory authorities generally require
the holder of the licences to undertake certain proposed exploration commitments
and failure to meet these obligations could result in forfeiture. Exploration licences
are also subject to partial or full relinquishments after the stipulated period of
tenure if no alternative licence application (e.g., production concession application)
is made, resulting in a potential reduction in the Group’s overall tenure position. In
order for production to commence in relation to any successful oil or gas well, it is
necessary for a production concession to be granted.
Health, safety and
environmental
matters
Exploration, development and production of oil and gas involves risks which may
impact the health and safety of personnel, the community and the environment.
Industry operating risks include fire, explosions, blow outs, pipe failures,
abnormally pressured formations and environmental hazards such as accidental
spills or leakage of petroleum liquids, gas leaks, ruptures, or discharge of toxic
gases. Failure to manage these risks could result in injury or loss of life, damage or
destruction of property and damage to the environment. Losses or liabilities arising
from such incidents could significantly impact the Group’s financial results.
Climate Change
PVE recognises climate-related risks and the need for these to be managed
effectively particularly across the energy industry.
Key climate-related risks and opportunities relevant to PVE’s operations include:
•
The transition to a low carbon economy through technological
improvements and innovations that support a lower carbon energy
efficient system with decreased demand and changing community
sentiment for fossil fuels. In addition, there may be increased uncertainty,
time and cost associated with regulatory bodies granting approvals or
licences on fossil fuel intensive projects. Transition to a lower carbon
economy may also give rise to opportunity for PVE’s potential gas
production assets. Natural gas is viewed as a key element to supporting a
sustainable energy transition. Possibility to produce Blue H2 (with
CCS/CCUS) and/or LNG from PVO gas fields (utilising access and support via
EU or Italian research development funds).
•
Physical changes caused by climate change include increased severe
weather events and chronic changes to weather patterns which may
impact demand for energy and PVE’s development and production assets
and production capability. These events could have a financial impact on
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
12
the Group through increased operating costs, maintenance costs, revenue
generation and sustainability of production assets.
•
Policy changes by governments which may result in increasing regulation
and costs which could have a material impact on PVE’s operations.
PVE is committed to continually improve climate change related disclosures as
processes and understanding of climate change related matters improve alongside
its activities and operations.
In addition to the external and operating risks described above, the Group’s ability to successfully develop
future projects including their infrastructure is contingent on the Group’s ability to fund those projects through
operating cash flows and affordable debt and equity raisings.
6. Dividends
No dividends have been paid or declared by the Company during the year ended 31 December 2024.
7. Significant events after balance date
There were no events between the end of the financial year and the date of this report that, in the opinion of
the Directors, will affect significantly the operations of the Group, the results of those operations, or the state
of affairs of the Group in future financial years.
8. Likely Developments
With strong production ongoing at the Podere Maiar-1 well, the Group will continue to invest in its current
exploration portfolio through geological and geophysical studies and, subject to available finance, in its
planned drilling program for high potential gas prospects. The Group may seek a suitable farm-out partner for
selected assets.
9. Environmental Regulation
The Group’s operations are subject to environmental regulations under both national and local municipality
legislation in relation to its mining exploration and development activities in Italy. Group management
monitors compliance with the relevant environmental legislation. The Directors are not aware of any breaches
of legislation during the period covered by this report.
10. Remuneration Report - audited
The Remuneration Report outlines the remuneration arrangements which were in place during the year, and
remain in place as at the date of this report, for the Directors and other Key Management Personnel of the
Group.
Remuneration Policy
The Board is responsible for reviewing and recommending compensation arrangements for the Directors, the
Chief Executive Officer and the senior executive team. The Board assesses the appropriateness of the size and
structure of remuneration of those officers on a periodic basis, with reference to relevant employment market
conditions, with the overall objective of ensuring maximum stakeholder benefit from the retention of a high
quality board and executive team.
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
13
The Group aims to ensure that the level and composition of remuneration of its Directors and executives is
sufficient and reasonable in the context of the internationally competitive industry in which the Group
operates.
For senior executives based in Rome, the Board the Board will have regard to remuneration levels and benefit
arrangements that prevail in the European oil and gas industry when setting remuneration which remains
highly competitive.
Consequences of performance on shareholder wealth
In considering the Group’s performance and benefits for shareholders’ wealth the Board has regard to the
following indices in respect of the current and previous financial years.
Indices
2024
2023
2022
2021
2020
Production (Mcm) (net)
17,364
6,198
-
-
-
Average realised gas price (€ cents per
cubic metre)
38
38
-
-
-
Profit / (Loss) attributable to owners of
the Company (€'000s)
2,391
587
(984)
(596)
(1,036)
Earnings / (loss) per share (€ cents per
share)
0.21
0.05
(0.09)
(0.07)
(0.16)
Share price at year end - AU$
0.04
0.046
0.062
0.025
0.030
In establishing performance measures and benchmarks to ensure incentive plans are appropriately structured
to align corporate behaviour with the long-term creation of shareholder wealth, the Board has regard for the
stage of development of the Company’s business and gives consideration to each of the indices outlined above
and other operational and business development achievements of future benefit to the Company which are
not reflected in the aforementioned financial measures.
Senior Management, Executives and Executive Directors
The remuneration of Po Valley’s senior management and executives is based on a combination of fixed salary,
short term incentive bonuses which are based on performance, and in some cases a long term incentive which
may be payable in cash or shares. Other benefits may include employment insurances, accommodation and
other benefits, and superannuation contributions. In determining bonus payments, the board assesses the
performance and contribution of executives against a series of objectives defined at the beginning of the year.
These objectives are a combination of strategic and operational company targets which are considered critical
to shareholder value creation and objectives which are specific to the individual executive. More specifically,
objectives mainly refer to operating performance from both a financial and technical standpoint and growth
and development of the Group’s asset base. The Board exercises its discretion when determining awards and
exercises discretion having regard to the overall performance and achievements of the Group and of the
relevant executive during the year. No remuneration consultants were used during the current or previous
year.
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
14
Non-Executive Directors
The remuneration of Po Valley’s Non-Executive Directors comprises cash fees. There is no current scheme to
provide performance-based bonuses or retirement benefits to Non-Executive Directors. The Board of Directors
and shareholders approved the maximum agreed remuneration pool for Non-Executive Directors at €250,000
per annum.
Service contracts
The major provisions of the service contracts held with the directors, in addition to any performance related
bonuses and/or options are as follows:
Kevin Bailey AM, Chairman
•
Commencement Date: 3 May 2016
•
Remuneration for the year ended 31 December 2024: €45,841 (A$75,000)
•
Annual remuneration at date of this report is A$75,000
•
No termination benefits
Sara Edmonson, Non-Executive Director
•
Commencement Date: 23 December 2019
•
Fixed remuneration for the year ended 31 December 2024: €30,460 (A$50,000)
•
Annual remuneration at date of this report is A$50,000
•
No termination benefits
Joseph Constable, Non-Executive Director
•
Commencement Date: 30 November 2021
•
Fixed remuneration for the year ended 31 December 2024: €30,576 (A$50,000 p.a.)
•
Annual remuneration at date of this report is A$50,000
•
No termination benefits
Katrina O’Leary, Non-Executive Director
•
Commencement Date: 2 May 2022
•
Fixed remuneration for the year ended 31 December 2024: €30,543 (A$50,000 p.a.)
•
Annual remuneration at date of this report is A$50,000
•
No termination benefits
Michael Gentile, Non-Executive Director
•
Commencement Date: 25 November 2024
•
Fixed remuneration for the year ended 31 December 2024: €3,000 (A$5,192 p.a.)
•
Annual remuneration at date of this report is A$50,000
•
No termination benefits
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
15
The Non-Executive Directors are not appointed for any fixed term but rather are required to retire and stand
for re-election in accordance with the Company’s constitution and the ASX Listing Rules.
Key Management Personnel remuneration outcomes
The remuneration details of each Key Management Personnel (KMP) (being the Directors) during the year is
presented in the table below:
Director fees
Other
Termination
payments
Total
€
€
€
€
K Bailey AM
Non-Executive
2024
45,841
-
-
45,841
2023
35,299
-
-
35,299
S Edmonson
Non-Executive
2024
30,460
47,355*
-
77,815
2023
27,515
-
-
27,515
J Constable
Non-Executive
2024
30,576
-
-
30,576
2023
27,533
-
-
27,533
K O’Leary
Non-Executive
2024
30,543
-
-
30,543
2023
27,553
-
-
27,553
M Gentile
Non-Executive (appointed 25 November 2024)
2024
3,000
-
-
3,000
2023
-
-
-
-
Total for Directors
2023
140,420
47,355
-
187,775
2023
117,900
-
-
117,900
*Fees in relation to consultancy services provided during the financial year
Analysis of bonuses included in remuneration
There was no short-term incentive bonuses awarded to KMP in the current year.
Options over equity instruments granted as compensation
No options were granted as compensation to KMP during the reporting period (2023: Nil). There are no options
granted to KMP that vested during 2024. (2023: Nil)
Modification of terms of equity-settled share-based payment transactions
No terms of equity-settled share-based payment transactions (including options and rights granted as
compensation to KMP) have been altered or modified during the reporting period or the prior period.
Exercise and lapse of options granted as compensation
No options over ordinary shares in the Company were held by any KMP during 2024 and no options were
exercised or lapsed during 2024.
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
16
Equity holdings and transactions
The movement during the reporting period in the number of ordinary shares of the Company, held directly
and indirectly by KMP, including their personally related entities is as follows:
31December 2024
Held at
31 Dec 2023
Held at date
of
appointment
Acquired
Held at
31 Dec 2024
Directors
K Bailey AM
275,710,969
-
19,608,313
295,319,282
S. Edmonson
3,708,007
-
-
3,708,007
J Constable
402,575
-
527,777
930,352
K O’Leary
-
-
-
-
M Gentile
-
(i)40,549,300
200,000
40,749,300
Total
279,821,551
40,549,300
20,336,090
340,706,941
(i)
(i)Holding at date of appointment 25 November 2024
31 December 2023
Held at
31 Dec 2022
Held at date
of
appointment
Acquired
Held at
31 Dec 2023
Directors
K Bailey AM
274,378,670
-
1,332,299
275,710,969
S. Edmonson
3,708,007
-
-
3,708,007
J Constable
402,575
-
-
402,575
K O’Leary
-
-
-
-
Total
278,489,252
-
1,332,299
279,821,551
(ii)
Other transactions and balances with KMP and their related parties
Sara Edmonson provided consultancy services during the year in addition to her services as non-executive
Director. Fees paid during the year amounted to €47,355 and are based on time occupied at market rates.
There are no other transactions during the year or material balances with KMPs or related parties at the
balance date.
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
17
11. Directors’ interests
At the date of this report, the direct and indirect interests of the current Directors in the shares of the
Company, as notified by the Directors to the ASX in accordance with S205G (1) of the Corporations Act 2001,
are as follows:
Ordinary Shares
K Bailey AM
295,319,282
S Edmonson
3,708,007
J Constable
930,352
K O’Leary
-
M Gentile
40,749,300
12. Equity securities on issue
31 December 2024
31 December 2023
Ordinary fully paid shares
1,158,961,620
1,158,961,620
Options over unissued shares
-
7,500,000
Unissued shares under option and performance rights
No options or performance rights were granted during the year (2023: None)
At the date of this report there are no unissued ordinary shares of the Company under option or
performance rights.
Options
During the year, 7,500,000 options with an exercise price of A$0.10 expired on 30 June 2024 unexercised.
Performance rights
There are no unissued ordinary shares of the Company under performance rights.
No options or performance rights were cancelled during or subsequent to the financial year.
Shares issued on exercise of options and performance rights
No shares were issued on exercise of options or performance rights in the year.
Options granted to directors and executives of the Company
The Company has not granted any options over unissued ordinary shares in the Company to any directors or
specified executive during or since the end of the financial year.
13. Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of
Po Valley support and have adhered to the principles of sound corporate governance. The Board recognises
the recommendations of the ASX Corporate Governance Council and considers that Po Valley is in compliance
with those guidelines which are of importance to the commercial operation of a junior listed resource
company.
PO VALLEY ENERGY LIMITED
DIRECTORS’ REPORT
18
The Group has elected to publish its Statement of Corporate Governance Practices on its website
www.povalley.com. In addition, each year the Key to Disclosures - Corporate Governance Council Principles
and Recommendations will be available to shareholders at the same time that the Annual Report is released.
14. Indemnification and insurance of officers
The Group has agreed to indemnify current Directors against any liability or legal costs incurred by a Director
as an officer of the Company or entities within the Group or in connection with any legal proceeding involving
the Company or entities within the Group which is brought against the Director as a result of his capacity as an
officer.
During the financial year the Group paid premiums to insure the Directors against certain liabilities arising out
of the conduct while acting on behalf of the Group. Under the terms and conditions of the insurance contract,
the nature of liabilities insured against and the premium paid cannot be disclosed.
15. Indemnification of auditors
The Group has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor
of the Company or any related entity against a liability incurred by the auditor. The Group has not provided
any insurance for an auditor of the Company.
16. Non audit services
During the year HLB Mann Judd, the Group’s auditor, did not provide non-audit services. Refer to note 8 of
the financial report for details of the auditor’s remuneration.
17. Proceedings on behalf of the Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the
purpose of taking responsibility on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under
section 237 of the Corporations Act 2001.
18. Lead Auditor’s independence declaration
The lead auditor’s independence declaration is set out on page 19 and forms part of the Directors’ report for
the financial year ended 31 December 2024.
This report has been made in accordance with a resolution of Directors.
Kevin Bailey AM
Chairman
27 March 2025
•
19
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Po Valley Energy Limited for the
year ended 31 December 2024, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
27 March 2025
L Di Giallonardo
Partner
PO VALLEY ENERGY LIMITED
20
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
CONSOLIDATED
NOTES
2024
€
2023
€
Continuing Operations
Revenue from contracts with customers
4
6,524,036
2,337,315
Cost of sales
5
(744,691)
(308,905)
Royalties payable
(630,500)
-
Depreciation and amortisation expense –
production assets
5
(532,206)
(189,969)
Gross profit
4,616,639
1,838,441
Other income
173,971
267,900
Employee benefit expenses
Depreciation expense
Corporate overheads
6
7
(784,517)
(27,205)
(533,851)
(565,441)
(27,348)
(572,154)
Profit from operating activities
3,445,037
941,398
Finance income
Finance expense
425
(54,063)
8,221
(148,428)
Net finance expense
9
(53,638)
(140,207)
Profit before tax
3,391,399
801,191
Income tax expense
10
(1,000,248)
(214,534)
Profit for the year
2,391,151
586,657
Other comprehensive income
-
-
Total comprehensive income for the year
2,391,151
586,657
Basic and diluted earnings share (€) from
continuing operations
11
0.21
0.05
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
to the financial statements.
PO VALLEY ENERGY LIMITED
21
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
CONSOLIDATED
NOTES
2024
€
2023
€
Current Assets
Cash and cash equivalents
Trade and other receivables
12
13
4,993,913
1,107,553
1,252,717
691,719
Total Current Assets
6,101,466
1,944,436
Non-Current Assets
Inventory – non-current
Other assets
Deferred tax assets
Property, plant & equipment
Resource property costs
16
14
15
33,438
4,678
115,676
1,923,097
9,998,987
11,325
4,678
937,831
2,067,623
9,975,367
Total Non-Current Assets
12,075,876
12,996,824
Total Assets
18,177,342
14,941,260
Current Liabilities
Trade and other payables
Lease liabilities
Provisions
17
19
18
1,126,932
24,851
2,974
296,251
24,851
4,557
Total Current Liabilities
1,154,757
325,659
Non-Current Liabilities
Provisions
Lease liabilities
18
19
1,014,361
76,549
974,991
100,086
Total Non-Current Liabilities
1,090,910
1,075,077
Total Liabilities
2,245,667
1,400,736
Net Assets
15,931,675
13,540,524
Equity
Issued capital
Reserves
Accumulated losses
20
20
56,847,751
1,192,269
(42,108,345)
56,847,751
1,299,983
(44,607,210)
Total Equity
15,931,675
13,540,524
The above statement of financial position should be read in conjunction with the accompanying notes to the financial statements.
PO VALLEY ENERGY LIMITED
22
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Attributable to equity holders of the Company
Consolidated
Issued capital
Translation
Reserve
Share Based
Payment
Reserve
Accumulated
Losses
Total
€
€
€
€
€
Balance at 1 January 2023
56,632,102
1,192,269
179,626
(45,204,554)
12,799,443
Profit for the year
-
-
-
586,657
586,657
Other comprehensive income
-
-
-
-
Total comprehensive income
-
-
-
586,657
586,657
Issue of securities (net of costs)
154,424
-
-
-
154,424
Transfers within equity
61,225
-
(71,912)
10,687
-
Balance at 31 December 2023
56,847,751
1,192,269
107,714
(44,607,210)
13,540,524
Balance at 1 January 2024
56,847,751
1,192,269
107,714
(44,607,210)
13,540,524
Profit for the year
-
-
-
2,391,151
2,391,151
Other comprehensive income
-
-
-
-
Total comprehensive income
-
-
-
2,391,151
2,391,151
Issue of securities (net of costs)
-
-
-
-
-
Options expired
-
-
(107,714)
107,714
-
Balance at 31 December 2024
56,847,751
1,192,269
-
(42,108,345)
15,931,675
The above statement of changes in equity should be read in conjunction with the accompanying notes to the financial statements.
PO VALLEY ENERGY LIMITED
23
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
The above statement of cash flows should be read in conjunction with the accompanying notes to the financial statements.
NOTES
CONSOLIDATED
2024
€
2023
€
Operating activities
Receipts from customers
6,116,710
1,985,315
Receipts from joint operation partners (operations)
187,819
283,831
Payments to suppliers and employees
(2,020,821)
(1,537,220)
Interest received
425
8,221
Interest paid
(3,318)
(741)
Taxes paid
(76,428)
-
Net cash from operating activities
12
4,204,387
739,406
Investing activities
Payments for property plant and equipment
(22,201)
(36,194)
Payments for resource property costs (net of joint
operation partner recoveries)
(405,094)
(1,556,500)
Refund of guarantee deposit for pipeline tie-in
-
476,910
Net cash used in investing activities
(427,295)
(1,115,784)
Financing activities
Proceeds from the issues of shares
-
155,710
Payment of share issue costs
-
(1,286)
Payments of lease liabilities
(28,700)
(27,868)
Net cash (used in) / from financing activities
(28,700)
126,556
Net increase / (decrease) in cash and cash
equivalents
3,748,392
(249,822)
Cash and cash equivalents at 1 January
1,252,717
1,536,041
Exchange difference on cash and cash equivalents
(7,196)
(33,502)
Cash and cash equivalents at 31 December
12
4,993,913
1,252,717
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
24
NOTE 1:
SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
REPORTING ENTITY
Po Valley Energy Limited (“the Company” or “PVE”) is a listed public company domiciled in Australia.
The consolidated financial report for the year ended 31 December 2024 comprises the Company and
its subsidiaries (together referred to as “the Group” and individually as “Group entities”) and the
Group’s interest in associates and jointly controlled entities and operations.
The following is a summary of the material accounting policies adopted by the Group in the
preparation of the financial report. The accounting policies have been consistently applied, unless
otherwise stated.
(a) BASIS OF PREPARATION
The financial report is a general purpose financial report, which has been prepared in accordance with
the requirements of the Corporations Act 2001, and Australian Accounting Standards and
Interpretations. The financial report has also been prepared on an historical cost basis, unless
otherwise stated.
The consolidated financial statements are presented in Euro, which is the Company’s and each of the
Group entities’ functional currency.
For the purpose of preparation of the consolidated financial statements the Company is a for-profit
entity.
Adoption of New and Revised Standards – Changes in accounting policies on initial application of
accounting standards
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current
reporting period. The adoption of these Accounting Standards and Interpretations did not have any
significant impact on the financial performance or position of the Group during the financial year.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory
have not been early adopted by the Group for the reporting year ended 31 December 2024. There are
no material new or amended Accounting Standards which will materially affect the Group
(b) STATEMENT OF COMPLIANCE
The financial report was authorised for issue on 27 March 2025.
The financial report complies with Australian Accounting Standards, which include Australian
equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures
that the financial report, comprising the financial statements and notes thereto, complies with
International Financial Reporting Standards (IFRS).
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
25
(c) PRINCIPLES OF CONSOLIDATION
(i)
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. The financial statements of subsidiaries are included
in the consolidated financial statements from the date that control commences until the date that
control ceases. The accounting policies of subsidiaries have been changed when necessary, to align
them with the policies adopted by the Group. Investments in subsidiaries are carried at cost less any
impairment losses.
In the Company’s separate financial statements, investments in subsidiaries are carried at cost less
any impairment losses.
(ii)
Joint arrangements
The Group classifies its interests in joint arrangements as either joint operations or joint ventures (see
below) depending on the Group’s rights to the assets and obligation for the liabilities of the
arrangements. When making this assessment, the Group considers the structure of the arrangements,
the legal form of any separate vehicles, the contractual terms of the arrangements and other facts and
circumstances.
Joint operation - when the Group has rights to the assets, and obligations for the liabilities, relating to
an arrangement, it accounts for each of its assets, liabilities and transactions, including its share of
those held or incurred jointly, in relation to the joint operation.
Joint venture – when the Group has rights only to the net assets of the arrangement, it accounts for
its interest using the equity method adopted for associates.
(iii)
Transactions eliminated on consolidation
Intra-group balances, and any unrealised income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
(d) TAXATION
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or
loss except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity or in comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantially enacted at the balance date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is provided using the liability method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. The following temporary differences are not provided for: the initial recognition of
assets or liabilities that affect neither accounting nor taxable profit; and differences relating to
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
26
investments in subsidiaries to the extent that the Group is able to control the timing of the reversal of
the temporary difference and it is probable that they will not reverse in the foreseeable future. The
amount of deferred tax provided is based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities using tax rates enacted at the balance date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will
be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that
it is no longer probable that the related tax benefit will be realised.
Judgement is required to determine which arrangements are considered to be a tax on income as
opposed to an operating cost. Judgement is also required to determine whether deferred tax assets
are recognised in the statement of financial position. Deferred tax assets, including those arising from
unutilised tax losses, require management to assess the likelihood that the Group will generate
sufficient taxable earnings in future periods, in order to utilise recognised deferred tax assets.
Assumptions about the generation of future taxable profits depend on management’s estimates of
future cash flows. These estimates of future taxable income are based on forecast cash flows from
operations (which are impacted by production and sales volumes, oil and natural gas prices, reserves,
operating costs, decommissioning costs, capital expenditure, dividends and other capital management
transactions) and judgement about the application of existing tax laws in each jurisdiction. To the
extent that future cash flows and taxable income differ significantly from estimates, the ability of the
Group to realise the net deferred tax assets recorded at the reporting date could be impacted.
In addition, future changes in tax laws in the jurisdictions in which the Group operates could limit the
ability of the Group to obtain tax deductions in future periods.
(e) IMPAIRMENT
Non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset (or CGU) may
be impaired. Management has assessed its CGUs as being an individual field, which is the lowest level
for which cash inflows are largely independent of those of other assets. If any indication exists, or
when annual impairment testing for an asset is required, the Group estimates the asset’s or CGU’s
recoverable amount. The recoverable amount is the higher of an asset’s or CGU’s fair value less costs
of disposal (FVLCD) and value in use (VIU). The recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or groups of assets, in which case the asset is tested as part of a larger CGU to which it
belongs. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the
asset/CGU is considered impaired and is written down to its recoverable amount.
In calculating VIU, the estimated future cash flows are discounted to their present value using an
after-tax discount rate (10%) that reflects current market assessments of the time value of money
and the risks specific to the asset/CGU.
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
27
The Group bases its impairment calculation on detailed budgets and forecasts, which are prepared
separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets
and forecasts generally cover the forecasted life of the CGUs. VIU does not reflect future cash flows
associated with improving or enhancing an asset’s performance.
Impairment losses of continuing operations, including impairment of inventories, are recognised in
the statement of profit or loss and other comprehensive income in those expense categories
consistent with the function of the impaired asset.
For assets/CGUs, an assessment is made at each reporting date to determine whether there is an
indication that previously recognised impairment losses may no longer exist or may have decreased.
If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously
recognised impairment loss is reversed only if there has been a change in the assumptions used to
determine the asset’s/CGU’s recoverable amount since the last impairment loss was recognised. The
reversal is limited so that the carrying amount of the asset/CGU does not exceed either its
recoverable amount, or the carrying amount that would have been determined, net of
depreciation/amortisation, had no impairment loss been recognised for the asset/CGU in prior years.
Such a reversal is recognised in the statement of profit or loss and other comprehensive income.
(f) PROPERTY, PLANT AND EQUIPMENT
(i)
Recognition and measurement
Items of property, plant and equipment are recorded at cost less accumulated depreciation,
accumulated impairment losses and pre-commissioning revenue and expenses.
The cost of plant and equipment used in the process of gas extraction are accounted for separately
and are stated at cost less accumulated depreciation and impairment costs.
Cost includes expenditure that is directly attributable to acquisition of the asset.
Gains and losses on disposal of an item of property, plant and equipment are determined by
comparing the proceeds from disposal with the carrying amount of property, plant and equipment
and are recognised within “other income” in profit or loss.
(ii)
Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits
associated with expenditure will flow to the Group.
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
28
(iii)
Depreciation
Gas producing assets
When the gas plant and equipment in installed ready for use, costs carried forward will be
depreciated using the units-of-production method (“UOP”) over the life of the economically
recoverable reserve (Proved plus Probable (2P)) from date of commencement of production.
The depreciation rate of gas plant and equipment used in the period of each project in production
is as follows:
2024
2023
Podere Maiar -1
7.47%
2.6%
The life of each item, is assessed at least annually, has regard to both its physical life limitations and
present assessments of economically recoverable reserves of the field at which the asset is located.
These calculations require the use of estimates and assumptions, including the amount of
recoverable reserves and estimates of future capital expenditure. The calculation of the UOP rate
of depreciation / amortisation will be impacted to the extent that actual production in the future is
different from current forecast production based on total proved reserves , or future capital
expenditure estimate changes.
Other property, plant and equipment
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of
each part of an item of property, plant and equipment, unless a units of production method
represents a more reasonable allocation of the assets depreciable value over its economic useful
life. The depreciation will commence when the asset is installed ready for use.
The estimated useful lives of each class of asset fall within the following ranges:
2024
2023
Office furniture & equipment
3 – 5 years
3 – 5 years
Right-of-use assets: buildings
6 years
6 years
The residual value, the useful life and the depreciation method applied to an asset are reviewed at
each reporting date.
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
29
(g) RESOURCE PROPERTIES
Exploration properties
Exploration properties are carried at cost less accumulated impairment losses. Exploration properties
include the cost of acquiring resource properties, mineral rights and exploration and evaluation
expenditure incurred subsequent to acquisition of an area of interest.
Exploration properties are carried forward where right of tenure of the area of interest is current and
they are expected to be recouped through sale or successful development and exploitation of the
area of interest, or, where exploration and evaluation activities in the area of interest have not yet
reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves and active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine
technically feasibility and commercial viability or facts and circumstances suggest that the carrying
value amount exceeds the recoverable amount.
Exploration and evaluation assets are tested for impairment when any of the following facts and
circumstances exist:
•
The term of the exploration license in the specific area of interest has expired during the
reporting period or will expire in the near future, and is not expected to be renewed;
•
Substantive expenditure on further exploration for an evaluation of mineral resources in the
specific area are not budgeted nor planned;
•
Exploration for and evaluation of mineral resources in the specific area have not led to the
discovery of commercially viable quantities of mineral resources and the decision was made
to discontinue such activities in the specific area; or
•
Sufficient data exists to indicate that, although a development in the specific area is likely to
proceed, the carrying amount of the exploration and evaluation asset is unlikely to be
recovered in full from successful development or by sale.
Areas of interest which no longer satisfy the above policy are considered to be impaired and are
measured at their recoverable amount, with any subsequent impairment loss recognised in the profit
and loss.
Where a decision is made to proceed with development in respect of a particular area of interest,
the relevant exploration and evaluation asset is tested for impairment and the balance is then
reclassified to development.
Development properties
Development properties are carried at balance date at cost less accumulated impairment losses.
Development properties represent the accumulation of all exploration, evaluation and acquisition
costs in relation to areas where the technical feasibility and commercial viability of the extraction of
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
30
gas resources in the area of interest are demonstrable and all key project permits, approvals and
financing are in place.
When there is low likelihood of the development property being exploited, or the value of the
exploitable development property has diminished below cost, the asset is written down to its
recoverable amount.
Production properties
Production properties are carried at balance date at cost less accumulated amortisation and
accumulated impairment losses. Production properties represent the accumulation of all
exploration, evaluation and development and acquisition costs in relation to areas of interest in
which production licences have been granted and the related project has moved to the production
phase.
Depletion charges are calculated to amortise the depreciable value of carried forward exploration,
evaluation and subsurface development expenditure of production properties over the life of the
Proved plus Probable (2P) reserves for a hydrocarbon reserve, together with future subsurface
costs necessary to develop the respective hydrocarbon reserve.
Amortisation of costs is provided on the unit-of-production basis (UOP), separate calculations being
performed for each area of interest. The UOP base results in an amortisation charge proportional to
the depletion of economically recoverable reserves. The amortisation rate used in the period for
each project in the production phase is as follows:
2024
2023
Podere Maiar -1
7.47%
2.6%
Amortisation of resource properties commences from the date when commercial production
commences. When the value of the exploitable production property has diminished below cost, the
asset is written down to its recoverable amount.
The Group reviews the recoverable amount of resource property costs at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the
asset’s recoverable amount is estimated (refer Note 1 (e)).
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
31
(h) PROVISIONS
Restoration and rehabilitation costs
Long term environmental obligations are based on the Group’s environmental and rehabilitation
plans, in compliance with current environmental and regulatory requirements.
Full provision is made based on the net present value of the estimated cost of restoring the
environmental disturbances that have occurred up to the date of the statement of financial position
in respect of the eventual abandonment of well sites in development or in production and production
fields. Increases due to additional environmental disturbances relating to the development of an
asset are capitalised and recorded in resource property costs, and amortised over the remaining
useful lives of the areas of interest. The net present value is determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of the time value of
money and risks specific to the liability.
Annual increases in the provision relating to the unwinding of the discount rate are accounted for in
the statement of profit or loss and other comprehensive income as finance expense.
The estimated costs of rehabilitation are reviewed annually and adjusted against the relevant
rehabilitation asset, as appropriate for changes in legislation, technology or other circumstances
including drilling activity and are accounted for on a prospective basis. Cost estimates are not
reduced by potential proceeds from the sale of assets.
(i) CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand, deposits held at call with financial institutions,
other short-term, highly liquid investments with original maturities of three months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes
in value.
(j) REVENUE
Revenue is measured at the fair value of the consideration received or receivable, net of the amount
of value added tax (“VAT”) payable to the taxation authority or similar taxes. Revenue is recognised
when the significant risks and rewards of ownership have been transferred to the buyer, recovery of
the consideration is probable, the associated costs can be estimated reliably, there is no continuing
management involved with the goods, and the amount of revenue can be measured reliably.
Revenue from contracts with customers – gas sales
Gas sales revenue is recognised based on volume sold under contract with customers at the point in
time where performance obligations are considered met. Generally, for the sale of gas, the
performance obligation will be met when control of the gas passes at the delivery point. Gas sales
are based on market prices under contractual arrangement, at the time of the delivery, there is only
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
32
minimal risk of change in transaction price to be allocated to the product sold. Accordingly, at the
point of sale there is no significant risk of revenue reversal relative to the cumulative revenue
recognised, there is no constraining of variable consideration.
During the current and previous year, 100% of the gas sales revenue were from one customer.
Proceeds received in advance of control passing are recognised as contract liability for deferred
revenue. Deferred revenue liabilities unwind as revenue from contracts with customers, upon
satisfaction of the performance obligation.
(k) EMPLOYEE BENEFITS
(i)
Long-term service benefits
The Group’s net obligation in respect of long-term service benefits is the amount of future benefit
that employees have earned in return for their service in the current and prior periods. The
obligation is calculated using expected future increases in wage and salary rates including on-costs
and expected settlement dates, and is discounted using the rates attached to the Government bonds
at the balance date which have maturity dates approximating to the terms of the Group’s obligations.
(ii)
Wages, salaries, annual leave, sick leave and non-monetary benefits
Liabilities for employee benefits for wages, salaries, annual leave and sick leave that are expected to
be settled within 12 months of the reporting date represent present obligations resulting from
employees’ services provided to reporting date, are calculated at undiscounted amounts based on
remuneration wage and salary rates that the Group expects to pay as at reporting date including
related on-costs, such as workers compensation insurance and payroll tax.
(iii)
Superannuation
The Group contributes to defined contribution superannuation plans. Contributions are recognised
as an expense as they are due.
(l) EARNINGS PER SHARE
Basic earnings per share (“EPS”) is calculated by dividing the net profit attributable to members of
the parent entity for the reporting period, after excluding any costs of servicing equity (other than
ordinary shares and converting preference shares classified as ordinary shares for EPS calculation
purposes), by the weighted average number of ordinary shares of the Company, adjusted for any
bonus issue.
Diluted EPS is calculated by dividing the net profit attributable to members of the parent entity,
adjusted by the after tax effect of financing costs associated with dilutive potential ordinary shares
and the effect on revenues and expenses of conversion to ordinary shares associated with dilutive
potential ordinary shares, by the weighted average number of ordinary shares and dilutive potential
ordinary shares adjusted for any bonus issue.
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
33
(m) PARENT ENTITY FINANCIAL INFORMATION
The financial information for the parent entity, Po Valley Energy Limited, disclosed in Note 25 has
been prepared on the same basis as the consolidated financial statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the
parent entity’s financial statements. Dividends received from associates are recognised in the parent
entity’s profit or loss, rather than being deducted from the carrying amount of these investments.
(n) SEGMENT REPORTING
The Group determines and presents operating segments based on the information that internally is
provided to the CEO, who is the Group’s chief operating decision maker.
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions
with any of the Group’s other components. An operating segment’s operating results are reviewed
regularly by the CEO to make decisions about resources to be allocated to the segment and assess
its performance, and for which discrete financial information is available.
Segment results that are reported to the CEO include items directly attributable to a segment as well
as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate
assets and income tax assets and liabilities. Segment capital expenditure is the total cost incurred
during the period to acquire property, plant and equipment and resource property costs.
(o) USE OF ESTIMATES AND JUDGEMENTS
The preparation of the financial statements requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and in any future periods
affected.
The estimates and judgements that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed below.
Impairment of non-current assets
The ultimate recoupment of the value of resource property costs and property plant and equipment
is dependent on successful development and commercial exploitation, or alternatively, sale, of the
underlying properties. The Group undertakes at least on an annual basis, a comprehensive review for
indicators of impairment of these assets. Should an impairment indicator exist, the area of interest or
CGU is tested for impairment. There is significant estimation involved in determining the inputs and
assumptions used in determining the recoverability amounts.
The key areas of estimation involved in determining recoverable amounts include:
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
34
• Recent drilling results and reserves and resources estimates
• Environmental issues that may impact the underlying licences
• The estimated market value of assets at the review date
• Fundamental economic factors such as the gas price and current and anticipated operating
costs in the industry
• Future production rates
The post-tax discount rate used for impairment purposes is 10%.
Rehabilitation provisions
The value of these provisions represents the discounted value of the present obligations to restore,
dismantle and rehabilitate each well site under development or in production.
Significant estimation is required in determining the provisions for rehabilitation and closure as there
are many transactions and other factors that will affect ultimate costs necessary to rehabilitate the
sites. The discounted value reflects a combination of management’s best estimate of the cost of
performing the work required, the timing of the cash flows and the discount rate.
A change in any, or a combination of, the key assumptions used to determine the provisions could
have a material impact on the carrying value of the provisions.
The provision recognised for each site is reviewed at each reporting date and updated based on the
facts and circumstances available at that time. Changes to the estimated future costs for operating
sites are recognised in the statement of financial position by adjusting both the restoration and
rehabilitation asset and provisions.
Reserve estimates
Estimation of reported recoverable quantities of Proven and Probable reserves include estimates
regarding commodity prices, exchange rates, discount rates, and production and transportation costs
for future cash flows. It also requires interpretation of complex geological and geophysical models in
order to make an assessment of the size, shape, depth and quality of reservoirs, and their anticipated
recoveries. The economic, geological and technical factors used to estimate reserves may change from
period to period.
A change in any, or a combination of, the key assumptions used to determine the reserve estimates
could have a material impact on the carrying value of the project via depreciation rates or impairment
assessments. The reserve estimates are reviewed at each reporting date and any changes to the
estimated reserves are recognised prospectively to depreciation and amortisation. Any impact of the
change in the reserves is considered on asset carrying values, and impairment losses, if any, are
immediately recognised in the profit or loss.
Recognition of deferred tax assets
The recoupment of deferred tax assets is dependent on the availability of profits in future years. The
Group undertakes a forecasting exercise at each reporting date to assess its expected utilisation of
these losses.
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
35
The key areas of estimation involved in determining the forecasts include:
•
Future production rates
•
Economic factors such as the gas price and current and anticipated operating costs in the industry
•
Capital expenditure expected to be incurred in the future
A change in any, or a combination of, the key assumptions used to determine the estimates could
have a material impact on the carrying value of the deferred tax asset. Changes to estimates are
recognised in the period in which they arise.
NOTE 2:
FINANCIAL RISK MANAGEMENT
The Group has exposure to a variety of risks arising from its use of financial instruments. This note
presents information about the Group’s exposure to specific risks, their objectives, policies and
processes for measuring and managing risk, and the management of capital. Further quantitative
disclosures are included throughout this financial report. The Board of Directors has overall
responsibility for the risk management framework.
(i)
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations and arises principally from transactions with
customers and investments.
The Group invests in short term deposits and trades with recognised, creditworthy third parties.
Cash and short-term deposits are made with institutions that have a credit rating of at least A1 from
Standard & Poors and A from Moodys.
Management has a credit policy in place whereby credit evaluations are performed on all customers
and parties the Group and its subsidiaries deal with. The group monitors receivable balances on an
ongoing basis and as a result believes its exposure to bad debts is not significant.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset.
(ii)
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising any return.
Interest rate risk
The Group has significant cash assets which may be susceptible to fluctuations in changes in interest
rates. Whilst the Group requires the cash assets to be sufficiently liquid to cover any planned or
unforeseen future expenditure, which prevents the cash assets being committed to long term fixed
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
36
interest arrangements. The Group adopts a policy of ensuring that as far as possible it maintains
excess cash and cash equivalents in bank accounts earning interest.
Currency risk
The Group is exposed to foreign currency risk on purchases that are denominated in a currency other
than the respective functional currencies of consolidated entities. The currency giving rise to this risk
is primarily Australian dollars.
In respect to monetary assets held in currencies other than Euro, the Group ensures that the net
exposure is kept to an acceptable level by minimising their holdings in the foreign currency where
possible by buying or selling foreign currencies at spot rates where necessary to address short term
imbalances.
(iii)
Capital Management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. Capital consists of issued share capital
plus accumulated losses/earnings. The Board monitors accumulated losses/earnings.
The Board seeks to encourage all employees of the Group to hold ordinary shares.
The Board seeks to maintain a balance between the higher returns that might be possible with higher
levels of borrowings and the advantages and security afforded by a sound capital position from
shareholders.
The Group does not have a defined share buy-back plan and there were no changes in the Group’s
approach to capital management during the year. There are no externally imposed restrictions on
capital management.
(iv)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages its liquidity risk by monitoring its cash reserves and forecast spending.
Management is cognisant of the future demands for liquid finance resources to finance the Company’s
current and future operations, and consideration is given to the liquid assets available to the Company
before commitment is made to future expenditure or investment
(v)
Climate change risk
Key climate-related risks and opportunities relevant to the Group’s operations include:
• The transition to a low carbon economy through technological improvements and innovations
that support a lower carbon energy efficient system with decreased demand and changing
community sentiment for fossil fuels, increased uncertainty time and cost associated with
regulatory bodies granting approvals or licences on fossil fuel intensive projects. Transition to
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
37
lower carbon economy also gives rise to opportunity for the Group’s gas production assets.
Natural gas is viewed as a key element to supporting a sustainable energy transition.
• Physical changes caused by climate change include increased severe weather events and chronic
changes to weather patterns which may impact demand for energy and the Group’s production
assets and production capability. These events could have a financial impact on the Group
through increased operating costs, maintenance costs, revenue generation and sustainability of
its production assets.
• Policy changes by governments which may result in increasing regulation and costs which could
have a material impact on the Group’s operations.
Due to the nature of the uncertainties relating to the above risks, the financial impact has not been
quantified for the financial year.
The Group is committed to continually improve climate change related disclosures as processes and
understanding of climate change related matters improve alongside the Group's activities and
operations.
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
38
NOTE 3:
FINANCIAL REPORTING BY SEGMENTS
The Group’s reportable segments as described below are the Group’s strategic business units. The strategic business units are classified according to field
licence areas which are managed separately. All strategic business units are in Italy. For each strategic business unit, the Board reviews internal management
reports on a monthly basis.
Exploration and evaluation
Development
Production
Total
2024
2023
2024
2023
2024
2023
2024
2023
€
€
€
€
€
€
€
€
External revenues
101,592
-
-
-
6,524,036
2,605,215
6,625,628
2,605,215
Segment profit before tax
57,630
-
-
-
4,605,478
1,831,030
4,663,108
1,831,030
Depreciation and amortisation -
production
-
-
-
-
(532,206)
(189,969)
(532,206)
(189,969)
Unwind of discount on site
restoration provision
-
-
-
-
(39,370)
(108,302)
(39,370)
(108,302)
Reportable segment assets:
-
Resource property costs
5,148,625
4,733,654
-
-
4,850,362
5,241,713
9,998,987
9,975,367
Property, plant and equipment
-
-
-
-
1,820,071
1,938,726
1,820,071
1,938,726
Receivables
24,269
-
-
-
923,869
421,461
948,138
421,461
Other assets
33,438
11,325
-
-
-
-
33,438
11,325
5,206,332
4,744,979
-
-
7,594,302
7,601,900
12,800,634
12,346,879
Capital expenditure
414,970
71,984
-
1,191,140
22,201
37,805
437,171
1,300,929
Reportable segment liabilities:
Rehabilitation and restoration
provision
-
-
-
-
(1,014,361)
(974,991)
(1,014,361)
(974,991)
Other liabilities
(61,312)
-
-
-
(734,546)
(90,466)
(795,858)
(90,466)
(61,312)
-
-
-
(1,748,907)
(1,065,457)
(1,810,219)
(1,065,457)
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
39
NOTE 3:
FINANCIAL REPORTING BY SEGMENTS (continued)
CONSOLIDATED
Reconciliation of reportable segment profit or loss, assets and
liabilities
2024
€
2023
€
Profit or loss:
Total profit for reportable segments
4,663,108
1,831,030
Unallocated amounts:
Net finance expense not allocated to reportable segments
(14,268)
(31,905)
Other expenses
(1,257,441)
(997,934)
Consolidated profit before income tax
3,391,399
801,191
Assets:
Total assets for reportable segments
12,800,634
12,346,879
Other assets
5,376,708
2,594,381
Consolidated total assets
18,177,342
14,941,260
Liabilities:
Total liabilities for reportable segments
(1,810,219)
(1,065,457)
Other liabilities
(435,448)
(335,279)
Consolidated total liabilities
(2,245,667)
(1,400,736)
NOTE 4:
REVENUE
Gas sales contract with customers
6,524,036
2,337,315
All gas sales are recorded as revenue at a point in time.
NOTE 5:
COST OF SALES
Production operating costs
706,610
280,783
Capacity and transportation costs
38,081
28,122
Cash costs of production
744,691
308,905
Depreciation of plant and equipment
140,856
50,278
Depletion of resource property costs
391,350
139,691
Depreciation and amortisation expense
532,206
189,969
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
40
CONSOLIDATED
2024
€
2023
€
NOTE 6:
EMPLOYEE BENEFIT EXPENSES
Wages, salaries and fees
Contributions to defined contribution plans
Less: allocation to projects
745,095
147,444
(108,022)
563,963
113,016
(111,538)
784,517
565,441
NOTE 7:
CORPORATE OVERHEADS
Corporate overheads comprise:
Company administration and compliance
120,039
122,492
Professional fees
287,006
357,478
Office costs
30,861
31,982
Travel and entertainment
26,974
31,748
Other expenses
68,971
28,454
533,851
572,154
NOTE 8:
AUDITOR’S REMUNERATION
Audit and review of the Group financial statements
Auditor of the Company: HLB Mann Judd
46,863
74,271
NOTE 9:
FINANCE INCOME AND EXPENSE
Recognised in profit and loss:
Interest income
425
8,221
Finance income
425
8,221
Interest expense
7,147
6,227
Unwind of discount on site restoration provision
39,370
108,302
Foreign exchange losses (net)
7,546
33,899
Finance expense
54,063
148,428
Net finance expense
(53,638)
(140,207)
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
41
CONSOLIDATED
2024
€
2023
€
NOTE 10:
INCOME TAX EXPENSE
Current tax
Current year
178,093
31,952
Deferred tax
Deferred tax expense
822,155
182,582
Total income tax expense
1,000,248
214,534
Numerical reconciliation between tax expense and pre-tax accounting profit
Profit for the year before tax from continuing operations
3,391,399
801,191
Income tax benefit expense using the Company’s domestic tax rate of
30% (2023: 30%)
1,017,420
240,358
Permanent differences
(29,283)
(196,961)
Effect of tax rates in foreign jurisdictions
(231,324)
(81,851)
Current year losses and temporary differences for which no deferred
tax asset was recognised
168,412
287,114
Changes in temporary differences
(103,070)
(66,078)
Foreign regional taxes payable
178,093
31,952
Income tax expense
1,000,248
214,534
NOTE 11:
EARNINGS PER SHARE
Basic and diluted earnings per share (€ cents)
0.21
0.05
The calculation of basic and diluted earnings per share from continuing operations was based on the profit
after tax for the year of €2,391,151 (2023: €586,657) and a weighted average number of ordinary shares
outstanding during the year of 1,158,961,621 (2023: 1,157,419,155).
Diluted earnings per share is the same as basic earnings per share.
The number of weighted average shares is calculated as
follows:
No.
of
days
Weighted
average no
2024
Weighted
average no
2023
Number of shares on issue at beginning of the year
365
1,158,961,621
1,150,961,620
Performance rights exercised
347
-
2,852,055
Conversion of unlisted options – tranche 1
314
-
860,274
Conversion of unlisted options – tranche 2
299
-
819,178
Conversion of unlisted options – tranche 3
263
-
720,548
Conversion of unlisted options – tranche 4
256
-
701,370
Conversion of unlisted options – tranche 4
184
-
504,110
Weighted average number of shares on issue at end of the year
1,158,961,621
1,157,419,155
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
42
CONSOLIDATED
2024
€
2023
€
NOTE 12: CASH AND CASH EQUIVALENTS
(a) Cash and cash equivalents
4,993,913
1,252,717
(b)
Reconciliation of cash flows from operating activities
Profit for the year
Adjustment for non-cash items:
Depreciation and amortisation
Unrealised foreign exchange losses
Employee benefit costs capitalised
Interest on lease liabilities
Unwind of discount on site restoration provision
Plant and equipment written off
Change in operating assets and liabilities:
Increase in receivables
Increase in trade and other payables
(Decrease) / increase in provisions
Increase in regional tax payable
Decrease in deferred tax assets
2,391,151
559,411
7,196
(108,022)
3,829
39,370
-
(522,418)
911,634
(1,583)
101,665
822,155
586,657
217,317
33,502
(111,538)
5,487
108,302
7,495
(355,212)
32,692
170
31,952
182,582
Net cash inflow from operating activities
4,204,387
739,406
NOTE 13:
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Sundry debtors
Indirect taxes receivable
Accrued revenue
188,811
17,182
142,234
759,326
69,461
18,915
251,343
352,000
1,107,553
691,719
The Group’s exposure to credit and currency risks and impairment losses related to trade and other
receivables are disclosed in Note 22.
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
43
CONSOLIDATED
2024
€
2023
€
NOTE 14:
PROPERTY PLANT & EQUIPMENT
Land – gas producing well site
52,100
52,100
Gas producing plant and equipment
At Cost
Accumulated depreciation
1,959,105
(191,134)
1,936,904
(50,278)
1,767,971
1,886,626
Office Furniture & Equipment:
At cost
Accumulated depreciation
29,666
(22,179)
29,666
(20,097)
7,487
9,569
Right-of-use asset: Building (Note 19)
At Cost
Accumulated depreciation
150,011
(54,472)
148,678
(29,350)
95,539
119,328
Total property plant & equipment
1,923,097
2,067,623
Reconciliations:
Reconciliation of the carrying amounts of each class of property, plant & equipment are set out below:
Land – production well site
Carrying amount at beginning of period
Additions – reclassified from resource property costs
52,100
-
-
52,100
52,100
52,100
Gas production plant and equipment
Carrying amount at beginning of period
Additions – reclassified from resource property costs
Additions
Depreciation expense
1,886,626
-
22,201
(140,856)
-
1,900,710
36,194
(50,278)
1,767,971
1,886,626
Office furniture & equipment
Carrying amount at beginning of year
Written off
Depreciation expense
9,569
-
(2,082)
20,932
(7,495)
(3,868)
Carrying amount at end of year
7,487
9,569
Right-of-use assets
Carrying amount at beginning of year
Remeasurement of lease arrangements
Depreciation expense
119,328
1,333
(25,122)
135,014
7,794
(23,480)
Carrying amount at end of year
95,539
119,328
1,923,097
2,067,623
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
44
CONSOLIDATED
2024
€
2023
€
NOTE 15:
RESOURCE PROPERTY COSTS
Resource Property costs
Exploration and evaluation phase
5,148,624
4,733,654
Development phase
-
-
Production phase
4,850,363
5,241,713
9,998,987
9,975,367
Reconciliation of carrying amount of resource properties
Exploration and Evaluation Phase
Carrying amount at beginning of year
4,733,654
4,661,672
Exploration expenditure
414,970
71,982
Carrying amount at end of year
5,148,624
4,733,654
Development Phase
Carrying amount at beginning of year
-
6,736,926
Development expenditure
-
1,191,140
Transfer to production phase
-
(7,928,066)
Carrying amount at end of year
-
-
Production Phase
Carrying amount at beginning of period
5,241,713
-
Transfer from development phase
-
7,928,066
Additions
-
1,612
Reclassified to property, plant & equipment (Gas producing
assets and well site land)
-
(1,952,810)
Reclassified as inventory
-
(11,325)
Impact of changes to rehabilitation and restoration provision
-
(584,139)
Amortisation
(391,350)
(139,691)
4,850,363
5,241,713
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
45
NOTE 15:
RESOURCE PROPERTY COSTS (continued)
Resource property costs in the exploration phase comprise the carrying value of its exploration and pre-
development projects. The ultimate recoupment of resource property costs is dependent upon the
successful development and exploitation, or alternatively sale, of the respective areas of interest at an
amount greater than or equal to the carrying value. Where activities in the area of interest have, at the
reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves, the exploration and evaluation assets are assessed for impairment.
Impairment will occur if sufficient data exists to determine technical feasibility and commercial viability and
the facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
Resource property costs in the development phase comprise the carrying value of the development costs
for areas that have reached the stage of reasonable assessment of economically recoverable reserves and
have attained required permits and approvals to develop into a producing field.
Resource property costs in the production phase comprise the carrying value of the Group’s production
projects that have reached the completion of development and are ready for or have commenced
production of gas having attained the required permits and approvals.
The Group assessed each asset or cash generating unit (CGU) for any indication of impairment, reviewing
the carrying value of these assets and in relation to significant projects in conjunction with reviewing the
recoverable amount using a Value in Use CGU valuation.
The Group bases its calculation on detailed budgets and forecasts, which are prepared separately for each
of the Group’s CGUs to which the individual assets are allocated. These budgets and forecasts generally
cover the forecasted life of the CGUs. VIU does not reflect future cash flows associated with improving or
enhancing an asset’s performance.
The recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal (FVLCD) and
value in use (VIU). In calculating VIU, the estimated future cash flows are discounted to their present value
using an after-tax discount rate (10%) that reflects current market assessments of the time value of money
and the risks specific to the assets.
As a result of this assessment, with the recoverable amount exceeding the carrying value of these assets, no
impairment was required on the carrying value of these material projects.
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
46
NOTE 16:
DEFERRED TAX ASSETS AND LIABILITIES
Recognised deferred tax assets
Deferred tax assets have been recognised in respect of the following items:
CONSOLIDATED
2024
€
2023
€
Tax losses (Italy)
179,275
910,822
Accrued expenses and liabilities
(63,600)
27,009
Recognised deferred tax assets
115,676
937,831
The tax losses in both Italy and Australia do not expire. The deductible temporary differences do not expire
under current tax legislation. Deferred tax assets have been recognised in respect of these items because it is
probable that future taxable profit will be available against which the Group can utilise the benefits therefrom.
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Tax losses (Australia)
3,780,878
3,826,380
Tax losses (Italy)
24,531
152,436
Deductible temporary differences
42,539
76,423
Unrecognised deferred tax assets
3,847,948
4,055,239
Deferred tax benefit will only be obtained if:
(i)
The relevant company derives future assessable income of a nature and of an amount sufficient to
enable the benefit from the deductions for the losses to be realised;
(ii)
The relevant company continues to comply with the conditions for deductibility imposed by tax
legislation; and
(iii)
No changes in tax legislation adversely affect the relevant company in realising the benefit from the
deductions for the losses.
Movement in recognised temporary differences during the year
Balance 1
January
2023
Profit and
loss
Equity
Balance
31
December
2023
Profit and
loss
Equity
Balance 31
December
2024
Consolidated
€
€
€
€
€
€
€
Tax losses
1,093,161
(182,339)
-
910,822
(731,546)
-
179,276
Accrued expenses
and liabilities
27,252
(243)
-
27,009
(90,609)
-
(63,600)
Total recognised
deferred tax asset
1,120,413
(182,582)
-
937,831
(822,155)
-
115,676
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
47
NOTE 17:
TRADE AND OTHER PAYABLES
CONSOLIDATED
2024
€
2023
€
Trade payables and accruals
1,126,932
296,251
1,126,932
296,251
The Group’s exposure to currency and liquidity risks related to trade and other payables are disclosed in
Note 22.
NOTE 18:
PROVISIONS
Current:
Employee leave entitlements
2,974
4,557
Non-current:
Rehabilitation and restoration provision
1,014,361
974,991
Reconciliation of rehabilitation and restoration provision:
Opening balance
974,991
1,450,828
Impact of changes to cost estimates
-
(544,679)
Impact of changes to assumptions
-
(39,460)
Unwind of discount
39,370
108,302
Closing balance
1,014,361
974,991
Provision has been made for the future removal and environmental restoration costs at the Podere Maiar-
1 well site in the Selva Malvezzi production concession. The estimated future obligation includes the costs
of removing facilities, abandoning well site, restoring the affected area and is the best estimate of the
present value of the future expenditure required to settle the restoration obligation at the reporting date.
The provision will be adjusted at the end of each reporting period to reflect the passage of time and changes
in the estimated future cash flows underlying the obligation. Increases in the provision due to the passage
of time will be recognised as a finance cost whereas increases/decreases due to changes in estimated future
cash flows are capitalised where there is a future economic benefit associated with the asset. Actual costs
incurred upon settlement of the rehabilitation and restoration obligation are charged against the provision
to the extent the provision has been established.
The estimated net present value at 31 December 2024 is €1,014,361 (net 63% to the Group) (31 December
2023 €974,991) based on an undiscounted total future liability of €1,122,572 (net) (2023: €1,122,572 (net))
using a discount factor, being the risk-free interest rate, of 4.04% p.a. and inflation rate of 2.79% p.a.
Payments of these costs are expected at the end of the life of the field in approximately 14 years.
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
48
NOTE 19: LEASES
Leases as lessee
The Group leases office facilities in Rome under a new lease agreement. The lease runs for a period of six
years from the start of the lease in October 2022.
Information about leases for which the Group is a lessee is presented below.
Right-of-use assets
Right-of-use assets related to leased properties that do not meet the definition of investment property and
are presented as property, plant & equipment (see Note 14).
CONSOLIDATED
2024
€
2023
€
Buildings
Balance at 1 January
119,328
135,014
Additions to right-of-use assets (new leases)
-
Remeasurement of lease arrangements
1,333
7,794
Depreciation
(25,122)
(23,480)
Total
95,539
119,328
Amounts recognised in profit and loss:
Interest on lease liabilities
3,829
5,488
Amounts recognised in statement of cash flows:
Payment of lease liabilities
28,700
27,870
Lease liabilities:
Lease liabilities are presented in the statement of financial position separately withing liabilities as follows:
Lease liabilities – current
24,851
24,851
Lease liabilities – non-current
76,549
100,086
101,400
124,937
Lease liabilities are for the main operation office in Rome Italy. Future minimum lease payments at 31
December were as follows:
Within one
year
One to five
years
After 5 years
Total
Lease payments
28,800
79,200
-
108,000
Finance charges
(3,949)
(2,651)
-
(6,600)
Net Present values
24,851
76,549
-
101,400
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
49
20:
CAPITAL AND RESERVES
All ordinary shares are fully paid and carry one vote per share and the right to dividends. In the event of
winding up the Company, ordinary shareholders rank after creditors. Ordinary shares have no par value.
CONSOLIDATED
Reserves
2024
€
2023
€
Translation Reserve
1,192,269
1,192,269
Share Based Payment Reserve
-
107,714
1,192,269
1,299,983
Translation Reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations. The historical balance comprises of translation differences prior to change
in functional currency of a foreign operation.
Share Based Payment Reserve
The share based payment reserve comprises the fair value of vested options and performance rights issued as
consideration.
Share based payment reserve reconciliation for the period:
Opening balance
107,714
179,626
Options exercised during the period
-
(10,687)
Performance rights exercised during the period
-
(61,225)
Options expired
(107,714)
-
Closing balance
-
107,714
Dividends
No dividends were paid or declared during the current year (2023: Nil).
Ordinary Shares
CONSOLIDATED
Issue
price
2024
Number
2023
Number
2024
€
2023
€
Share Capital
Opening balance - 1 January
Shares issued during the reporting period:
Exercise of performance rights
Conversion of options
Share issue costs
-
A$0.05
1,158,961,620
-
-
-
1,150,961,620
3,000,000
5,000,000
-
56,847,751
-
-
-
56,632,102
61,225
155,711
(1,287)
Closing balance – 31 December
1,158,961,620
1,158,961,620
56,847,751
56,847,751
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
50
NOTE 21:
SHARE BASED PAYMENTS
Options:
No options were granted during the year (31 December 2023: Nil).
7,500,000 options expired in the period to 31 December 2024 without exercise. (2023: Nil).
No options were issued or cancelled subsequent to the year end.
The table below summarises the movement in options for the year:
31 December 2024
31 December 2023
No.
WAEP (€
cents)
No.
WAEP (€
cents)
Options outstanding at the start of the year
7,500,000
0.068
12,500,000
0.053
Granted in the year
-
-
-
-
Exercised in the year
-
-
(5,000,000)
0.031
Expired in the year
(7,500,000)
0.068
Options at the end of the year
-
-
7,500,000
0.068
(AU$0.10)
The were no options on issue and outstanding over unissued ordinary shares at 31 December 2024 (2023:
7,500,000 Options).
NOTE 22:
FINANCIAL INSTRUMENTS
(a) Interest Rate Risk Exposures
Profile
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
CONSOLIDATED
2024
€
2023
€
Variable rate instruments
Financial assets
4,993,913
1,252,717
Financial liabilities
-
-
4,993,913
1,252,717
Fixed rate instruments
Financial assets
-
-
Financial liabilities
(101,400)
(124,937)
(101,400)
(124,937)
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
51
NOTE 22:
FINANCIAL INSTRUMENTS (continued)
Cash flow sensitivity analysis for variable rate instruments:
A strengthening of 50 basis points in interest rates at the reporting date would have increased /
(decreased) equity and profit and loss by the amounts shown below. This analysis assumes that all other
variables, in particular foreign currency rates, remain constant. The analysis is performed on the same
basis for 2023.
Profit or loss
Equity
Effect in €’s
2024
2023
2024
2023
31 December
Variable rate instruments
24,970
6,264
-
-
(b) Credit Risk
Exposure to credit risk
The Group is not exposed to significant credit risk. Credit risk with respect to cash is held with
recognised financial intermediaries with acceptable credit ratings.
The Group is not exposed to significant credit risk. Credit risk with respect to cash is held with recognised
financial institutions with acceptable credit ratings. The Group has limited its credit risk in relation to its
gas sales in that all transactions fall within an offtake agreement with BP Gas Marketing Limited.
The Group has a concentration of credit risk exposure to its one customer (BP Gas Marketing Limited).
Settlement and payment terms are 20 days after month end, and the customer has an investment grade
credit rating.
Receivables from joint operations partners fall under the Joint Operations Agreement for the
development of the Selva project. Other receivables from Government agencies have limited credit risk
as these are either offset against other indirect taxes or payroll taxes payable first with any remainder
receivable within a 12-month period.
The carrying amount of the Group’s financial assets represents the maximum credit exposure and is shown in
the table below. No receivables are considered past due nor were any impairment losses recognised during
the period.
CONSOLIDATED
Carrying Amount
Note
2024
€
2023
€
Cash and cash equivalents
12
4,993,913
1,252,717
Receivables – current
13
1,107,553
691,719
Other assets
4,678
4,678
6,106,144
1,949,114
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
52
NOTE 22:
FINANCIAL INSTRUMENTS (continued)
(c)
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest
payments:
Consolidated
31 December 2024
€
Carrying
amount
Contractual
cash flows
6 months
or less
6 to 12
months
1 – 2 Years
2 – 5 Years
Trade and other
payables
(1,126,932)
(1,126,932)
(1,126,932)
-
-
-
Lease liabilities
(101,400)
(108,000)
(14,400)
(14,400)
(57,600)
(21,600)
(1,228,332)
(1,234,932)
(1,141,332)
(14,400)
(57,600)
(21,600)
31 December 2023
€
Carrying
amount
Contractual
cash flows
6 months
or less
6 to 12
months
1 – 2 Years
2 – 5 Years
Trade and other
payables
(296,251)
(296,251)
(296,251)
-
-
-
Lease liabilities
(124,937)
(136,230)
(14,340)
(14,340)
(57,360)
(50,190)
(421,188)
(432,481)
(310,591)
(14,340)
(57,360)
(50,190)
(d)
Net Fair Values of financial assets and liabilities
The carrying amounts of financial assets and liabilities as disclosed in the statement of financial
position equate to their estimated net fair value.
Financial assets and financial liabilities measured at fair value in the statement of financial position
are grouped into three levels of a fair value hierarchy.
The three levels are defined based on the observability of significant inputs to the measurement, as
follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (derived from prices); and
• Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
53
NOTE 22:
FINANCIAL INSTRUMENTS (continued)
Current receivables, current payables and cash & cash equivalents are not measured at fair value.
Due to their short- term nature, the carrying amount of current receivables, current payables and
cash and cash equivalents is assumed to approximate their fair value.
The are not other financial assets and liabilities at fair value.
(e)
Foreign Currency Risk
The Group is exposed to foreign currency risk on purchases and borrowings that are denominated in
a currency other than Euro. The currencies giving rise to this risk is primarily Australian Dollars.
CONSOLIDATED
Amounts receivable/(payable) in foreign currency other than
functional currency:
2024
€
2023
€
Cash
37,990
21,794
Current – payables
(5,816)
(50,941)
Net exposure
32,174
(29,147)
The following significant exchange rates applied during the year:
Average rate
Reporting date spot rate
2024
2023
2024
2023
Australian Dollar ($)
0.610
0.619
0.598
0.614
USA Dollar (US$)
0.918
0.912
0.954
0.924
Sensitivity Analysis
A 5% strengthening of these currencies against the Euro (€) at 31 December would have increased
(decreased) equity and profit and loss by the amounts shown below. This analysis assumes that all other
variables, in particular interest rates, remain constant. The analysis for 2023 was prepared using the same
basis.
CONSOLIDATED
31 December 2024
Profit or loss
€
Equity
€
Australian Dollar to Euro (€)
1,609
-
31 December 2023
Australian Dollar to Euro (€)
(1,008)
-
USA Dollar to Euro (€)
(449)
-
A 5% weakening of these currencies against the Euro (€) at 31 December would have the equal but opposite
effect on the above currencies to the amounts shown above, on the basis that all other variables remain
constant.
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
54
NOTE 23:
COMMITMENTS AND CONTINGENCIES
Contractual Commitments and contingencies
The table below summarises material commitments for the Group:
Within one year
One to five
years
After 5 years
Leases (refer Note 19)
28,800
79,200
-
28,800
79,200
-
Other than the above, there are no other material commitments or contingent liabilities not provided for in
the financial statements of the Group as at 31 December 2024.
NOTE 24:
RELATED PARTIES
KEY MANAGEMENT PERSONNEL COMPENSATION
The key management personnel compensation included in employee benefit expenses (see Note 6) is as
follows:
CONSOLIDATED
2024
€
2023
€
Short-term employee benefits
187,775
117,900
Termination benefits
-
-
Other long term benefits
-
-
Post-employment benefits
-
-
187,775
117,900
Short term benefits includes €47,355 consultancy fees paid to Sara Edmonson for consultancy services provided
during the year to the Group in addition to non-executive director fees.
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
55
NOTE 25:
PARENT ENTITY DISCLOSURES
COMPANY
2024
€
2023
€
Financial Position
Assets
Current assets
66,429
180,173
Non-current assets
12,309,773
12,688,233
Total assets
12,376,202
12,868,406
Liabilities
Current liabilities
(55,119)
(83,990)
Non-current liabilities
-
-
Total liabilities
(55,119)
(83,990)
Net Assets
12,321,083
12,784,416
Equity
Issued capital
56,847,752
56,847,752
Reserves
-
107,714
Accumulated losses
(44,526,669)
(44,171,050)
Total equity
12,321,083
12,784,416
Financial Performance
Loss
(463,332)
(169,457)
Other comprehensive loss
-
-
Total comprehensive loss
(463,332)
(169,457)
NOTE 26:
INTERESTS IN OTHER ENTITIES AND JOINT OPERATIONS
The Group’s interest in joint arrangements at 31 December 2024 is as follows:
Joint Operation
Manager
Company’s
Interest
Principal Activity
(Exploration)
Selva Malvezzi Field
Po Valley Operations
63%
Gas
The Group received the Selva Malvezzi Production concession in July 2022 and holds a 63% interest in the
field together with Prospex Oil and Gas Plc (“Prospex”) holding 37% (includes 20% held by Prospex subsidiary
UOG Italia S.r.l). Po Valley Operations (100% subsidiary of the Company) is operator under a Joint Operations
Agreement (“JOA”).
PO VALLEY ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
56
NOTE 26:
INTERESTS IN OTHER ENTITIES AND JOINT OPERATIONS (continued)
Subsidiaries
The parent and ultimate controlling party of the Group is Po Valley Energy Limited. The investments held in
controlled entities are included in the financial statements of the parent at cost less any impairment losses.
Details of the subsidiary is tabled below:
Name:
Country of
Incorporation
Class of
Shares
2024
2023
Investment
€
Investment
€
Holding
%
Po Valley Operations Pty
Limited (“PVO”)
Australia
Ordinary
4,253,419
4,253,419
100
NOTE 27:
SUBSEQUENT EVENTS
There were no events between the end of the financial year and the date of this report that, in the opinion of
the Directors, will affect significantly the operations of the Group, the results of those operations, or the state
of affairs of the Group in future financial years.
PO VALLEY ENERGY LIMITED
57
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
Entity Name
Entity Type
Place
Formed/
Country
of
Incorporation
Ownership
Interest %
Tax Residency
Po Valley Energy Ltd
Body corporate
Australia
n/a
Australia
Po Valley Operations Pty Ltd
Body corporate
Australia
100%
Australia
Po Valley Operations Pty Ltd
Branch
Branch registered as
business in Italy
100%
Italy
PO VALLEY ENERGY LIMITED
58
DIRECTORS’ DECLARATION
1. In the opinion of the directors of Po Valley Energy Limited (“the Company”):
i)
the accompanying financial statements and notes are in accordance with the Corporations Act
2001, including:
a.
giving a true and fair view of the Group’s financial position as at 31 December 2024 and of
its performance, for the financial year ended on that date; and
b.
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001;
ii)
there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
iii)
the financial statements and notes are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
iv)
the information disclosed in the Consolidated Entity Disclosure Statement is true and correct.
2. The directors have been given the declarations required by 295A of the Corporations Act 2001 for the
financial year ended 31 December 2024.
This declaration is made in accordance with a resolution of directors.
Kevin Bailey AM
Chairman
27 March 2025
59
INDEPENDENT AUDITOR’S REPORT
To the Members of Po Valley Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Po Valley Energy Limited (“the Company”) and its controlled entities
(“the Group”), which comprises the consolidated statement of financial position as at 31 December 2024,
the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, notes to the financial
statements, including material accounting policy information, the consolidated entity disclosure statement
and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(a) giving a true and fair view of the Group’s financial position as at 31 December 2024 and of its financial
performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
We have determined the matters described below to be the key audit matters to be communicated in our
report.
60
Key Audit Matter
How our audit addressed the key audit matter
Revenue recognition
Note 4 to the financial report
The Group generates revenue from gas sales. The
Group recognised sales revenue of €6,524,036 for the
year (2023: €2,337,315).
Revenue recognition is considered to be a key audit
matter given the significance of revenue to the Group’s
results as well as the fraud risk around revenue
recognition including:
-
An
overstatement
of
revenues
through
premature revenue recognition or recording of
fictitious revenues; or
-
Revenue not being recognised when control is
transferred to the customer, resulting in it not
being recognised in the correct accounting
period.
Revenue is recognised when control is transferred to
the buyer and the amount of revenue can be reliably
determined. This occurs for the Group when the
control of gas passes at the delivery point.
Our audit procedures included but were not limited to
the following:
-
Obtaining an understanding of the Group’s
processes for revenue recognition and controls in
place around gas sales;
-
Performing substantive tests of detail of all gas
sales transactions during the year to supporting
documentation and receipt of cash;
-
Assessing the Group’s policies for recognition of
revenue
against
the
requirements
of
the
accounting standards and ensuring these are
applied correctly and adequately disclosed in the
financial statements; and
-
Performing sales cut-off procedures focusing on
sales around balance date, testing a sample of
transactions to underlying documentation and
assessing the period in which they were
recognised.
Recoverability of exploration and evaluation phase assets
Note 15 to the financial report
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group’s
accounting policy is to capitalise exploration and
evaluation expenditure. As at 31 December 2024 the
Group had € 5,148,624 of capitalised exploration and
evaluation costs.
Our audit focused on the Group’s assessment of the
carrying amount of the capitalised exploration and
evaluation costs, as this is one of the most significant
assets of the Group. We planned our work to address
the audit risk that the capitalised expenditure may no
longer meet the recognition criteria of the standard. In
addition, we considered it necessary to assess
whether facts and circumstances existed to suggest
that the carrying amount of the exploration and
evaluation costs may exceed their recoverable
amounts.
Our procedures included but were not limited to the
following:
-
Obtaining an understanding of the key processes
associated with management’s review of the
carrying values of each area of interest;
-
Verifying a sample of amounts capitalised;
-
Considering
management’s
assessment
of
potential indicators of impairment;
-
Obtaining evidence that the Group has current
rights to tenure of its areas of interest;
-
Examining the exploration budget for the year
ending 31 December 2024 and discussing with
management the nature of planned activities;
-
Enquiring with management, reviewing ASX
announcements
and
reviewing
minutes
of
Directors’ meetings to ensure that the Group had
not resolved to discontinue exploration and
evaluation at any of its areas of interest; and
-
Examining the disclosures made in the financial
report.
61
Recoverability of gas producing plant and equipment and production phase assets
Notes 14 and 15 to the financial report
As at 31 December 2024 the Group had gas producing
plant and equipment with a carrying value of
€1,767,971
and
production
phase
assets
of
€4,850,363.
Assessing the recoverability and carrying value of
these balances was considered to be a key audit
matter due to the judgements and estimations
involved.
These estimations and judgements relate to two main
areas, being impairment indicators and depreciation
and amortisation associated with these assets.
Impairment
indicators
involve
assessing
future
forecasts and judgement around recoverability of the
assets.
Depreciation and amortisation involve using estimated
reserves and resources in a units of production
methodology.
Our audit procedures included but were not limited to
the following:
-
Obtaining an understanding of the processes and
controls
in
place
around
management’s
assessment of the recoverability of the assets;
-
Testing for impairment indicators to determine
whether any such indicators exist at balance date;
-
Reviewing future plans for the cash-generating
units and ensuring that such plans support the
recoverability of the related assets;
-
Ensuring items capitalised during the year were
appropriate to capitalise;
-
Assessing the application of reserves and
resources in the depreciation/amortisation models
by comparing them to the latest published
statement and underlying records.
-
Testing the mathematical accuracy of the
depreciation/amortisation models; and
-
Assessing
the
adequacy
of
the
Group’s
disclosures within the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 31 December 2024 but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report, or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
(a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
(b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
62
(a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view and is free from material misstatement, whether due to fraud or error; and
(b) the consolidated entity disclosure statement that is true and correct and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
−
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
−
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
−
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
−
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
−
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
63
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the Directors’ Report for the year ended 31
December 2024.
In our opinion, the Remuneration Report of Po Valley Energy Limited for the year ended 31 December 2024
complies with Section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
HLB Mann Judd
L Di Giallonardo
Chartered Accountants
Partner
Perth, Western Australia
27 March 2025
PO VALLEY ENERGY LIMITED
TECHNICAL SUMMARY
64
The following information is provided in order to comply with Chapter 5 of the ASX Listing Rules and
include general requirements applicable to the public reporting of petroleum resources and specific
information to be included in the oil and gas exploration:
1)
TENEMENTS
Po Valley Energy Limited (the “Company, “Po Valley Energy” or “PVE”) holds 100% of Po Valley Operations
Pty Ltd (“PVO”) together the Group. PVO holds the titles to all exploration permits fully awarded and /
or already awarded and preliminary awarded production concessions.
Its operations are located entirely in the north of Italy.
As at 31 December 2024, the Group’s core portfolio includes 1 awarded production concession (Selva
Malvezzi), 1 preliminary awarded production concession (Teodorico (d.40.AC-PY)) and 3 onshore
Exploration Permits in Table 1.
Total acreage position of the Group at 31 December 2024 is 207,73 km2.
For an illustration of each asset’s location please refer to the map in Figure 1 and Table 1.
Table 1 below summarises the ownership % held by the Group of each tenement as at 31 December 2024:
Status
Tenement
Location
Interest held
PRODUCTION
CONCESSIONS
AWARDED
Selva Malvezzi(1)(2)
Italy, Emilia Romagna
63% Po Valley
37% Prospex
Group
PREL.
AWARDED
Teodorico (d.40.AC-PY)
Italy, Adriatic
Offshore
100% Po Valley
EXPLORATION
PERMITS
GRANTED
Cadelbosco di Sopra
Italy, Emilia Romagna
100% Po Valley
Grattasasso
Italy, Emilia Romagna
100% Po Valley
Torre del Moro
Italy, Emilia Romagna
100% Po Valley
1 Net to PVE is 63%, JV partners’ 37% held by Prospex Group (Held by Prospex Energy Plc wholly owned subsidiaries PXOG Marshall
Limited 17% and UOG Italia S.r.l. 20%)
2 Selva Malvezzi Production Concession includes areas that are deemed suitable for exploration including the prospects at Casale
Guida 1d (North Selva), Ronchi 1d (South Selva), Selva Malvezzi 1d (East Selva) and Bagnarola 1d (Riccardina). These exploration
areas were previously held under the Podere Gallina exploration permit and are included in the Selva Malvezzi Production
Concession awarded in 2022.
Table 2: Changes to Licences and permits
Status
Tenement
Location
Change in
Interest held
EXPLORATION
PERMITS
EXPIRED
AR94PY
Italy, Adriatic
Offshore
100%
The AR94PY exploration permit has expired, however the Teodorico field and relevant prospects are
included in the preliminary awarded production concession d40.AC-PY . The remaining exploration
acreage in AR94PY would only have generated unnecessary additional surface fees.
PO VALLEY ENERGY LIMITED
TECHNICAL SUMMARY
65
Figure 1: Licences map at 31 December 2024
2)
RESERVES AND RESOURCES STATEMENT
The following tables summarise the status of the Group’s Reserves & Resources as at 31 December 2024.
Table 3: Total Group Reserves ( per CPR dated 25 July 2022 ASX announcement 26 July 2022 with
adjustment for depletion from production at Podere Maiar1)
Group Reserves
Reserves as at
Reserves as at
31 December 2024
31 December 2023
Gas, Italy (bcf)
1P
2P
1P
2P
Developed
Selva Malvezzi (Podere Maiar) [net]1
1.28
7.08
2.38
8.18
Undeveloped
Teodorico
27
37
27
37
Total Reserves
28.28
44.08
29.38
45.18
PO VALLEY ENERGY LIMITED
TECHNICAL SUMMARY
66
Table 4: Reconciliation of Reserves
Reserves Reconciliation
Reserves as at
Reserves as at
Gas, Italy (bcf)
1P
2P
Reserves at 31 December 2023
29.38
45.18
Production at Selva Malvezzi for 2024
[net]
(1.1)
(1.1)
Total Reserves at 31 December 2024
28.28
44.08
The movement in reserves for the year is a result of the production of gas at the Podere Maiar-1 well in
the Selva Malvezzi concession summarised in the table below:
Table 5: Production summary
Production well
Gross 100%
Net to PVE 63%
Podere Maiar-1
27,561,834 scm (1.74bcf)
17,363,954 scm (1.1bcf)
The Group does not have unconventional petroleum resources in its portfolio.
Undeveloped reserves held for longer than 5 years since first reported:
Teodorico (37 bcf 2P Reserve) has been held for longer than 5 years since first reported. The Group holds
a preliminary production concession for this area and the Environmental Impact Assessment (“EIA”)
decree for Teodorico was originally granted in March 2021.
During 2022, the impact of the Italy’s Plan of Sustainable Energy Transition of Suitable Areas (“Pitesai”)
was being assessed which inhibited progression for development. A court ruling in 2023 struck down the
Pitesai which restricted domestic exploration activity and the 2024 Environmental Decree has repealed
the previous Pitesai. In December 2023, the Italian government published a New Energy Decree in
response to Italy’s energy security needs which include measures to strengthen the production and
security of domestic natural gas supply. The decree was converted into law in February 2024 is being
operationalised through the Gestore Servizi Energetici “GSE”, an existing regulated body for energy in
Italy. An accelerate permitting regime is envisaged as an integral part of this decree.
In addition, a new Environmental Decree 2024 (Legislative Decree n.153/2024) (“Decree”) was published
in the Italian government’s Official Gazzette on 17 October 2024. The Decree aims to provide regulatory
certainty for hydrocarbon exploration and production whilst balancing security of supply with
environmental protection. The Decree is particularly relevant to Po Valley’s offshore asset, Teodorico.
A recent administrative court ruling (TAR) on a case raised by an environmental protection group against
the Ministry indicated that the Environmental Impact Assessment (EIA) for Teodorico must include an
evaluation of the potential impacts on two newer environmentally protected areas. These two areas,
which primarily aim to protect marine life, were not officially established by the Ministry of
Environment when the original assessment for Teodorico was filed. As it happened, the
Environmental Impact Assessment Committee had approved the project without taking such potential
protected areas into consideration. The administrative court case claimed that the Ministry had been
aware that these areas had been under consideration, even if not yet officially recognized as protected,
and therefore found fault with the positive EIA opinion on the basis that it was not comprehensive. Under
the precautionary principle, the Administrative Court has ruled in favour of the environmental protection
group(s).
PO VALLEY ENERGY LIMITED
TECHNICAL SUMMARY
67
The Company's tenure to the Teodorico project is not impacted by this ruling. The Group is now working
with the Ministry of Environment and Energy Security (“MASE”) and expects to renew the
Environmental Impact Study previously submitted taking the two new areas into consideration in
accordance with the Ministry’s requirements.
The Company continues to assess how best to realise value from its 100%-owned Teodorico off-shore
asset, either via a joint venture for development or sale.
Table 6: Total Group Gas Contingent Resources (as per CPR dated 25 July 2022 ASX announcement 26
July 2022)
Group Contingent Resources
Contingent Resources as at
Contingent Resources as at
31 December 2024
31 December 2023
1C
2C
1C
2C
Gas (bcf)
13.1
26.9
13.1
26.9
There have been no changes in gas contingent resources since the prior year.
Following meetings with MASE in February 2025 and with the 2024 Environmental Decree repealing the
previous plan of suitable hydrocarbon exploitation areas ‘PITESAI’ , it has been clarified that activities
regarding oil exploration may resume. Accordingly, contingent and prospective resources relating to Oil
resources in the the Cadelbosco and Grattasasso licences have be restated the Po Valley’s Resources and
Reserves, as originally reported in the April 2019 CGG CPR.
Table 7: Total Group Oil Contingent Resources (as per CPR dated 24 April 2019)
Group Contingent Resources
Contingent Resources as at
Contingent Resources as at
31 December 2024
31 December 2023
1C
2C
1C
2C
Oil (MMbbls)
9.4*
43.4*
-*
-*
*The Oil Contingent resources were previously removed from the statement of Resources due to the
“PITESAI” legislation in 2022 restricting activities on Oil discoveries. With that legislation now repealed,
and clarification from MASE that oil activities may resume, the above table summarises the original
reported Oil Contingent Reserves from the April 2019 CPR.
Where reported, aggregated reserves and contingent resources are aggregated by arithmetic summation
by category.
PO VALLEY ENERGY LIMITED
TECHNICAL SUMMARY
68
Current estimates of contingent and prospective resources by licence are shown in Tables 8 and 9 below:
Table 7: Gas Reserves and Resources by Field at 31 December 2024 (as per CPR dated 25 July 2022 ASX
announcement 26 July 2022) less depletion from production for the year 2024.
Licence
Project
Reserves
Contingent
Resources
Prospective
Resources
Gas Bcf
1P
2P
3P
1C
2C
3C
Low
Best
High
Selva Malvezzi
(NET 63%)
Selva (Podere Maiar1)**
1.28
7.08
17.48
Selva level A South
0.7
1.1
2.3
Selva level B North
2.2
5.6
11.2
Selva level B South
0.6
2.2
5.9
Fondo Perino
6.4
9.2
12.9
East Selva
18.3
21.9
25.6
Riccardina
8.2
24.4
81.2
d.40.AC-PY
Teodorico
27
37
48
Teodorico
7.4
10.6
14.0
PL3-C
7.9
15.9
25.0
Cadelbosco di
Sopra
Zini (Qu-B)
1.1
2.7
4.6
Canolo (Qu-A)
0.7
1.1
1.7
Canolo (Plioc)
0.4
3.6
10.5
Zini (Qu-A)
0.6
1.4
2.4
Torre del Moro
Torre del Moro
420.7
502
596.1
Prospective Resources are the estimated quantities of petroleum that may potentially be recovered by the
application of a future development project(s) relate to undiscovered accumulations. These estimates
have both an associated risk of discovery and a risk of development. Further exploration appraisal and
evaluation is required to determine the existence of a significant quantity of potentially moveable
hydrocarbons
Table 8: Oil Reserves and Resources by Field at 31 December 2024 (as per CPR dated 24 April 2019 ASX
announcement 26 April 2019)
Licence
Project
Reserves
Contingent
Resources
Prospective
Resources
Oil MMbbl
1P
2P
3P
1C
2C
3C
Low
Best
High
Cadelbosco di
Sopra
Bagnolo in Piano
6.6
27.3
80.6
Bagnolo SW
22.1
54.5
112.0
Grattasasso
Ravizza
2.8
16.1
41.6
The Oil resources were previously removed from the statement of Resources due to the “PITESAI”
legislation in 2022 restricting activities on Oil discoveries. With that legislation now repealed, and
clarification from MASE that activities may resume, the above table includes the original reported Oil
Resources as per the CPR dated 24 April 2019.
Prospective Resources are the estimated quantities of petroleum that may potentially be recovered by the
application of a future development project(s) relate to undiscovered accumulations. These estimates
have both an associated risk of discovery and a risk of development. Further exploration appraisal and
evaluation is required to determine the existence of a significant quantity of potentially moveable
hydrocarbons.
PO VALLEY ENERGY LIMITED
TECHNICAL SUMMARY
69
In reference to the reserve and resources estimation process, the Group commits to independent audit
in order to obtain a certified update of its Reserves and Resources portfolio. The last review took place
in July 2022 (refer Competent Persons Report dated 25 July 2022 ASX announcement 26 July 2022). The
reserves and resources estimates of the gas fields Teodorico and Selva were independently evaluated by
the geological and petroleum reservoir consultancy firm CGG (UK) Services Ltd in 2018 and 2019 and
reviewed in July 2022 (ASX announcement 26 July 2022). The Company aims to obtain an independent
certified update to it Reserves and Resources portfolio on completion of the current seismic campaign
and data analysis being undertaken across its Selva Malvezzi Production Concession area.
The currently is no new information or data that materially affects the information included in the July
2022 review of reserve and resource estimates and all material assumptions and technical parameters
underpinning the estimates in that review continue to apply and have not materially changed. Where
applicable, reserve estimates reported are updated for depletion from production during the year as
summarised in Tables 4 and 5.
All figures have been determined using a deterministic method except Teodorico which was estimated
using a probabilistic method.
Estimates of the recoverable volumes for each field and a detailed explanation of how this review was
carried out as required under the Chapter 5 ASX Listing Rules are provided in the ASX announcement 26
July 2022 “Revised and updated Competent Persons report on PVE assets” together with a Competent
Persons Report issued by CGG(UK) Services Ltd dated 25 July 2022. All estimates are based on
independent evaluations in accordance with the Petroleum Resource Management System PRMS
(2007/2011) as published by the Society of Petroleum Engineers (SPE).
Qualified Petroleum Reserves and Resources Evaluator:
Statements in this Annual Report regarding estimates of petroleum Reserves and Contingent and
Prospective Resources are based on the technical work carried out by Po Valley Technical Team
validated/certified by the geological and petroleum reservoir consultancy firm CGG (UK) Services Ltd.
CGG (UK) Services Ltd has approved the Reserves statement as a whole and has consented to:
(a) the inclusion of the estimated petroleum Reserves and Contingent and Prospective Resources and
supporting information in this Annual Report in the form and context in which they are presented;
and
(b) the inclusion of the Reserves statement in this Annual Report in the form and context in which it
appears.
The Group confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcement and, in the case of estimates of oil and gas
reserves that all material assumptions and technical parameters underpinning the estimates in the
relevant market announcement continue to apply and have not materially changed.
The Reserves and Resources Statement is based on, and fairly represents, information and supporting
documentation prepared by or under the supervision of Andrew Webb, Manager of Petroleum Reservoir
and Economics of CGG Services (UK) Limited (“CGG”) Reference no. 8P512. CGG compiled these estimates
to confirm with the definitions or the Petroleum Resources Management Systems (2007 and 2011) as
published by the Society of Petroleum Engineers (SPE). These estimates were prepared as part of a CPR
dated 25 July 2022 which was lodged with the ASX on 26 July 2022. Mr. Webb is qualified in accordance
with the requirements of ASX Listing Rule 5.41 and consents to the inclusion of the information in this
report of the matters in the form and context in which it appears.
PO VALLEY ENERGY LIMITED
TECHNICAL SUMMARY
70
RESERVES are those quantities of hydrocarbon anticipated to be commercially recoverable by application
of development projects to known accumulations from a given date forward under defined conditions.
Proved Reserves are those quantities of hydrocarbon, which, by analysis of geoscience and engineering
data, can be estimated with reasonable certainty to be commercially recoverable, from a given date
forward, from known reservoirs and under defined economic conditions, operating methods, and
government regulations (1P).
Probable Reserves are those additional reserves which analysis of geoscience and engineering data
indicate are less likely to be recovered than proved reserves but more certain to be recovered than
possible reserves. It is equally likely that actual remaining quantities recovered will be greater than or less
than the sum of the estimated Proved plus Probable Reserves (2P).
Possible Reserves are those additional reserves which analysis of geoscience and engineering data
suggest are less likely to be recoverable than probable reserves. The total quantities ultimately recovered
from the project have a low probability to exceed the sum of proved plus probable plus possible (3P)
Reserves, which is equivalent to the high estimate scenario.
CONTINGENT RESOURCES are those quantities of hydrocarbon estimated, as of a given date, to be
potentially recoverable from known accumulations, but the applied project(s) are not yet considered
mature enough for commercial development due to one or more contingencies.
PROSPECTIVE RESOURCES are those quantities of hydrocarbon that may potentially be recovered by the
application of a future development project(s) relate to undiscovered accumulations. These estimates
have both an associated risk of discovery and a risk of development. Further exploration appraisal and
evaluation is required to determine the existence of a significant quantity of potentially moveable
hydrocarbons.
For Contingent Resources, the general cumulative terms low/best/high estimates are denoted as
1C/2C/3C respectively. For Prospective Resources, the general cumulative terms low/best/high estimates
still apply. No specific terms are defined for incremental quantities within contingent and Prospective
Resources.
PO VALLEY ENERGY LIMITED
ASX ADDITIONAL INFORMATION
71
Additional information required by the Australian Securities Exchange Limited Listing Requirements
and not disclosed elsewhere in this report is set out below.
Information regarding share holdings is current as at 14 April 2025.
ORDINARY SHAREHOLDERS
1. TOP TWENTY SHAREHOLDERS
Details of the 20 largest shareholders of quoted fully paid ordinary shares by registered shareholding
are:
Name
Number
%
1
Mr Kevin Christopher Bailey & Mr Christopher John Bailey
135,879,916
11.72
2
Symmall Pty Ltd
125,792,058
10.85
3
Mr Michael George Masterman
86,525,732
7.47
4
Bond Street Custodians Limited
85,694,960
7.39
5
HSBC Custody Nominees (Australia) Limited
65,564,764
5.66
6
Lambert Blue Chip Investments Pty Ltd
57,500,000
4.96
7
Fuiloro Pty Ltd
55,281,743
4.77
8
Mr Kevin Bailey & Mr Wayne Dowd < Kevin Bailey Charit A/C>
37,586,434
3.24
9
Mr Kevin Christopher Bailey
34,044,724
2.94
10
Kevin Bailey & Christopher Bailey
25,000,000
2.16
11
P&N Platinum Investments Pty Ltd
24,186,805
2.09
12
Mr Laurence Mark Macri & Mrs Christine Simone Macri
15,674,624
1.35
13
Dr Ida Constable
14,071,429
1.21
14
Donus Australia Foundation Limited
12,400,000
1.07
15
Mr Laurie Mark Macri
12,000,000
1.04
16
Beronia Investments Pty Ltd
11,121,549
0.96
17
Beronia Investments Pty Ltd
10,359,110
0.89
19
Beronia Investments Pty Ltd
9,927,199
0.86
19
Mr Christopher Bailey
9,314,282
0.80
20
Mr David Geoffrey Martin
9,137,548
0.79
Total
837,062,877
72.23
PO VALLEY ENERGY LIMITED
ASX ADDITIONAL INFORMATION
72
2. SUBSTANTIAL SHAREHOLDERS
The following table shows holdings of 5% or more of voting rights as disclosed in substantial holding
notices given to the Company or, in the case of directors, information available to the Company and
disclosed to ASX in Directors Interest Notices:
Fully paid Ordinary Shares
Name
Number
%
Kevin Bailey AM
300,000,770
25.89
Michael Masterman
215,159,368
18.32
Beronia Investments Pty Ltd
119,490,777
10.31
Paul Kenneth Lambert
83,092,866
7.17
3. NUMBER OF SECURITY HOLDERS AND SECURITIES ON ISSUE
Total number of fully paid ordinary shares on issue is 1,158,961,620 held by 738 shareholders.
4. VOTING RIGHTS
The voting rights attached to ordinary shares are that on a show of hand, every member present, in
person or proxy, has one vote and upon a poll, each share shall have one vote.
5. DISTRIBUTION OS SECURITY HOLDERS
Quoted Securities
Category
Holders
%
Fully paid Ordinary Shares
%
1 to 1,000
95
12.87
8,664
0.00
1,001 to 5,000
20
2.71
57,045
0.00
5,001 to 10,000
40
5.42
315,077
0.03
10,001 to 100,000
292
39.57
12,967,484
1.12
100,000 and over
291
39.43
1,145,613,350
98.85
Total
738
100.00
1,158,961,620
100.00
6. UNMARKETABLE PARCEL OF SHARES
The number of shareholders holding less than a marketable parcel of ordinary shares is 162
shareholders with 454,861 ordinary shares, based on the Po Valley Energy Limited closing share
price of AU$0.045 on 14 April 2025.
7. ON MARKET BUY-BACK
There is no current on market buy-back.
8. UNQUOTED SECURITIES
There are currently no unquoted shares on issue.