Background info:
PVE has gas and oil exploration permits in Italy (Po Valley). The same valley as the winter olympics were held (Turin). They managed to obtain permits when the Italian government mandated that the monopoly ENI had to release 60% of the acreage due to EU rules about government monopolies.
I believe this happened in 2002 since then PVE has explored and appraised 130BCF in 3P reserves and are now waiting for the government to give production licenses on several gas fields. The Italian government is extremely slow. It is now a year between applications and as yet to be announced approvals.
The reason for the slowness comes down to the fact that until post 2002 they had to deal with one semi government institution ENI. Now they have to set up new frameworks/ publically scrutinised criteria ect. to ensure that everything is correct.
This is why PVE has been in a very broad sideways channel for at least a year.
Two reasons why it can be a good investment
1) Italian gas prices are if not the highest in Europe close to it
11.50AUD/mcf while companies such as QGC here in Australia are selling at 3.00AUD/mcf. Also Po Valley region is the major consumer of gas in Italy which results in low transportation cost
Gas fields are within 50KM of either Milan or Bologna. QGC,AOE,SHG are 300-400 KM from Brisbane
(somone is sure to point out that the above comparisons are with CBM producers compared to PVE conventional plays but in the end both are selling natural gas. CBM is just another way of getting gas)
The point here is that farm gates are 4 times that of Australian producers which means that the forecast production of 7.5mmcfd for PVE is equivalant revenue of 30mmcfd in Oz
PVE are forecasting approx 26million in operating cashflow (does not allow for depreciation, overheads, tax, interest, exploration)
2) Tight shareholder registry 90 million shares with approx 18 million held outside substantial shareholders. This is a two edged sword. Very illiquid which means it is hard to get a position and even harder to exit in an emergency but the upside is upward movements can and do move very quickly. That is why it has had such a large trading range.
This will do for now
Cheers Icharus
Please do your own research I am but a poor sighted bunny swimming in a tank of sharks
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