Reabold upbeat on new Italian energy policy

1st Dec 2023 11:42

(Sharecast News) - Oil and gas investor and developer Reabold Resources responded positively to a new decree from the Italian government on Friday.

The AIM-traded firm said the decree, made as part of the Council of Ministers meeting on 27 November, aimed to enhance Italy's renewable energy production and security.

It introduced several vital provisions to promote renewable energy sources, including liquefied natural gas (LNG) production facilities.

Additionally, it opened up new licences for gas field exploitation, targeting industries with high gas consumption and competitive pricing.

The decree also incentivised the development of LNG terminals and supported carbon dioxide storage programmes.

Legislation was already in effect, with the Italian parliament now having a 60-day window to ratify it into law.

Reabold holds an 18.4% interest in LNEnergy, whose primary asset is an exclusive option for a 90% stake in the Colle Santo gas field.

The Colle Santo field is a substantial gas resource, boasting an estimated 65 billion cubic feet of 2P reserves.

Two production wells had already been drilled and flow-tested, positioning the field for development.

LNEnergy anticipated that the Colle Santo gas field could generate between €11m and €12m in gross post-tax free cash flow annually.

Furthermore, Reabold retained the discretionary right to invest an additional £1.65m in LNEnergy under the second option, as announced on 9 May and 12 September.

Should the option be exercised, Reabold would increase its ownership stake to 26.1% in the expanded share capital of LNEnergy.

"The regulatory environment in Italy is looking increasingly promising," said co-chief executive officer Stephen Williams.

"With the Colle Santo gas field, we have an asset that can help Italy improve its energy security and provide a much-needed domestic energy supply to the country.

"We look forward to updating shareholders with our progress."

At 1122 GMT, shares in Reabold Resources were down 1.73% at 0.13p.

Reporting by Josh White for Sharecast.com.