Gas Production ITALY AND PO VALLEY Gas Consumption 3 tcf p.a. - PowerPoint PPT Presentation

Gas Production

ITALY AND PO VALLEY  Gas Consumption 3 tcf p.a.  Growing at 2-3% p.a.  Gas Production 27 tcf to date  Europe’s 2nd largest Po Valley onshore gas province  Europe’s largest Val D’Agri onshore oil field  Po Valley/Northern Adriatic was monopoly of ENI/Agip for 50 years Page 1

PVE January 2005 ITALIAN GAS PRICE: EUR14cents/cubic metre Undrilled Castello 100% Sillaro 100% Undrilled Sant’Alberto 50% 1 well drilled Page 2

PVE January 2009 ITALIAN GAS PRICE: EUR22 cents/cubic metre 1 well drilled Castello 100% Sillaro 100% 1 well drilled Sant’Alberto 100% 1 well drilled + Production concession appl. Undrilled Bezzecca 100% nd half 2010 Drilling planned for 2 Fantuzza 100% Correggio 100% Preliminary award 100% Preliminary award Offshore adriatic Prospect definition work underway 12 Exploration 100% Projects Page 3

PVE MAY 2010 ITALIAN GAS PRICE: EUR27cents/cubic metre 1 well drilled + Surface plant installed + Production Castello 100% Sillaro 100% 2 wells drilled + Surface plant installed + Production Invested Capital Sant’Alberto 100% 1 well drilled + Production concession appl. € 35m/AUD50m 1 well drilled + Production concession appl. Bezzecca 100% nd half 2010 Drilling planned for 2 Fantuzza 100% Correggio 100% Drilling planned for 2011 100% Preliminary award Offshore adriatic Gradizza, Cembalina planned for drilling in the next 18 12 Exploration 100% months Projects Page 4

RESOURCE BASE Po Valley Assets  11 License areas  2 Production projects  Sillaro  Castello  2 Drilling projects  Sant’ Alberto  Bezzecca  5 Gas Discoveries for appraisal  12 Gas Exploration prospects  2 Oil opportunities Nov 2009 Page 5

PRICES RISING DUE TO FALLING EUR AND RISING OIL PRICES ITALIAN ENI GAS RELEASE PRICE: APRIL UPDATE € cent/m 3 Summary USD/Mcf AUD/Mcf Apr. 10 Month 28.35 10.57 11.40 May 10 Forecast 29.50 11.00 11.86 2010 Average 29.86 11.26 12.10 34.90 12.93 13.81 2011 Cal Source: ENI Gas Release and forecast sourced from Alba Soluzioni; Driver parameters and forward curves sourced from Bloomberg Page 6

PVE RESERVE & RESOURCE CATEGORIZATION Page 7

RESOURCES MANAGEMENT ASSESSMENT PROJECT CURRENT KEY RISKS / REVIEW PLAN TIMING OF RESERVES / ASSESSMENT (BCF) UNCERTAINTIES RESOURCES REVIEW 1P 2P RESERVES  Pressure Decline Independent, external review of new CASTELLO 4.6 6.3 pressure data May / June 2010  Reservoir Description Independent, external review of:   Initial production performance SILLARO 10.4 14.4 Production 31 July 2010  Reservoir model Performance PROJECT CURRENT KEY RISKS / REVIEW PLAN TIMING OF RESERVES / ASSESSMENT (BCF) UNCERTAINTIES RESOURCES REVIEW 1C 2C CONTINGENT RESOURCES  DEVELOPMENT PENDING SANT’ ALBERTO   8.0 12.9 Structural Complexity New seismic data 3Q 2010   Reservoir Model Independent, external review of:  Production - Structural mapping Performance - Reservoir model - Development plans   BEZZECCA 0.7 3.1 Reservoir Model External review completed Completed  Production Performance  DEVELOPMENT UNCLARIFIED   FANTUZZA - 26.6 Reservoir Quality / Independent, external review of: 31 July 2010 - producibility Reservoir model - Volumetric analysis Page 8

RESOURCE MANAGEMENT ASSESSMENT PROJECT CURRENT KEY RISKS / UNCERTAINTIES REVIEW PLAN TIMING OF ASSESSMENT RESERVES / (BCF) RESOURCES REVIEW 1C 2C  DEVELOPMENT UNCLARIFIED / LICENCE AWARD PENDING   CORREGGIO - 35.0 Reservoir Model Independent, external review of Stage 31 July 2010  Production Performance 1 Development Plan   AR.168PY To be estimated Production Performance Independent, external review of: Dependent on final permit - LICENCE Reservoir model award - Development Plan   RAVIZZA To be estimated Reservoir Quality Independent, external review of: Dependent on final permit  - Production Management Reservoir model award  - Commercial Viability Development Plan   BAGNOLO IN To be estimated Reservoir Quality Independent, external review of: Dependent on final permit  - PIANO Production Management Reservoir model award  - Commercial Viability Development Plan Intent to carry out external audit of reserves/resources estimation processes at year end 2010 Page 9

PO VALLEY ASSETS REVIEW - CASTELLO  Production start 17 Dec 2009  Pressure decline being investigated  Sillaro-2 drilled August 2009 - SILLARO  Plant installed and production started - SANT’ALBERTO  New Seismic being acquired  Bezzecca-1 drilled April 2009 - BEZZECCA  Reservoir study reduces reserves  Development plan underway  G&G work near completion - CORREGGIO  1-2 wells planned for 2011  First phase G&G study complete - AZZURRA  12 Prospects - EXPLORATION  Cembalina and Gradizza first wells to be drilled Page 10

CASTELLO PLANT INAUGURATION: 12 JANUARY 2010 Page 11

CASTELLO PRODUCTION SUMMARY: 17 DEC 2009 - 30 APRIL 2010 Castello Production Summary 80,000 8,000,000 75,000 70,000 7,000,000 65,000 60,000 6,000,000 55,000 Cumulative Gas Production (m3) 50,000 5,000,000 Daily Prod (m3/day) 45,000 40,000 4,000,000 35,000 30,000 3,000,000 25,000 20,000 2,000,000 15,000 10,000 1,000,000 5,000 0 0 16/12/09 23/12/09 30/12/09 06/01/10 13/01/10 20/01/10 27/01/10 03/02/10 10/02/10 17/02/10 24/02/10 03/03/10 10/03/10 17/03/10 24/03/10 31/03/10 07/04/10 14/04/10 21/04/10 Page 12

CASTELLO STRUCTURE Page 13

PO VALLEY ASSETS REVIEW - CASTELLO  Production start 17 Dec 2009  Pressure decline being investigated  Sillaro-2 drilled August 2009 - SILLARO  Plant installed and production started - SANT’ALBERTO  New Seismic being acquired  Bezzecca-1 drilled April 2009 - BEZZECCA  Reservoir study reduces reserves  Development plan underway  G&G work near completion - CORREGGIO  1-2 wells planned for 2011  First phase G&G study complete - AZZURRA  12 Prospects - EXPLORATION  Cembalina and Gradizza first wells to be drilled Page 14

SILLARO SUCCESSFULLY DRILLED AND TESTED  6 reservoir levels confirmed  2 new previously untested levels  Well completed safely on schedule on budget Page 15

SILLARO PLANT 100% COMPLETE AND IN PRODUCTION On the left side the Major of Medicina town visiting the plant with Po Valley Chairman ON THE LEFT SIDE THE REPRESENTATIVE OF BOLOGNA MINISTRY MR . GIACCHETTA AND THE MAJOR OF THE MEDICINA TOWN MR. RAMBALDI VISITING SILLARO PLANT Page 16

FANTUZZA CAN FEED INTO SILLARO  Targeting 2,600m Miocene structure  Previously drilled and tested by ENI  50km of seismic acquired and processed  Fantuzza 1 site selected, drilling approvals in process, equipment purchased and drilling rig contracted  Expected to spud in 2010  Sillaro surface plant and pipeline sized to process Fantuzza (2km away)  Cost € 4m  Key uncertainties: reservoir quality, producibility Page 17

PO VALLEY ASSETS REVIEW - CASTELLO  Production start 17 Dec 2009  Pressure decline being investigated  Sillaro-2 drilled August 2009 - SILLARO  Plant installed and production started - SANT’ALBERTO  New Seismic being acquired  Bezzecca-1 drilled April 2009 - BEZZECCA  Reservoir study reduces reserves  Development plan underway  G&G work near completion - CORREGGIO  1-2 wells planned for 2011  First phase G&G study complete - AZZURRA  12 Prospects - EXPLORATION  Cembalina and Gradizza first wells to be drilled Page 18

SANT’ALBERTO – SEISMIC TO BE ACQUIRED IN MAY Block 5 Page 19

PO VALLEY ASSETS REVIEW - CASTELLO  Production start 17 Dec 2009  Pressure decline being investigated  Sillaro-2 drilled August 2009 - SILLARO  Plant start up underway - SANT’ALBERTO  New Seismic being acquired  Bezzecca-1 drilled April 2009 - BEZZECCA  Reservoir study reduces reserves  Development plan underway  G&G work near completion - CORREGGIO  1-2 wells planned for 2011  First phase G&G study complete - AZZURRA  12 Prospects - EXPLORATION  Cembalina and Gradizza first wells to be drilled Page 20

BEZZECCA INTERPRETATION BEZZECCA SCHEMATIC CROSS-SECTION POST BEZZECCA-1. BEZZECCA SCHEMATIC CROSS-SECTION PRE BEZZECCA-1.   Remaining gas in place significantly reduced Remaining gas in place 70bcf   Discontinuous / complex reservoir distribution Continuous sand reservoir model   Low recovery factor due to semi-isolated reservoir bodies Assumed 57% recovery factor based on water drive recovery mechanism. Resulting in estimate of 44bcf recoverable  Overall reduction in recoverable resources to 3.1bcf resources  2 well development with lower recovery per well Page 21

BEZZECCA 2 (CASCINA S.PIETRO PERMIT) a’ a a  Target depth 2000m da inserire  Pliocene - Miocene  Contingent Resources 2.4Bcf a’ Page 22

BEZZECCA CAN FEED INTO CASTELLO Page 23