With production from Sillaro in decline, one of its two producing assets, and the fall in oil and gas prices making its other assets less attractive, the company says it needs to strengthen its balance sheet to enable it to focus on advancing its high-value priority projects in Italy, rather than tinkering at the edges with its smaller potential developments, despite robust Italian energy prices.
It will also take a hit on the disposal of the La Prospera (75%) licence, including the Gradizza gas discovery, for a below book value $2.73 million to Aleanna Resources.
It hopes to pocket some $300,000 in the event the production licence is granted by the end of August.
PVE maintains that it is not been accurately valued on the ASX, where it sees only minimal trading.
So far this year the company has launched an unmarketable parcel sale facility and it has restructured its reserve based lending facility with its primary lender Nedbank, under which the loan has reduced from $3.2 million to $851,380.
It expects to extinguish the facility by September 30 from its existing cash of $3.6 million at December 31.
The company has recently entered into a short term unsecured bridging loan facility pending completion of a planned low-cost workover at Sillaro with director Byron Pirola's Beronia Investments for up to $445,000, of which half has been drawn down.
The planned rigless workover at Sillaro is designed to access remaining gas from completed and non-completed levels.
If successful, it is anticipated that production from Sillaro will increase from a current average of 10,000 cubic metres per day to 30,000cu.m per day.
The board says the best option for shareholders is to restructure the company, starting with a $1.75 million capital raising, selling its smaller assets such as Sant'Alberto, Vitalba and Bezzecca, as well as Sillaro via the disposal of its NorthSun Italia business, in order to reduce its need for working capital.
It will also reduce the board to just three directors.
It may then continue as an unlisted public company without the administration and compliance costs involved in being listed, assuming shareholders approve the move.
The sale of assets and the company as a whole has drawn out come offers, but PVE says none have been sufficiently attractive, but it will consider all offers.
One of PVE's more attractive assets is the offshore gas field, Teodorico, will not be affected by legislation banning developments within the 12 nautical mile limit.
The surrounding AR94PY licence will not be reduced either, at least for exploration activities, although a development licence within the moratorium area will not be granted for any discoveries.
The company's other major prospective appraisal asset, Selva, is expected to be awarded a drilling authorisation before the end of the year, which PVE then hopes to farm out.
The raising is a 2.5-for-1 pro-rata rights issue offer pitched at $0.005 each to help fund the Sillaro work the Selva approvals and the repayment of loans, with around $300,000 left over for working capital.
The offer is at a massive 72% to the volume weighted average price of $.018 over the past three months.
About half the offer is underwritten by Symmall, Fuiloro, Beronia Investments and Supervised Investments.
Symmall is an entity associated with PVE founding director Michael Masterman, while Fuiloro and Supervised Investments are existing shareholders.
In the event only the underwriters take up their shares they will emerge with 85% control of PVE, up from 51.73% today.
