This follows an ASX announcement last week that the company had raised A$8.75 million through a capital raising with US fund manager Harbert Management Corporation, to accelerate its operations in the area.
Sillaro-1D will be drilled to a target depth of 2,250 metres, about 300 metres south of the Sillaro-1 exploration well, which was drilled by the company in July this year.
With drilling starting at 1260-metres, the deviation is expected to take 10 days to reach the target Pliocene gas-bearing zone.
A subsequent well will be drilled next year to investigate the larger, deeper Miocene target, the company said.
Po Valley said the spudding followed successful clean-up operations at Sillaro-1, where 2.2km of tubing and 1.2 kms of 7-inch casing were recovered for use in Sillaro-1D.
It said Sillaro, 25 kilometres east of Bologna, was one of several important development opportunities in Italy for the company.
“The deviation of Sillaro 1 is an important well for us,” CEO Michael Masterman said.
“We are deviating the well towards the former Budrio-2 gas well that tested commercial gas flows for ENI in the 1960s and our target is to replicate and improve on these results.”
During the September quarter, Po Valley completed a review of the Sillaro field and the Sillaro-1 drilling and testing results.
The review concluded that the Sillaro anticline structure dipped deeper and further towards the fault than expected, resulting in Sillaro-1 intersecting with the Pliocene at a lower level than forecast, close to the gas-water contact in the field, Po Valley said.
On the basis of this review, Po Valley decided to deviate the well toward the the ENI Budrio-2 and Budrio-3 wells.
Both wells showed gas in the target Pliocene at a higher level to Sillaro-1 and a production test of Budrio-2 demonstrated commercial gas flows, it said.