The Sillaro-1 appraisal well – 30 kilometres west of Bologna and Po Valley’s largest gas target in Italy – had discovered gas in the primary Pliocene target, the company said.

There were also gas indications in a deeper target and in shallower sands not previously considered as gas bearing.

Chief executive Michael Masterman said Sillaro-1 would now be cased and the well completed to allow testing of all three levels, followed by a production test later in next month.

“Wireline log interpretations from Sillaro-1 show five metres of net gas pay in high porosity sands in the primary Pliocene target, between the 2,193m and 2,233m interval,” he said.

The target Pliocene zone had an interpreted gross gas pay of 40m with the gas held in two groups of thin bed sequences containing a total net pay of approximately 5m. The well logs show porosity of 25-32% and no water.

“This thin bed sequence closely correlates with the Budrio-3 well, 300m away, which was drilled in 1956,” Masterman said.

The company also interpreted gas indications in two shallower upper Pliocene zones (1,742-1,785m and 1,935-1963m) not previously recognized as gas-bearing at nearby wells drilled in the 1950s.

“Initial wireline log analysis indicates the deeper Miocene section (between 2,491-2522m) is also interpreted as having possible gas bearing sands but this section has historically been difficult to assess from early log interpretations,” Masterman said.

“We expect that production testing will be required to definitely evaluate this interval.”

Po Valley will now case Sillaro-1 to its total depth of 2,610m to allow testing on the Upper Pliocene, Pliocene and Miocene levels.

“The commercial focus will be on the Pliocene target interval between 2,193m and 2,233m as this zone has traditionally generated excellent gas flow rates in the Po Valley,” Masterman said.

“These initial results are a positive step forward in the development of the company which in the past 12 months has successfully drilled three fields in the Po Valley – Santa Mandalena, Vitalba, and now Sillaro.”

If proved commercially viable, Sillaro-1 is 50 metres from pipeline infrastructure connecting into Italy’s national gas distribution network.

The Sillaro gas discovery follows the discovery of gas by Po Valley in its Vitalba-1 deviation well north from Sillaro near Milan.

This well will be put into a production test following completion of the Sillaro test work, Masterman said.

The company's shares rose eight cents to $1.00 at 10.10am AEST.