The prospects contain estimated resources ranging in size from 10-80 billion cubic feet of gas each, the company said.

All are contained within five new licence areas around the cities of Milan and Bologna where the Perth-headquartered gas developer has already established a near-term production footprint in three gas fields.

“All of these prospects are in northern Italy and like our imminent production fields, are expected to benefit from high quality gas, close proximity to pipeline grids and high Italian gas prices,” Po Valley chief executive Michael Masterman said.

“Detailed geological and geophysical studies are now underway over all eight prospects and are expected to be completed this year.

“Target well locations will be identified as a result of these studies with a view to drilling the first of these new field projects towards the end of 2008.”

Masterman said the expansion of the company’s northern Italian target and drilling schedule was designed to underpin a longer term growth platform.

Po Valley already has 105Bcf of gas of proven and probable (2P) reserves, with more than half of this figure in the proven reserve category.

The company has entitlements to proven, probable and possible (3P) reserves from its three fields of 130Bcf.

It currently has a 100% interest in the five new licence areas for which it has secured preliminary award ahead of final environmental clearances.

Masterman admitted that the Italian approval processes had proved longer than anticipated compared to other European jurisdictions but said Po Valley expected formal grant of the production concession for its largest natural gas field discovered to date – Sillaro – to be approved in the second half of 2007.

“We have decided to drill a second Sillaro well once the production concession is granted, to increase overall production rates, optimise total well reservoir field recovery and increase reserves at Sillaro,” he said.

“This well, Sillaro-2, will be drilled from the existing Sillaro-1D drill site and prior to maiden field production commencing.”

The deeper Sillaro Miocene structure in the field, near Bologna, will be targeted in 2008, with the first half drilling of the 2600m deep Fantuzza-1 well, located 2km from the existing first wellhead site.

Masterman said full granting of the production concession for the Castello (previously Vitalba) field near Milan was also now expected in the second half of the year.

“We expect Castello to be our first field in commercial production with tenders already called for surface plant, and pipeline construction processes underway,” he said.

Po Valley achieved flows on test of 2.8 million cubic feet a day on a quarter-inch choke from the field’s gas-bearing SanA1 and SanA2 levels.