LNEnergy – Italy

Reabold owns a 29.2% equity interest in LNEnergy.

LNEnergy is a private, UK registered company with extensive industry experience in Italy.

• LNEnergy’s  primary asset is an exclusive option over a 90% interest in the onshore Colle Santo gas field in Abruzzo, Italy, discovered in 1966.
• Colle Santo is the largest onshore proven undeveloped gas field in mainland Western Europe with 65Bcf of gross 2P reserves (RPS estimate, September 2022)
• The project is development ready, subject to permits: two wells have already been drilled and no additional drilling is required
• The project is a low risk, small scale LNG development concept, with first gas targeted for 2025

The increased investment in LNEnergy supports the development, engineering and approvals process prior to debt financing to bring the project to first gas.

Colle Santo has the potential to generate an estimated €11-12m of post-tax free cash flow per annum according to LNEnergy Management estimates, at 9 mmcf/d sales gas and €45/MWh.

The Colle Santo gas field – project overview

Colle Santo is a well-appraised field ready for development

• Seven out of eight wells drilled have produced gas during testing
• The field is covered by 2D seismic shot between the 1960s and 1980s, with good well control

Two wells (MP-1 and MP-2) have already been drilled and are ready for production. The wells have a combined test rate of 20.5 mmcf/d, and minimal geological risk.

The LNEnergy project page can be accessed through the following link: www.sviluppocollesanto.it

A Competent Persons Report (CPR) completed by RPS Energy Canada Ltd on the Colle Santo Gas Project can be found here.

The development plan

The development plan for Colle Santo will produce small-scale LNG in conjunction with proposed contract operator Italfluid, to produce initially at 10 mmcf/d from the existing two wells with 20+ years of ultimate production. Italfluid is a private Italian, integrated EPC contractor with 45 year industry history. Italfluid will build and operate the plant and provide the LNG equipment for up to 48,000 tonnes per year.

The LNG will be trucked a short distance (7 km) to an entry point into the SNAM transmission grid and there will be on-site CO2 capture of 1,400 tonnes CO2 equivalent per year.

Colle Santo is a well invested, proven discovery gas field ready for development. Historical operations were suspended due to the unpopular large footprint development plan.

The approval process

The previous development concept (2016) involved a large footprint that was unpopular with the local community. The revised small-scale LNG development has smaller land footprint and strong environmental credentials. The project has strong environmental credentials, including CO2 capture and hydrogen production.

Reabold has undertaken significant due diligence work, resulting in increased confidence in the likelihood of permits being granted for the Colle Santo field development. This is at a time when there is an increased focus on energy security in Italy and a more favourable regulatory environment.

The Environmental Impact Study (“EIS”) for the new small-scale LNG development plan at the Colle Santo gas field was filed with the Ministry of Environment and Energy Security and the link to this submission can be found at https://va.mite.gov.it/it-IT/Oggetti/Info/10561

As part of the ongoing concession application process for Colle Santo, LNEnergy was asked to fully respond to a few final questions from the VIA Commission presented to LNEnergy on July 29th 2024. On September 13, 2024 LNEnergy submitted responses by way of secure certified electronic mail.

The Ministry of Infrastructure and Transport (“MIT”), regarding LNEnergy’s small scale LNG plant development in Italy, has issued an authorization to proceed letter. The letter was issued to LNEnergy srl by the General Directorate for Dams and Water Infrastructure, with the condition that LNEnergy srl will start monitoring activities six months prior to commencing production and maintain a joint monitoring program with the operator of the nearby Bomba dam.

LNEnergy srl believes that this is a fundamental and important authorization that will no doubt be taken into due consideration in the coming days by the VIA Commission of the Ministry of Environment and Energy Transition (“MASE”), which is currently finalizing its review of the Company’s gas to LNG development plan.

The Company believes that following receipt by the VIA Commission of LNEnergy’s responses to the public consultation, it has completed all of the required documentation, therefore allowing a final decision by the VIA Commission to be issued within a short period of time.