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Sound Oil Share Chat (SOU)



Share Price: 10.875Bid: 10.50Ask: 11.25Change: 0.00 (0.00%)No Movement on Sound Oil
Spread: 0.75Spread as %: 7.14%Open: 11.00High: 11.00Low: 10.875Yesterday’s Close: 10.875


Share Discussion for Sound Oil (SOU)


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crudehope
Posts: 3,188
Observation
Opinion:No Opinion
Price:12.25
View Thread (3)
RE: Po Valley energy
5 Oct '14
Ducati, only a small well but interesting all the same. May be worth taking a look at Po Valley Energy....seeing what they are all about and what their plans are.

Crude........lazing in the garden under an Indian Summer sky...........paradise!
 
Ducati2
Posts: 639
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Opinion:No Opinion
Price:12.25
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Po Valley energy
5 Oct '14
Bezzecca is located in Po Valley's 100% owned Cascina Castello concession area, east of Milan. As reported in the 2013 Annual Report1, released to the market on 24 April 2014, the field has proved gas reserves2 (1P) of 3.0 bcf and probable gas reserves (2P) of 4.2 bcf, with an initial production rate post commissioning of 20,000 cubic metres per day that is expected to more than double upon completion of the development well Bezzecca-2.

Off topic, just goes to show there is still good finds of gas in the area. Posted as it's quiet and could be of interest.
crudehope
Posts: 3,188
Observation
Opinion:No Opinion
Price:12.25
View Thread (2)
RE: Badili.
4 Oct '14
Morning Appiamma and breac.....not much to add to Appiamma's excellent post. Re Badile, the well location has been chosen by us, the land purchased and the 15000 psi well head delivered. I don't think any future partner can influence the decision of where exactly we drill. Lets just hope that they hit the sweet spot. It's encouraging to know that they have been working with very clear and clean 3d seismic images. Sometimes these are not so clear, as in some seismic we had in Java I think. But it looks like we won't be drilling it. Wonder what happens to Leonardo, as he is Project Manager. If ENI are operators he will be somewhat redundant. I'm sure James will find him something to do - we're not short of Italian projects!

Crude
Ducati2
Posts: 639
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Opinion:No Opinion
Price:12.25
Badile project
4 Oct '14
Appiamma
Posts: 621
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Price:12.25
View Thread (4)
RE: SP4
4 Oct '14
Prophet with an f - I shall remove myself to the back of the class immediately
Appiamma
Posts: 621
Observation
Opinion:No Opinion
Price:12.25
View Thread (4)
RE: SP4
4 Oct '14
Yep thanks for that Trisse, hopefully Share Profets won't mind =) JP giving a little more technical detail than he normally does in these interviews.

I agree Crude that although James and Luca are understandably guarded with predictions and are certainly not prone to hyperbole and exaggeration when discussing our various assets, they do seem to have an underlying confidence that, as a share holder, I find very reassuring.

I think I remember Luca saying Nervesa 2 is to be only 300 metre away from the the first well but was much easier to address as a vertical well as opposed to drilling from the same location. It has very high COS and he seemed confident that it would prove to be more productive than the first. Officially an appraisal well but in fact a development well; it will I believe prove to be the game changer for us financially.

Badile is of course a far more risky play but the rewards are far greater too. However, again when talking to the team you get the distinct impression that there is a confidence of success that is not reflected in the official COS. As a geologist Luca is naturally effusive when discussing rock formations etc and I have spoken with him in some detail about Badile. As Crude states the data form the 2 dry wells (drilled by ENI one to the north one to the south), comparisons with adjacent fields and later 3D seismic has enabled them to more fully understand the prospect and . They appear confident how and where they are going to drill but are also fully aware of that it is a far more challenging project. There are various uncertainties that they can of course not know until they drill, the type of hydro-carbon kitchen etc., but they believed that the collective data pointed to there being large quantities gas and condensates present.

Very happy to see the SP settle in its current range as for those of us who have been patient (some very very patient) and fully understand what this company is about now, will not be worried about watching the story unfold over the coming months. As always this is just opinion so DYOR.
breac
Posts: 1,040
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Opinion:No Opinion
Price:12.25
View Thread (2)
Badili.
4 Oct '14
Morning Crude,
"So the placement of our first well in relation to the previous unsuccessful well is critical." Could I ask you to enlarge on that very important comment. When was Badili drilled previously and by whom. Thank you

Cheers breac
crudehope
Posts: 3,188
Observation
Opinion:No Opinion
Price:12.25
View Thread (4)
RE: SP4
3 Oct '14
Trisse, thanks for taking the time to post that interview. James is happy to stake his reputation......a reputation that is increasing with every milestone the Company passes. He says it will happen...........it does!

I've long thought that this second Nervesa well could be one of the 'hidden gems'............the thought of a resource upgrade that could be a Company maker is very appetising.

At Oil Barrel Lucca & JP seemed excited about some information regarding Badile & its COS. It seems it was the gas shows from a previous ENI well that could indicate the outer margins of a big gas field. So the placement of our first well in relation to the previous unsuccessful well is critical. January/February are told months.......but they would sure heat up if we start drilling Badile. August/September gore results could prolong the season into an Indian Summer......especially as hot on the heels follows Laura!

Crude............what a year is in prospect for us. Great interview. In an AIM world full of dodgy geezers & nefarious goings on.................James Parsons is a man you can truly trust. He has honesty and integrity in spades. If he says he'll do it, he does...............& he has done all he set out to do do far. You can't argue with his track record of success here at Sound Oil!

DYOR etc & so on.........
Trisse
Posts: 415
Off Topic
Opinion:No Opinion
Price:12.25
View Thread (4)
SP4
3 Oct '14
And then there is Badile. We accept this is a high-risk exploration play. The chances of failure are higher than those of success, however given the potential numbers we are talking about in the event of a discovery the risk reward for our shareholders is highly positive. We aren’t a wildcat explorer, gambling everything on one well. If Badile doesn’t work out as we hope, this won’t mean a wipeout. Our strategy affords us the opportunity of some incredible upside, without risking the company’s future.

We have built a reputation for doing what we said we would do. Broadly speaking we have executed our strategy of 18 months ago, with only the odd delay. With this in mind, I’d like to think I can confidently say I expect we will hit our next targets. Of course, I can’t promise anything, but based on our track record of delivery so far, I believe we stand more than a good chance. And this is a business and a strategy that I am happy to put my reputation on the line for.
Trisse
Posts: 415
Off Topic
Opinion:No Opinion
Price:12.25
SP3
3 Oct '14
Thank you James, that is very interesting to hear about the potential for reserve growth at Nervesa. Can you please tell us more about Badile?

Badile is also located onshore in the Po Valley. Based on the resource estimates of our CPR this has the potential to be a 15,000boepd producing gas field, but we still have a lot to do to prove this.

Our planned exploration well at Badile is much deeper than those we drilled at Nervesa. Our target is roughly 4,000m and the drill will be more complicated because of the resulting pressure and temperatures at that depth. If there is a resource to be discovered at Badile we believe it will be gas and our mid-case estimate, if successful, is 180 BCF

It will cost €30million to drill Badile, which is why we are looking for a farm-out partner. We started the farm-out process in April and it has been progressing well. Our hope is to secure a deal by the end of this year, with a view to spudding the exploration well in January or February next year. Obviously meeting these goals is subject to finalising terms.

In terms of the prospects for the Badile project there are four main reasons we are so excited. First the area has very good 3D Seismic coverage. The data is very clean and clear. Second the geology at Badile is analogous to other producing fields within a 10-mile radius, most notably the Malossa field. Third, the local well history is very encouraging. Although these didn’t make a discovery, there were consistent hydrocarbon shows. One well in particular is of note. This was drilled to the southern part of the structure and had the type of shows one might expect on the edge of a very large gas field. Finally, the farm-out process and level of interest we have received provides a good degree of external validation for this project.

Assuming we are able to work within the timeframe we have estimated, our hope is that by August/September next year we should be able to announce the results of the exploration well at Badile.

At 12.375p, Sound Oil is valued at £51.4million. How do you respond to my original claim that this valuation looks stretched based on the current stage of development of the company?

Look, everyone is entitled to his or her opinion and much of what drives AIM stocks is subjective.

As I already mentioned earlier, my belief is that the current market cap is underpinned by our development assets, but I have to say our primary focus is not the day to day movement of our share price.

What is far more important is that we demonstrate the fundamental value of our business and take whatever steps necessary good for the long-term growth prospects of the company.

The development of Nervesa is extremely exciting in its own right and the second well alone could be transformational for Sound Oil. The fact that this asset should be producing by next summer is very significant.



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