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28 Mar 2013 07:01
28 March 2013
Sound Oil plc
("Sound Oil" or "the Company")
Nervesa Appraisal Well Update
Sound Oil, the Italian focused upstream oil and gas company is pleased to provide an update on the forthcoming drill of the first Nervesa appraisal well.
LP Drilling SrL, the owner of the contracted TB2100S drilling rig, has informed the Company that its operations in the Netherlands are currently being finalized with mobilization to Italy expected to commence within the next two weeks. Preparations at the Nervesa site are now materially complete with the final stage being driving the 20 inch conductor to a depth of 30 metres, which will occur shortly.
Following mobilization of the rig from the Netherlands, the Company will proceed with the planned drilling schedule, which includes:
·; Rig travel time to Italy (up to 6 days)
·; Rigging up (up to 6 days), followed by well spud
·; Drilling and logging (30 days)
·; Completion and clean up (6 days)
·; Well testing (up to 5 days)
The Company looks forward to updating shareholders on rig mobilization, spud of the well and achievement of depth milestones. The results of the well will be announced after well testing is complete.
James Parsons, Sound Oil's Chief Executive Officer, commented:
"Nervesa is a 21Bscf gas discovery which was discovered by ENI in 1985, flowed for a couple of years and has an independently assessed base case value of circa US$60 million.
Following the decision to drill a second Nervesa well in 2013, the Company estimates initial annual cash flows in a success case scenario of circa US$21 million per annum, after tax and after the CSTI funding.
The successful drilling of this flagship asset will be the first step in unlocking the significant value inherent in the Sound Oil portfolio. April and May will be critical months for the Company."
For further information please contact:
Sound Oil James Parsons, Chief Executive Officer
| j.parsons@soundoil.co.uk
|
Smith & Williamson - Nominated Adviser Azhic Basirov David Jones
| Tel: +44 (0)20 7131 4000 |
Peel Hunt - Broker Richard Crichton Charles Batten
| Tel: +44 (0)20 7418 8900 |
Notes:
The estimated gas resource volume and value (on an NPV10 basis) figures mentioned above are based on a Fugro Robertson Limited best estimate of P50 contingent resources (Competent Persons Report dated October 2011). The future annual cash flows mentioned above are Company estimates in a success case scenario. Bscf means billion standard cubic feet of gas; NPV10 refers to net present value at a discount rate of 10%.
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