Sound Energy Regulatory News (SOU)

28 Feb 2007 07:01

Sound Oil PLC28 February 2007 28 February 2007 Sound Oil plc("Sound Oil" or the "Company") Operations Update Sound Oil announces the following operational updates: Citarum Production Sharing Contract - Java, Indonesia Preparation is in its final stages for Pasundan No. 1, Sound Oil's first well.The Great Wall Drilling Company Rig 93, the Company's preferred drilling rig, iscurrently mobilizing from East Java to the laydown area close to the wellsite inWest Java. Despite the very wet conditions the mobilisation is 95% complete. Therig will be handed over to the operator shortly, following routine certificationby the Indonesian authorities at the end of the current extensive overhaul. Pasundan No. 1 is expected to commence drilling on 28 March although this mayslip a few days if the remaining critical rig items from China are not on siteby early March. The current operation is setting the 30 inch conductor pipeprior to spudding the well. The wellsite has suffered from the local extreme weather conditions and someland slippage has occurred which will require 7 days remediation prior todrilling. Some concrete piling of the site will be needed during drillingoperations. Pasundan No. 1 well is programmed to a total depth of 10,322 feet with aprospective objective at approximately 6,300 feet and deeper target horizonsbelow 8,500 feet. A second well, Kujang No. 1, will be drilled back to back with Pasundan and willbe located on a separate structure some 8 km to the north. Prospective recoverable resources for the Pasundan and Kujang prospects are 255and 322 billion cubic feet of gas respectively (P50 cases*). It is anticipated that an $11 million dollar 2D seismic programme extending to850 km will be acquired during the year, over a number of prospective areasacross the Citarum acreage. Sound Oil holds a 20% interest in BPREC, the 100% owner and operator of theProduction Sharing Contract. Bangkanai Production Sharing Contract - Kalimantan, Indonesia The Company has recently undertaken seismic interpretation studies over theKerendan Gas Field area in the central part of the Bangkanai PSC. As a result, alarge new prospect has been identified underlying the existing KerendanLimestone gas accumulation. The new prospect may contain up to 540 billion cubicfeet (P10*) of recoverable gas resources. A future well will be designed to passthrough the known Kerendan Limestone gas accumulation at 9,000 feet, containingreserves of 238 billion cubic feet (Proven + Probable), on its way down to thedeeper prospect at around 14,000 feet. It is anticipated that a new seismic programme will be acquired over a number ofareas during the summer including the Kerendan Gas Field, the potentially largeJupoi prospect and a number of leads Sound Oil plc has a 34.99% interest in the license through its wholly ownedsubsidiary Mitra Energia Ltd. Option award The Board of Directors have today granted options over the Company's ordinaryshares as follows: Dr Orbell, 2,000,000; Mr Rachmantio 1,250,000; Mr Heath1,000,000. The options' exercise price will be that of Sound Oil's market priceper share at today's close. The options will be vested yearly in 33.3% tranchesduring the next three years and expire in ten years. Dr Michael J Cope, Head of Exploration, Sound Oil plc, has reviewed and approvedthe operational update information contained in this announcement relating toSound Oil's Citarum and Bangkanai PSCs. Dr Cope holds BSc and PhD degrees ingeology from the University of London and has been a member of the AmericanAssociation of Petroleum Geologists since 1987 and is a Fellow of the GeologicalSociety of London. * Prospective resources, consistent with SPE (The Society of PetroleumEngineers) guidelines, are quantified in terms of the statistical probability tofind a given recoverable hydrocarbon (oil or gas) volume in a prospectivestructure considering all the geological variables involved. The P50 figureindicates a 50% chance of finding a given volume and is generally considered asthe best estimate. The P10 figure indicates a 10% chance of finding a givenvolume and is generally used to express the high estimate. Further information on the Company's operations is set out in a presentation which may be downloaded from Sound Oil's website: http://www.soundoil.co.uk/news/presentation.pdf Contacts: Tim Thompson, Buchanan CommunicationsTel + 44 (0) 207 466 5000 Gerry Orbell, Sound Oil plcTel +44 (0) 7903 861145 This information is provided by RNS The company news service from the London Stock Exchange