Last checked at 1 Oct 2012 07:00
1 October 2012
Sound Oil plc
("Sound Oil" or "the Company")
Operations Update: Rapagnano Gas Field Development
Sound Oil, the upstream oil and gas company with assets in Italy and Indonesia, is pleased to announce the following operations update on its Rapagnano gas production project.
The Company has received approval from the Marche regional authorities of its Environmental Impact Assessment for the re-start of gas production from the field. It is expected that the final approval from the Italian Ministry of Economic Development will follow in approximately one month. Operations at the site will then commence with a view to achieving first production before the end of the year.
As previously announced, the Italian engineering company, CSTI S.r.l. has been appointed to assist with the project and will provide 52% of the total development capital costs under a funding contract.
The Rapagnano field, located in the Fermo Province (Marche), onshore Italy, was discovered in 1952 and had produced 4 Bscf dry gas from two Pliocene sandstone reservoirs until 2001, when the well was shut down because of high water production from the upper reservoir level. The new plan of production will involve closure of the upper reservoir and opening again the lower reservoir which was previously producing without significant associated water. Sound Oil has estimated future production from the lower reservoir of a further 1.3 Bscf (P50) over a thirteen year field life.
The Company is finalising contract details with a local gas distributor, for sale of the gas via the nearby pipeline system at a seasonally adjusted average price of $11.30/Mscf for the first year of production.
Gerry Orbell, Sound Oil's Chairman and Chief Executive, commented:
"Rapagnano represents a key strategic milestone of achieving first revenue for Sound Oil. We are pleased that the key environmental approvals in the application process have now been granted and that the project is progressing to the expected schedule".
For further information please contact:
Sound Oil Gerry Orbell, Chairman & Chief Executive Michael Cope, Chief Operating Officer
| Tel: +44 (0)1372 365745
|
Smith & Williamson - Nominated Adviser Azhic Basirov David Jones
| Tel: +44 (0)20 7131 4000 |
Westhouse - Broker Antonio Bossi Jonathan Haines
| Tel: +44 (0)20 7601 6100 |
Buchanan Tim Thompson Helen Chan Tom Hufton
| Tel: +44 (0)20 7466 5000
|
The information contained in this announcement has been reviewed by Sound Oil's Chief Operating Officer, Dr M. J. Cope BSc PhD CGeol FGS, a qualified petroleum geologist. "Bscf" means billions of standard cubic feet of gas; "Mscf" means thousands of standard cubic feet of gas; "P50" refers to a 50% chance of finding a given volume and is consistent with SPE (The Society of Petroleum Engineers) guidelines.