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Area
154.5 km2

Status:
Exploration Assets

Effective date:
23 march 2010

Term:
Initially 6 years. Extension granted until August 2017

Overview

Status: Exploration Assets

Effective Date: 23.03.2010

Term Initially: 6 years. Extension granted until August 2017

Opportunity: Badile and Zibido prospects

Gross Prospective Resources

  • Badile most likely case – 178 Bcfe (106 Bcf of gas plus 12 MMbbl condensate)
  • Zibido most likely case – 15.5 MMbbl

Net Value for Badile only: NPV €396m

1 NPV10 based on competent person’s report (CPR) by ERC Equipoise dated 2013, assuming gas price of €0.31m3 and oil price of $100bbl. Net NPV based on 80% Sound Energy equity, assuming Schlumberger 20% earn in, post discovery.

Interests:

Sound Energy 100%2

2 Schlumberger have an earn in option of 20% equity in the licence, after declaration of a commercial discovery

Permit Area History

  • The Badile Permit is situated in the Piedmont Lombard Basin in northern Italy where the principal plays are oil, gas and condensate in Mesozoic carbonates. The permit is adjacent to ENI’s Gaggiano oil field and a short distance from the giant Villafortuna-Trecate oil and Malossa gas/condensate fields, with total proven recoverable reserves quoted as over 400 MMboe.
  • The permit area was initially held by ENI until 2005. A total of 460 line km 2D and 238 km2 3D seismic were acquired between 1974 and 1990. Two dry wells were drilled within the permit area between 1978 and 1982.

Recent Permit Activity

  • Sound Energy filed an application for the Badile permit in January 2006 and the permit was awarded in March 2010. To date extensive G&G data studies have been completed on this permit.
  • In 2013 ERC Equipoise Limited completed a fully independent Competent Person’s Report for the Badile prospect. The most likely gross prospective resource estimate for the Badile prospect is 178 Bcfe equivalent (106 Bcf of gas plus 12 MMbbl of condensate) with a High Case estimate of 673 Bcfe (397 Bcf of gas plus 46 MMbbl of condensate). The most recent independent review of the prospect in late 2015, estimated the chance of success at 34%.
  • In October 2014, Sound Energy announced the purchase of a 59,140 square metre plot of industrial land in the Lombardy region of Italy for a total consideration of Euro 1.8 million (excluding VAT). The land will host the drill site for the Moirago-1dir exploration well, the initial well to target the Badile prospect. Further production wells can also be drilled from this location, to exploit the discovery.
  • In March 2015, Sound Energy announced that it had received the approval of the Environment Impact Assessment (“EIA”) for the Moirago-1dir exploration well from the Lombardy regional government. In the meantime, UNMIG supported the approval process by granting a permit suspension of 18 months. This effectively extends the Badile permit until 13th August 2017. Sound Energy therefore has all approvals in place to drill the exploration well.
  • In July 2016, Sound Energy announced that Schlumberger have agreed to fund 30% of the Moirago-1dir exploration well, for an option to acquire a 20% net interest in the Badile licence, at any point following the declaration of a discovery.
  • On 28th November 2016, Sound Energy entered into a binding agreement with Pergemine for the use of the 3000 HP EMSCO C3 No.20 rig for the drilling of the Badile exploration well. The Moirago-1dir well drilling operations will commence in Q1 2017.The well is expected to be completed by the end of Q2 2017.
  • The permit contains a further prospect called Zibido. Zibido is a relatively low relief, fault-controlled structure covering an area of about 6 km2, in a fault terrace at Triassic level immediately adjacent to the Gaggiano High. The reservoir target is the same as that in the producing Gaggiano field to the west. In 2011 Fugro Robertson estimated a STOIIP of 63 MMboe, with associated recoverable resources of 15.5 MMboe (most likely case). The Zibido prospect provides Sound Energy with further options in the licence. Zibido is largely independent of the Badile prospect.

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