22 August 2011
Sound Oil plc
("Sound Oil" or "the Company")
Operations update - Montemarciano
Sound Oil, the upstream oil and gas company with assets in Italy and Indonesia, announces that its subsidiary Apennine Energy srl commenced civil engineering works on 18 August at the drilling site for the farm-in exploration well, Casa Tiberi-1, at the Montemarciano permit (75% Sound Oil interest). Drilling operations are expected to commence in the next 90 days and the budgeted cost of the well to the Company is US$1.5 million.
Commenting on the above, Gerry Orbell, Sound Oil's Chairman and Chief Executive said:
"Casa Tiberi-1 is the first well that we shall be drilling as operator. The competent person estimated the risk of finding hydrocarbons to be 35% which is relatively low for an exploration well. If successful, the most likely worth to Sound is approximately US$12 million based on the present evidence but I am hoping for the upside which could be worth US$37 million."
1. The Casa Tiberi-1 well site is located in the Falconara Marittima Comune, in the Province of Ancona in the Marche Region of Italy.
2. As previously announced, a competent persons report produced by Fugro Robertson Limited estimated a 35% chance of success and base case (P50) prospective recoverable resources of 5.7 Bscf at the Casa Tiberi prospect with an estimated value to Sound Oil of US$11.6 million (NPV10 success case basis). For the upside (P10) case their estimate is 14.9 Bscf (NPV10 US$37.1 million) and for the low side (P90) case, 2.2 Bscf (NPV10 US$2.1 million). The competent persons report referred to above may be viewed on Sound Oil's website www.soundoil.co.uk.
For further information please contact:
Gerry Orbell, Chairman and Chief Executive
Michael Cope, Chief Operating Officer
Tel: 44 (0)1372 365745
Smith & Williamson - Nominated Adviser
Tel: 44 (0)20 7131 4000
Investec - Broker
Tel: 44 (0)20 7597 4000
Tel: 44 (0)20 7466 5000