24 August 2011
Sound Oil plc
("Sound Oil" or "the Company")
Rapagnano Concession update
Sound Oil (AIM:SOU), the upstream oil and gas company with assets in Italy and Indonesia, announces that the Italian Ministry for Economic Development has awarded the Rapagnano Concession, located in the Marche Region of central Italy, to the Company's wholly-owned subsidiary Apennine Energy srl. The award is subject to the acceptance of any environmental impact assessment that may be required by the Marche regional authorities. In view of the previous production history at the site which is within an industrial area, the Company anticipates that this acceptance will be granted.
The Rapagnano gas field on the concession had previously produced 4.1 Bscf of gas into the national network until it was shut-in in 2001. A recent reservoir engineering study by consultants Senergy (GB) Ltd has estimated that an additional 2.45 Bscf of gas is potentially recoverable from the field. Apennine's objective will be to put the field back on stream at an approximate estimated cost of US$0.5 million with expected first revenue in Q2 of 2012.
Commenting on the news, Gerry Orbell, Sound Oil's Chairman and Chief Executive, said:
"This is very encouraging news. The Italian Ministry has awarded the Rapagnano field to us at no cost with the expectation that we can put it back on stream quickly. We intend to produce to the national gas network through the connection which is on site and provide an early cash flow with minimal investment."
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
The information contained in this announcement has been reviewed by Dr M. J. Cope BSc PhD CGeol FGS, a qualified petroleum geologist. The recoverable gas estimate referred to above represents a best estimate of reserves consistent with SPE (The Society of Petroleum Engineers) guidelines. "Bscf" means billion standard cubic feet of gas.