Sound Oil plc

("Sound Oil" or "the Company")

Acquisition of Celtique Energie SpA and Private Placement Heads

Sound Oil, the upstream oil and gas company with assets in Italy and Indonesia is pleased to announce the acquisition of Celtique Energie SpA ("Celtique") which materially uplifts Sound Oil's core NPV, together with the signature of Heads of Terms for a private placement of new ordinary shares.

Celtique is a private Italian company that owns 50% working interests in three permits in Italy:

·          Torrente Alvo (Strombone oil discovery)

·          Carita (Nervesa gas discovery)

·          Monte Negro (gas exploration)

Sound Oil previously held a 50% interest in each of these permits which now increases to 100% as a result of the acquisition.

The total consideration is US$9.0 million comprising US$5.0 million in cash from the Company's existing funds (cash consideration of US$4.4 million and US$0.8 million in settlement of an inter-company loan net of US$0.2 million cash held by Celtique), 59,003,029 Sound Oil ordinary shares to the value of US$2.5 million (locked in for between 6 and 24 months) and 32,995,553 Sound Oil ordinary shares to the value of US$1.5 million (not subject to a lock in); all the consideration shares are subject to an orderly marketing arrangement.  The total acquisition price represents US$1.8/boe.

All three permits have been the subject of an updated Competent Persons Report undertaken by Fugro Robertson which included the following key estimates in relation to Celtique's permits:

·          Best estimate of contingent oil resources (2C) at Strombone of 6.4 MMbo (3.2 MMbo Celtique share) with a NPV10 success case of US$131.0 million (US$65.5 million Celtique share).

·          Best estimate of contingent gas resources (2C) at Nervesa of 20.7 Bscf (10.4 Bscf Celtique share) with a NPV10 success case of US$61.6 million (US$30.8 million Celtique share).

In addition the Company has signed Heads of Terms with Astin Capital Management Limited ("Astin") on behalf of investment funds managed by Astin to fund drilling operations with a minimum of £4 million new equity across two tranches of ordinary shares.  The funding is subject to a final legal agreement to be completed within 30 days with key terms including:

·          Shares to be issued at 90% of the average price over the preceding 40 days.

·          Three year warrants will be issued at a ratio of 6 warrants for each 10 shares issued.  These warrants will be exercisable any time at 110% of the average price of the underlying shares for the 40 trading days prior to the date of issue.

·          Potential for the private placement (on the same terms and timeline) to be increased up to an additional £6 million for future acquisitions and development.

·          Astin (including connected funds and investors) will not acquire more than 25% of the issued share capital.

The Company intends to use the funds raised for drilling operations, including the Nervesa discovery, during 2012.

Commenting on the above Gerry Orbell, Sound Oil's Chairman and CEO said:

"This acquisition marks a very important step for the Company, as reinforced by the updated Competent Persons Report.  We now own 100% of both Nervesa and Strombone which together are estimated to be worth over US$190 million (NPV10 success case).  As sole owner and Operator, Sound is now able to control the pace of activity and it remains our intention to drill Nervesa in 2012."

For further information please contact:

Notes:

1.  The information contained in this announcement has been reviewed by Dr M. J. Cope BSc PhD CGeol FGS, a qualified petroleum geologist.  The basis of the contingent resource estimates referred to above is consistent with SPE (The Society of Petroleum Engineers) guidelines.  "MMbo" means million barrels of oil; "Bscf" means billions of standard cubic feet of gas; "boe" means barrels of oil equivalent; "NPV10" means net present value at a 10% discount rate.  A summary of the Fugro Robertson CPR referred to above will be made available on the Company's website.

2.  Celtique, which was formed to hold the three permits referred to above, is pre-revenue and made a loss of €0.2 million in the year ended 31 March 2011 and had net assets of €0.1 million as that date (these figures are unaudited).

3.  Application will be made for the shares to be issued to Celtique referred to above to be admitted to trading on AIM and this is expected to occur on 18 November 2011.

4.  Following the issue of the consideration shares issued to Celtique referred to above, Sound Oil will have 1,713,943,892 ordinary shares in issue with each share carrying the right to one vote.  There are no shares held in treasury.  The total number of voting rights in the Company will therefore be 1,713,943,892.  The above figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, the Company under the Disclosure and Transparency Rules.

5.  Astin is an FSA registered investment manager arranging capital market transactions. In providing capital market solutions, the Astin team works closely with management and aligns the interest of investors with that of the issuer. Astin issuers are typically mid-size listed corporate clients seeking growth capital to realise their strategic objectives.