7 February 2012
Sound Oil plc
("Sound Oil" or "the Company")
£4M Funding for Nervesa Well
(Completion of Private Placement and Achievement of Funding for Nervesa Appraisal Well)
Further to the announcement made on 1 December 2011, Sound Oil, the upstream oil and gas company with assets in Italy and Indonesia, announces the completion of the second tranche of the private placement through Astin Capital Management Limited.
The second tranche amounts to £4 million consisting of 262,587,803 shares priced at 1.5233 pence per share (being 90% of the volume weighted average price over the preceding 40 trading days) and 157,552,682 associated warrants exercisable at any time during their three year term at 1.8619 pence per share (being 110% of the volume weighted average price over the preceding 40 trading days). This results in a total placement, across the two tranches, of £6 million (excluding any warrant exercise) and fully funds the significant Nervesa gas appraisal well.
The Company intends to use the funds raised and any additional funds from the exercise of warrants for drilling operations in 2012, including the Nervesa discovery. Nervesa is an estimated 21 Bscf gas discovery in Northern Italy with an independently assessed NPV10 success case of US$62 million.
Application has been made for the new ordinary shares to be admitted to trading on AIM and this is expected to become effective on 10 February 2012. Following the issue of the new shares, the Company will have 2,095,787,351 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 is therefore 2,095,787,351 and this 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.
Commenting on the above Gerry Orbell, Sound Oil's Chairman and CEO said:
"I am delighted that we have secured these funds which allows us to get on with drilling the important Nervesa gas discovery in Italy where we are operator and have a 100% holding. We expect to drill this well in mid 2012 and have already advanced the procurement of long lead items and identified the drilling location. I am also very pleased that in these difficult financial times Astin and their own investors have shown great confidence in the Company's ability to deliver its objectives."
For further information please contact:
Gerry Orbell, Chairman and Chief Executive
James Parsons, Chief Financial Officer
Tel: 44 (0)1372 365745
Smith & Williamson - Nominated Adviser
Tel: 44 (0)20 7131 4000
Investec - Broker
Tel: 44 (0)20 7597 4000
Buchanan - Financial PR
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 basis of the contingent resource estimate and NPV referred to above is consistent with SPE (The Society of Petroleum Engineers) guidelines. "Bscf" means billions of standard cubic feet of gas; "NPV10" means net present value at a 10% discount rate. A summary of the Fugro Robertson CPR containing these estimates is available on the Company's website.