RNS Number : 2684H
Sound Oil PLC
10 July 2012

10 July 2012


Sound Oil plc

("Sound Oil" or "the Company")


Operations Update - Indonesia


Sound Oil, the upstream oil and gas company with assets in Italy and Indonesia, is pleased to announce the following update on its operations in Indonesia.


Citarum PSC, Java (Sound Oil 20%)


The Operator of the Citarum block has released a detailed update on the Jatayu-1 exploration well.  A 7" casing has been successfully installed in the present sidetrack immediately above the gas-bearing section encountered in a previous sidetrack where some 390 feet of gross gas-bearing section has been recognized below 5530 ft TVD (true vertical depth). This interval displayed extremely high mud log gas readings and approximately 600 psi overpressure.  Gas shows were still present at the bottom of the previous sidetrack at approximately 5920 ft TVD,  when the drill-pipe stuck. This required the present sidetrack to be drilled.  It is the intention now to drill ahead below the casing to approximately 6000 ft TVD and obtain wireline logs over the section of interest.  Dependent on logging results a decision will be taken as to whether to target the Parigi objective, some 1700 feet deeper, or to stop drilling and test the well.


Bangkanai PSC, Java (Sound Oil 5%)


The Operator has reported to partners that mobilization of the drilling rig for the Kerendan field development and West Kerendan exploration well is ongoing following some minor delays in shipping the equipment along the Barito River to the Luwe Hulu staging area in Kalimantan.  The rig is now 40% rigged-up and operations are expected to start in August.



Gerry Orbell, Sound Oil's Chairman and Chief Executive commented:


"The Jatayu prospect is proving a significant exploration project for Sound.  Already we have encountered a gross gas column comparable with some of the larger surrounding fields in a secondary objective above the main target zone. The successful installation of the liner has isolated the problematic section which necessitated the previous sidetrack operations.  The Jatayu well will be followed by exploration wells at Geulis and Cataka on the Citarum permit, all of which will be drilled by the same rig.


We are pleased that the Kerendan project is now progressing satisfactorily.  The operations in central Kalimantan present some challenging logistics and we are very pleased that our Operator is now bringing this project to the execution phase".



For further information please contact:


Sound Oil

Gerry Orbell, Chairman & Chief Executive

Michael Cope, Chief Operating Officer


Tel: 44 (0)1372 365745


Smith & Williamson - Nominated Adviser

Azhic Basirov

David Jones


Tel: 44 (0)20 7131 4000

Investec - Broker

David Flin


Tel: 44 (0)20 7597 4000

Buchanan - Financial PR

Tim Thompson

Ben Romney

Helen Chan


Tel: 44 (0)20 7466 5000





1. The full text of the Citarum section of the Pan Orient operations update released on 9 July 2012 stated:


"Since the last operations update, the Jatuyu-1 well was drilled to a depth of approximately 5,920 feet true vertical depth ("TVD"). Strong over pressure estimated at approximately 600 psi and extremely high mud gas readings of up to 80% were observed between approximately 5,530 and 5,920 feet TVD with difficulty maintaining adequate mud weight from 5,631 feet due to the influx of gas.  This section drilled was inter bedded sandstone and shale with an inferred gas column based on the mud log data of approximately 390 feet.  Some of the best gas shows were encountered at the bottom of the drilled section.  While conducting a wiper trip from 5,920 feet the drill string became stuck and was backed off to 5,300 feet TVD.


After sidetracking, the well was drilled to a depth of approximately 5,500 feet TVD and 7" casing was set just above the interval where high mud gas and overpressure was encountered in the previous well bore.  We will be drilling ahead through the zone of high mud gas readings starting within the next 24 hours and stop drilling at approximately 6,000 feet TVD to log the well.  A decision to continue drilling an additional 1,700 feet down to the main Parigi reservoir target will be made after the analysis of the wireline logs. The possibility exists that we may decide to stop drilling and immediately test the well.


We are very encouraged by:  1) the indications of gas and reservoir we have observed in this well thus far, and 2) the fact we were still drilling within sands with high mud gas readings at 5,920 feet TVD when the drill pipe became stuck, suggesting a possible gas column of 390 feet that we appear yet to have encountered the base of.


A number of initiatives have been implemented with regard to personnel and present / future well design in order to best deal with the difficult drilling that has been experienced to date.


Total firm capital expenditures at the Citarum PSC are estimated at approximately US$16.6 million for the remainder of the three well program, excluding testing."


2. The information contained in this announcement has been reviewed by Sound Oil's Chief Operating Officer, Dr M. J. Cope BSc PhD CGeol FGS, a qualified petroleum geologist.


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