20 December 2012
Sound Oil plc
("Sound Oil" or "the Company")
Sound Oil, the Italian focused upstream oil and gas company is pleased to provide the following update on its operations:
Nervesa Appraisal Well (Veneto, Italy, 100%, Sound Operated)
As previously announced, the Environment Impact Assessment was approved by the Treviso Province authorities on 8th November. The Ministry / Region approval process continues with the Company estimating that final approval for the drilling operation will be received in January with well spud expected around the end of January.
The Company is pleased also to announce dates for an investor site visit, hosted by the Executive team, on 21st and 22nd February 2013. This will be an opportunity for investors to observe the drilling first hand. For a draft schedule for the site visit please contact Tom Hufton on firstname.lastname@example.org or 0207 466 5167.
The Company is also pleased to confirm that it has decided to maintain a 100% ownership position for the moment on this licence, despite recently having received various approaches and one firm (and attractive) offer.
Laura Appraisal Well (Calabria, Italy, 100%, Sound Operated)
The Laura permit is expected to be awarded early in the new year.
Following discussions with UNMIG, the Company has confirmed its intention to drill the offshore reservoir from the onshore. This is significantly cheaper than traditional offshore drilling and also heavily reduces the associated environmental risks. To facilitate this, the Company has additionally applied for a nearby onshore permit which is moving forward in the application process (revised on the 12th December by the Ministry's Committee for Hydrocarbon and Mining Resources) and should be awarded in 2013. At that point the Company will combine the two permits and formally apply to drill the long reach well from the onshore position. To accelerate first gas the long reach well will be directly converted to a production well.
Santa Maria Goretti Licence (Marche, Italy, 100%, Sound Operated)
The Marche Region has issued on 12th December a confirmation that award of this licence will be exempt an EIA approval. As a result of this simplified process, the Company expects to be awarded the Permit during the first quarter of 2013.
Rapagnano Field (Marche, Italy, 100%, Sound Operated)
Operations at the Rapagnano site have commenced.
Following the concession award on the 28th November, UNMIG issued the detailed concession documentation with a minor error, which has now been rectified. Whilst this had no impact on the concession award or the operations, it did introduce a few additional days into the process of obtaining site access.
The Company expects to complete the re-entry of the Rapagnano well and the test of well deliverability by the 7th of January and the Company is still targeting first gas in mid January.
James Parsons, Sound Oil's Chief Executive Officer, commented:
"Sound Oil is now a well funded Italian focused company with a high upside portfolio of assets and an active drill programme. We are building a strong track record of delivering on our promises, with operations having commenced on Rapagnano, which should provide first revenue shortly.
Santa Maria Goretti is one of the hidden gems in our portfolio and we are pleased that the Ministry has agreed to an accelerated award of this material exploration permit.
I am also pleased to confirm that our flagship asset, Nervesa, continues on track with the Company choosing to retain the upside for our investors during the appraisal drilling. The first quarter of 2013 promises to be an exciting period in our company's evolution."
For further information please contact:
James Parsons, Chief Executive Officer
Smith & Williamson - Nominated Adviser
Tel: 44 (0)20 7131 4000
Westhouse Securities - Broker
Tel: 44 (0)20 7601 6100
Tel: 44 (0)20 7466 5000
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.