24 April 2013
Sound Oil plc
("Sound Oil" or "the Company")
Badile Project Update
Sound Oil, the Italian focused upstream oil and gas company, is pleased to update investors on its Badile project, located onshore in the Po Valley in Northern Italy.
Badile is an exploration prospect some 45 km south-west from the geologically analogous Malossa gas field (with a cumulative production prior to 1992 of 177 Bscf with associated light condensate). The prospect has independently assessed Low-Best-High prospective resources of 47-175-938 Bscf respectively in Upper Triassic reservoirs.
Following the decision to retain Sound Oil's 100% operated position (and therefore the significant upside of this prospect), the Company has completed the technical work required for the drilling application and Environmental Impact Assessment.
As a result of this technical work the Company has made the following enhancements to the detailed Badile drilling programme:
- Reduction in target depth from 5,300 metres to 4,200 metres targeting only the Upper Triassic "Dolomia Conchodon" reservoir without significantly reducing the likelihood of encountering hydrocarbons.
- Shorter period required for drilling (down from an estimated 164 days to 143 days) resulting in significantly lower costs (from €20 million to €18 million).
- Associated reduction in drilling complexity due to lower expected pressures and temperatures.
- Increased likelihood of gas-condensate occurrence in the target section.
The Company is also pleased to confirm that a dedicated team of highly qualified and experienced professionals has been secured for the Badile project including the appointment of a high profile ex ENI industry professional as Badile Project Director. This Milan based role will commence in September 2013 and will form part of Sound Oil's Executive Team.
James Parsons, Sound Oil's Chief Executive Officer, commented:
"This positive re-framing of the Badile drilling programme is an important step forward for the Company which will lower the technical complexity of the well, shorten its drilling time, lower costs and increase well deliverability in the case of success. In addition, we expect that the revised programme objectives will accelerate the approval of the well by the various permitting authorities without compromising on the economic proposition for shareholders.
The drilling request and EIA will be submitted shortly in anticipation of spud in 2014. The Company will also sign a Letter of Intent on a suitable rig in the near future."
For further information please contact:
James Parsons, Chief Executive Officer
Smith & Williamson - Nominated Adviser
Tel: 44 (0)20 7131 4000
Peel Hunt - Broker
Tel: 44 (0)20 7418 8900
"Low-Best-High" refers to 90%-50%-10% chances respectively of finding a given volume and is consistent with SPE (The Society of Petroleum Engineers) guidelines. The figures quoted here are based on an evaluation of the Badile prospect by ERC-Equipoise prepared for the Company in December 2011. The "Best" estimate of 175 Bscf shown above is broadly consistent with the single case best estimate of 185 Bscf given in the Fugro Robinson CPR of July 2011. Bscf means billion standard cubic feet of gas. 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.