17 July 2013
Sound Oil plc
("Sound Oil" or the "Company")
Nervesa Gas Discovery
Sound Oil, the European / Mediterranean focused upstream oil and gas company is pleased to confirm a gas discovery following the recent Nervesa appraisal drilling.
The Company confirms that mud log gas shows were recorded while drilling across multiple sandstone intervals in the target reservoir zone within the Miocene San Dona Formation. The Company has now completed logging operations and is pleased to confirm the identification of 476 metres (true vertical depth) of gross pay and 239 metres (true vertical depth) of gross reservoir with 46 metres (true vertical depth) of net gas pay in 13 separate zones.
Planning for completion operations has now commenced with a view to providing the necessary well test data for certification by the Italian Ministry of Economic Development.
A further announcement confirming the estimated quantity of commercial gas and expected cash flows will follow once the Company has fully reviewed the well test results and revised the subsurface model for the field. Following completion of testing, it is the Company's intention to apply for a Production Concession - with a view to achieving first gas sales in 2015.
James Parsons, Sound Oil's Chief Executive Officer, commented:
"In October 2012 we set a strategy of significant growth through the drilling of four material wells in Italy within twenty-four months. Nervesa is the first of those drills and has confirmed a gas discovery. Whilst a comprehensive technical review is now required to confirm the size of the discovery, it appears sufficiently large to deliver important cash flows and provide funding alternatives for the 2014 drill programme.
With this well the Company has also demonstrated to investors, the Italian authorities and the important local Italian communities that it can secure permits in Italy and successfully execute complex drill programmes safely.
At Nervesa we will now focus on the completion and testing of this well, the design and approval of a second well addressing the structure and the securing of the production concession.
Beyond Nervesa we are now able to execute our well prepared second phase of the plan which includes further preparing the Company for success at Laura (30 Bscf, Euro 66 million NPV) and Badile (175 Bscf, Euro 302 million NPV), introducing institutional investors to the register and growth through acquisition."
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
The Company is also pleased to invite investors to two engagements with the Executive Team:
- a conference call focused on reviewing the Nervesa subsurface results on Tuesday 30th July at 1400, and
- an informal engagement, over a beverage, in London on 31st July at 1730
Details can be obtained from Annabelle Griffiths at A.Griffiths@soundoil.co.uk.
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.