28 April 2014
Sound Oil plc
("Sound Oil" or the "Company")
Nervesa Farm Out
Sound Oil, the Mediterranean focused upstream oil and gas company, is pleased to announce that it has signed non-binding heads of terms with Niche Group plc ("Niche") for a farm down of the Company's onshore Carita licence in the Po Valley, Northern Italy (the "Heads of Terms"). The Carita licence area includes the Nervesa discovery.
Under the Heads of Terms, Niche will acquire, subject to completion of due diligence, a 27.5% interest in the Carita licence in exchange for paying 100% of the costs of a second well to address the southern part of the structure, planned for Q2/Q3 2014. Following the farm out, the Company will continue to hold a 72.5% interest in the Carita licence. The second well, to be funded by Niche, is estimated to cost Euro 6 million, including testing, completion and applicable taxes. The Heads of Terms include a binding and mutual break fee and a binding agreement is expected to be entered into during Q2 2014. The Company looks forward to updating shareholders in due course.
James Parsons, Chief Executive Officer of Sound Oil, commented:
'We are pleased to confirm that we have agreed Heads of Terms for a 3.6 to 1 farm out on Sound Oil's flagship asset, Nervesa. This fully funds the next well addressing the southern part of the structure, enables us to achieve first gas on Nervesa without significant further capital and preserves the recently announced £14 million funding injection for our world class Badile prospect and material Laura discovery.
This farm out, together with the introduction of our new cornerstone investor announced last week, positions Sound Oil as a substantively fully funded vehicle. The Executive team will now turn its attention to the farm out of Badile."
For further information please contact:
Sound Oil James Parsons, Chief Executive Officer Stuart Joyner, Chief Financial Officer |
[email protected] [email protected] |
Smith & Williamson - Nominated Adviser Azhic Basirov David Jones Ben Jeynes |
Tel: +44 (0)20 7131 4000 |
Peel Hunt - Broker Richard Crichton Charles Batten |
Tel: +44 (0)20 7418 8900 |
