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Sound Energy inks rig contract for dial-moving Italy well

The equipment, owned by a company called Pergemine, is already in the country. It will be mobilised in January, allowing work to begin in the first quarter.

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Work is soon to begin in Italy.

Sound Energy PLC (LON:SOU) said Tuesday it had signed a contract securing the drill rig for its next big exploration well – Badile in northern Italy.

The equipment, owned by a company called Pergemine, is already in the country. It will be mobilised in January, allowing work to begin in the first quarter.

Sound will pay for 23% of the service charges via the issue of shares worth around €1mln.

If it successfully finds the accumulations of gas predicted then the discovery could be huge as it carries a net present value of €486mln – the equivalent of the company’s current market capitalisation.

Badile, in the Piedmont Lombard Basin, is part of a portfolio of Italian assets on which the original Sound Oil was founded.

It includes smaller producing assets Casa Tiberi and Rapagnano as well as a host of exploration and appraisal opportunities that could help turn the valuation dial.

Sound also has some significant backing that suggests its assets have potential.

Recently it expanded its collaboration with oil service giant Schlumberger from Morocco to Italy with the latter helping fund the aforementioned Badile work after agreeing to provide around £7mln of drilling services.

Success to date has been found on Morocco and the Tendrara licence where two wells have found significant accumulations of gas.

In the year to date the stock is up 332% on the back of its efforts in North Africa.

Quick facts: Sound Energy PLC

Price: 1.498 GBX

AIM:SOU
Market: AIM
Market Cap: £17.4 m
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