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Sound Oil reveals re-shaped drill plans

"This strategic revision to the drill programme is a positive step and focuses our financial and human resources on game-changing drills whilst also capturing rig cost synergies,” said chief executive James Parsons.

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Sound Oil (LON:SOU) today unveiled plans to re-shape its upcoming drill programme in Italy.

This comes after the company decided to go it alone with the Badile project, and it says the changes will increase ‘upside exposure’ for investors, as well as balancing risk and reward.

The plan now is to drill a second well on the Nervesa discovery at the end of this year, subject to the imminent Nervesa appraisal well being a success. Consequently, this will mean that the proposed drilling on the Strombone appraisal project will be put back.

This will free up US$9mln and allow the company to accelerate production and cash flows from Nervesa, which will become the group’s flagship asset.

Sound Oil confirmed a place in next year’s programme for the potentially high impact Badile well, which targets 23mln barrels of oil. And it also revealed plans to drill the Zibido prospect (16mln barrels) next year too.

The Laura appraisal project also remains on the schedule for next year and Sound Oil said it expects to receive permits for this project in the first half of this year.

"This strategic revision to the drill programme is a positive step and focuses our financial and human resources on game-changing drills whilst also capturing rig cost synergies,” said chief executive James Parsons.

“During the next twenty-four months it is our intention to drill two material exploration prospects, Badile and Zibido, each with the potential to significantly accelerate our growth.  

“The company will also develop the Laura discovery which has the potential to provide early material cash flows to the company.

Sound Oil continues with the intention to drill two material wells every year however the speed and scale of change will now be much greater."

The company also said today that it will exclusively hire a drill rig for eighteen months, starting early next year, to ensure rig availability and costs efficiencies.

It also added that there is still an opportunity to develop the Casa Tiberi field later this year, and the production concession for the project is expected in the second quarter.

Quick facts: Sound Energy PLC

Price: 1.954 GBX

AIM:SOU
Market: AIM
Market Cap: £22.72 m
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