Sound Oil Updates on Badile exploration well
Sound Oil, the European / Mediterranean focused upstream oil and gas company, is pleased to update investors on its preparations for the forthcoming Badile exploration well.
The Company has agreed terms to purchase a 59,140 square metre plot of industrial land in the Lombardy region of Italy for a total consideration of Euro 1.8 million (excluding VAT). The site will host the drill site for the initial Badile exploration well and for all other production wells required to exploit the discovery. The Company will sign, notarise and complete this land purchase in September 2014 and is in discussions with various banks with a view to securing a mortgage on the property.
The Company has also now ordered a specially designed flanged wellhead (15,000psi with a stainless steel 3G production section) from Breda Energia SpA at a cost of Euro 380,000 (excluding VAT).
Delivery of the wellhead is expected in January 2015.
The remaining long lead items, including advanced technology casing and tubing, will be purchased under a framework agreement with Tenaris Dalmine, which is close to finalisation.
James Parsons, Sound Oil's Chief Executive Officer, commented: "The Company is well advanced with the procurement phase for Badile, and will shortly strategically position itself as landlord of the drill site. Badile remains the largest and most strategic asset in Sound Oil's portfolio with an independently assessed mid case estimate of 178 Bscf equivalent, a Best estimate NPV10 of approximately US$650 million and a High Case NPV10 of more than US$2 billion. We expect to commence drilling of this potentially game changing well within the next six months."
