Sunday, 19 May 2013

Sound Oil & Gas Exploration

Sound Oil plc

Sound Oil Q&A coming via the
(Register free for quick and acute analysis)

Sound Oil recently announced its first gas milestone at the Rapagnano field the ex-ENI asset scooped up and put into production to secure The gas was delivered to the local gas distributor, starting on Wednesday May 15.

It said that the gas was produced at a rate of 14,600 cubic metres (or 0.5mln cubic feet) per day.
Under a gas sales agreement Sound receives €0.316 per cubic metre (which is US$11.2 per thousand cubic feet) for the initial sales to Steca Energia.Sound says it expects the gas operation to deliver annual cash flow, after operating costs, of €400,000.
Rapagnano represents a modest revenue stream into the company which takes Sound oil from explorers to producers with plenty of room for further bonding in its portfolio of exploration. The drilling commencement (Spud) of Carita (Nervesa) a high value and Ex-Agip concession in the North which was last operated 30yrs ago was signed off at $15 a barrel. With the barrel now travelling between $90-$100 consistently for £37m NPV and 21 Billion cubic feet (Bscf) recoverable makes it clear there is significant value attainable, taken from a very low risk position.
The permits/concessions and drilling contracts are all in place and ready to spud anytime. The pads are down and the rig should mobilise this month.
Sound oil have also made a brave and possibly game changing decision to take Badile 100% owned by re-framing its program to retain as much value without becoming to imposing of its shareholders. The value of the this decision will be integral to taking Sound Oil out of the hands of the small cap and into the arms of the mid tier. James Parsons has delivered where some thought he may fall as he brings in its first revenue stream, positioning the company poignantly towards success.
Sound Oil have an indigenous team of ex- ENI personnel working out of Milan navigating the bureaucracy of the ministry whilst liaising with ENI and the contracted parties over the forthcoming drilling campaign which I believe to be paramount in Sounds success in Italy.
Although  of the recently offered up a brief technical review it would appear that fundamentally and technically Sound Oil are turning the corner. This has not come without injury of a share consolidation or without a new and fresh approach in Italy after misadventure in the Indonesian Psc but from a small cap perspective the company have funds to drill with a small revenue stream with its focus on material value in Nervesa and a much bigger entity again in Badile and its 185 Billion cubic feet of gas (Bscf)
Previous thoughts here:


Please follow me here:

No comments:

Post a Comment