Sound Oil has been awarded a new exploration license in Italy, bringing the total number of its active permits in the country to 8. In addition, the Company holds 1 concession, 7 preliminary awards and one exclusive application. Of this total Sound operates 14 of the projects.
The new award was announced by the Ministry for Economic Development in Rome and made jointly to Sound's subsidiary Apennine Energy Srl (50%) and its partner Compania Generali Idrocarburi (50%, operator). The permit is awarded for a five year period with an effective start date of December 16, 2010. There is no immediate capital expenditure planned on the license.
The Colle Ginestre license is located in Campobasso (Molise) and Chieti (Abruzzo) on the Adriatic coast of central Italy. The new permit lies in the Southern Apennines fairway for shallower gas and deeper oil and adjacent to the Cupello-San Salvo field which has produced over 330 Bscf from the Pliocene play. A number of wells have been drilled on the permit previously, including Colle Turchese-1dir (by ENI in 1988) which encountered gas shows on the flank of a structure characterized by an encouraging flat spot on seismic data, which may indicate a gas accumulation.
Separately, the Company has noted the recent rise in its share price and knows of no particular reason for this. The Company is on track with its planned work program in Italy announced in December 2010 and to this end the Company has selected a preferred bidder from the tender process and is currently negotiating a rig contract for a work-over well on the Company's Marciano concession in Italy. Application will be made to the ministry for the work permit and a further announcement will be made in due course.
Gerry Orbell, Chairman and Chief Executive of Sound Oil plc, commented, "Sound Oil is very pleased to have been awarded the new license onshore Italy, one of our core areas in which we have built an extensive portfolio, experience and knowledge. The new license contains some attractive new prospects and leads in close proximity to existing discoveries in a very prolific gas province.
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