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Italy-focused oil and gas firm Sound Oil announced Friday that it has signed a gas sales agreement (GSA) with Stecia Energy, ahead of it producing its first gas from its onshore Rapagnano field in northern Italy. In a separate announcement Friday the company said it had received approval from the Italian Ministry of Economic Development to begin operations at Rapagnano.
Sound is targeting an estimated 1.3 billion standard cubic feet of gas from Rapagnano over a 13-year life. The GSA will see the company directly connect the well to the local low-pressure grid that is operated by Steca, a local gas distributor.
Initially, Sound will receive around $11.20 per million cubic feet of the gas it produces.
Sound CEO James Parsons commented in a company statement:
"The company continues on track to achieve the strategic milestone of first gas, having now secured the gas sales contract. This initial revenue stream will enable Sound Oil to cover a large portion of its overhead costs in Italy."
The Rapagnano gas field is located in the Fermo Province, Italy. It was discovered in 1952 and produced foru bilion cubic feet of gas from the Pliocene interval until 2001, when the well was shut down. Sound now intends to re-complete the lower reservoir, which has produced gas with minimal water for more than 40 years.
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