Italy Focus for Sound after Indonesia Exit
by Jon Mainwaring
|Wednesday, December 12, 2012
Sound Oil's exit from Indonesia should be viewed as positive since it will allow management to dedicate time and resources to its Italian operations, according to analysts who follow the firm.
Sound announced Wednesday that it had agreed to sell its Indonesian subsidiary Mitra Energia Bangkanai to Salamander Energy – the operator of the Bankanai Production Sharing Contract in which Mitra held a five percent stake. The company will receive up to $7.1 million from Salamander in return for Mitra.
In a research note responding to the news analysts at London-based investment bank Westhouse Securities commented that the deal "marks a complete exit of Sound Oil from Indonesia and allows the company to fully focus itself on its Italian operations where first gas from the Rapagnano field is expected imminently".
Westhouse added that the strengthening of Sound's balance sheet from the Mitra deal also gives the firm the financial flexibility to address the appraisal drilling of its Nervesa and Strombone assets in Italy.
Sound also announced on Wednesday that Ilham Habibie, a non-executive director, has left the board of the company following its exit from Indonesia.
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