Mediterranean-focused junior explorer Sound Oil announced Monday that it will soon operate in Morocco after signing an agreement to farm into the country's onshore Tendrara license. The firm also announced progress with drilling on its Nervesa discovery in northern Italy.
Sound said that Tendrara, which covers eight blocks across a total of 5,400 square miles, contains a large-scale onshore gas discovery with "very significant upside". Seven wells drilled to date on the license have already proved a hydrocarbon system there.
On completion of the Tendrara deal with the Moroccan Oil and Gas Investment Fund, Sound will hold a 55-percent net working interest and operatorship of the license.
In a statement, Sound CEO James Parsons commented:
"This transaction is our first transformational deal in pursuit of our Mediterranean gas strategy.
"The Tendrara asset, with two existing discoveries and resource potential of multiple trillion cubic feet, has a very attractive risk/reward profile, builds on our core technical and commercial strengths and dovetails well with our Italian portfolio.
At its Nervesa discovery in northern Italy, Sound said it has successfully perforated and completed seven intervals of the lower section of the Upper Miocene San Dona Formation – where it had previously reported gas shows.
Sound said that initial gas flows show that several of these perforated intervals (between 6,330 feet and 6,523 feet) are gas bearing but of relatively low permeability. Clean-up operations are underway and are expected to continue for a few days. After the clean up, the company will decide whether to initiate a well test directly or to utilize stimulation techniques beforehand.
Sound also announced Monday that its open offer to issue more shares to eligible shareholders, first announced on May 21, has received a strong response and that it plans to extend the open offer.
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