Sound Energy, the Mediterranean focused upstream oil and gas company, has taken advantage of the lower oil price environment to reduce the estimated cost of the upcoming Badile exploration well in northern Italy by $5.3 million.
Following a “selective re-tendering” of the Badile well program, which aimed to capture cost reductions resulting from the increased availability of rigs and other services due to the current low oil price, the expected cost of the well has been reduced to $26.6 million from $31.9 million. Sound Energy expects to receive final authorization to drill the Badile exploration well at the end of 2015 or early in 2016.
James Parsons, Sound Energy's chief executive officer, commented in a company statement:
"Badile remains the largest and most strategic asset in our portfolio with an independently assessed mid case estimate of 178 billion cubic feet equivalent. The company, with its Mediterranean onshore gas strategy, has remained largely sheltered from current low oil prices and is now also benefiting from reductions to its capital costs as a result of increased availability of equipment and service providers. Securing this significant structural cost reduction is an important step prior to farming out the asset."
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