Sound Oil Completes Mitra Acquisition and Placing

Sound Oil, the upstream oil and gas company, has completed the acquisition of Mitra, an unquoted gas exploration and development company with interests in Indonesia, in a reverse takeover. Sound Oil has acquired Mitra in consideration of an issue of 223,376,623 new ordinary shares.

Mitra holds a 34-percent interest in the Bangkanai Block onshore central Kalimantan and a 20-percent interest in the Citarum Block onshore central Java.

Sound has raised GBP11.7 million before expenses at an issue price of 7.25p per share in the placing of new ordinary shares. The company’s cash resources, as increased to more than GBP20 million by the net proceeds of the placing, will be used principally for the development of Mitra's gas interests in Indonesia. Sound’s shareholders approved the transaction at an extraordinary general meeting held on Wednesday.

“This is a very good deal for Sound,” said Gerry Orbell, Sound’s chairman and CEO. “Within a few months we will have started drilling the first of four high-impact exploration wells on our licenses in Java and Kalimantan. In addition we shall be developing the Kerendan gas field in Kalimantan, which we expect to give us a 20-year cash flow starting 2008.”

Sound Oil also announced that its ordinary shares were re-admitted to AIM on Thursday. Following the acquisition and the placing, the number of issued ordinary shares in the company is 692,427,348.