Sound Oil, the European / Mediterranean focused upstream oil and gas company, achieved a significant upgrade in the recoverable volume of the Santa Maria Goretti ("SMG") gas prospect, onshore Italy.
The onshore SMG Permit sits in the Marche Region in Central Eastern Italy, covers an area of 101km2 and is owned 100% by Sound Oil. The SMG Permit area contains the southern extension of two significant producing gas fields, from 4 wells, which are owned by ENI and Edison in the adjacent permit and have been producing for over 30 years. The main reservoirs for the SMG area are the Thin Beds and Level-1, both belonging to the Lower Pliocene Cellino formation.
CGG Robertson have completed a full independent Competent Person's Report ("CPR") of this asset. The CPR confirms the Company's plans to drill one exploration well and one contingent development well addressing primarily the shallow Thin Beds, with the deeper Level-1 as a secondary objective.
The CPR has estimated Gas Initially In Place ("GIIP") as 66.4Bscf and recoverable Best Estimate Prospective Resources as 32.8Bscf. The study has also estimated a 68% geological chance of success for the Thin Beds objective.
Based on a 2014 gas price of Euro 32 cents/cbm, the unrisked Best Estimate NPV10 is estimated to be Euro 52.4 million (with Euro 43.5 million at Euro 28 cents/cbm and Euro 34.6 million at Euro 24 cents/cbm).
James Parsons, Sound Oil's Chief Executive Officer, commented, "This CPR uplifts the Company's previous resource estimate by 82% and confirms the addition of a further low risk, yet hugely material, asset into Sound Oil's Italian onshore gas portfolio. The top hole location has already been identified and an application to drill will be submitted to the permitting authorities shortly, with a view to drilling during 2015."