Sound Oil Announces Gas Flow at Rapagnano

Sound Oil, the British-based gas and oil company focused on Italy, has announced that first gas was delivered from the onshore Rapagnano field to the local gas distributor on May 15 (Wednesday). 

Under its gas sales agreement with Steca Energia, gas is priced initially at €0.316 per Scm, varying quarterly. The estimated average 2013 price is 32 cent per Scm. On this basis, gas deliveries are expected to yield an annual cash flow to the company of circa €400,000 after operating costs.

The company said it plans to produce a further 1.3 billion cubic standard feet (Bscf) of gas over a 13-year period.

James Parsons, Sound Oil's chief executive officer, said: "We are pleased to have achieved the strategic milestones of first gas and first revenue. Rapagnano is one of our smaller assets however it establishes the company as a gas producer and builds a foundation for further growth. We will now focus on our flagship Nervesa discovery, which we will be drilling shortly and has an independently assessed base case value of circa US$60 million."