Sound Oil Bounces Back on Deal With Institutional Investor

Sound Oil bounced back in the last hours on news that the company agreed a £14mln funding deal bringing on board a new institutional investor. 

Through the Heads of Terms signed with Continental Investment Partners, the company managed to underwrite its growth plans in Italy. According to the data reported at 12 GMT, company’s shares soared 36.67%.  

“It is a substantial injection that underpins a very exciting drill programme and additionally it has been done at a substantial premium to the underlying price,” Stuart Joyner, Sound’s chief financial officer, said as reported by the company’s website.

According to the information released by Sound Oil, the new investor will initially subscribe for 100mln new shares at 8p each, giving it a 23.4% stake in Sound. Continental is also providing a £1.5mln, three-year loan with a 10% coupon and has been granted 14.4mln warrants with an exercise price 10.4 pence. 

"I am very pleased to welcome Continental Investment Partners as our largest shareholder and first cornerstone institutional investor,” Chief executive James Parsons said in the press release, adding that following the investment the company will appoint two non-executive directors representing the investors, one of which will be Marco Fumagalli, Continental’s managing partner.

Sound Oil is an Italian focused small cap oil and gas exploration company, listed on AIM and focused on ‘turning its current portfolio of high upside assets into shareholder value.’ After a really difficult second semester in 2013, the company is giving positive signs to markets. Nonetheless, the volatility of its share remains clear. in the last 52 weeks, share price ranged from a minimum of 4.55 to a maximum of 13.75.