Sound Oil, the Italian focused upstream oil and gas company is pleased to confirm its strong funding position as it approaches the Nervesa appraisal well.
The Company confirms that the fifth and sixth tranches of the share placement announced on 16 July 2012 have been closed, generating a total of £1.9 million (at an average VWAP for both periods of 9.45 pence per share, adjusted to post consolidation levels). The seventh and final pricing period will expire on 11th February.
The Company's current cash balance, following receipt of the sixth tranche payment, is US$12.4 million, with no debt. The Company expects to commence the appraisal drilling targeting the Nervesa discovery with a cash balance between US$ 14 million to US$ 15 million.
The estimated total remaining expenditure for the Company on the Nervesa appraisal well (with an independently assessed NPV of around US$60 million) is some US$1.8 million.
James Parsons, Sound Oil's Chief Executive Officer commented:
"The Company is approaching both the initiation of operations on the Nervesa appraisal well and the achievement of first commercial gas on Rapagnano (following the successful well test last week). It is expected that after both operations are complete the Company will be positioned with circa US$12 million cash in the bank, a thirteen year revenue stream from Rapagnano and a large scale and de-risked discovery (Nervesa), with alternatives on the table for its development into a significant producing asset or partial sale.
Sound Oil now has one of the strongest balance sheets in the small cap oil & gas sector and we are continuing to evaluate various alternatives which would enable the Company to complete the entire 2013 drill programme without equity dilution."
Source: Sound Oil
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