28th Apr 2014 07:58
LONDON (Alliance News) - Sound Oil PLC Monday said it has signed non-binding heads of terms with Niche Group, whereby Niche will acquire from Sound a 27.5% interest in a gas-prone permit area in Po Valley, northern Italy.
Mediterranean-focused upstream oil and gas firm Sound Oil said under the terms of the deal investment firm Niche will acquire the stake in its onshore Carita licence in exchange for paying all the costs of a second well to address the southern part of the structure, scheduled for later this year. The second well is expected to cost EUR6 million, including testing, completion and applicable taxes.
AIM-listed Sound Oil will continue to hold a 72.5% stake in the licence following the farm-out.
The heads of terms include a binding and mutual break fee, and a binding agreement is expected to be entered into during the second quarter 2014.
"This [deal] fully funds the next well addressing the southern part of the structure, enables us to achieve first gas on Nervesa without significant further capital and preserves the recently announced GBP14 million funding injection for our world class Badile prospect and material Laura discovery," Sound Oil Chief Executive James Parsons said in a statement
Sound Oil shares were trading at 7.85 pence Monday morning, up 0.78 pence or 11%, making it the fourth biggest gainer on AIM.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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