17th Sep 2014 11:34
LONDON (Alliance News) - Sound Oil PLC Wednesday said production from its Rapagnano project and first gas from Casa Tiberi will cover its Italian cost base, while saying it expects two further projects to be in production in 2015.
The European and Mediterranean-focused upstream oil and gas company reported revenue of GBP490,000 in the six months ended June 30, up from GBP106,000 in the first half of 2013.
The company's loss widened to GBP2.0 million in the first half from GBP1.0 million in the comparable period in 2013, following increases in operating, administrative, exploration and development costs.
The company currently has two producing projects in Italy, Rapagnano and Casa Tiberi, which began producing in July, with its Nervesa and Santa Maria Goretti projects, also in Italy, expected to start production in 2015.
"Following first gas from Casa Tiberi, gas sales now cover our Italian cost base whilst also demonstrating our capacity to bring assets from exploration through development and into production," said Chairman Simon Davies.
The company expects Nervesa to become the next addition to the producing portfolio, with first gas at the material onshore gas discovery expected during 2015, added Davies.
"Progress in relation to our portfolio of low-risk existing discoveries is also gaining momentum, with the recent award of the permit containing the 30 billion square cubic feet Laura discovery and...the onshore Santa Maria Goretti permit confirming a 32.8 billion square cubic feet opportunity. These two assets have a combined net present value (NPV10) exceeding EUR100 million," said Davies.
The company reported cash at the end of June 30 of GBP677,000. The GBP14 million institutional investment from Continental Investment Partners SA announced in June "now positions the company with the funds required to fulfil its immediate drilling priorities", said Sound.
Sound Oil's shares were up 3.1% to 12.50 pence per share Wednesday midday.
By Joshua Warner; [email protected]; @JoshAlliance
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