13th Oct 2014 09:10
LONDON (Alliance News) - Sound Oil PLC Monday said it has sealed two 12 month contracts for the sale of gas from two of its sites in Italy with Steca Energia Srl, and it has finalised the land acquisition which will host its Badile exploration well.
Both sales contracts will run until September 2015 and do not include a "take or pay" component, with prices varying according to the market price, said Sound. A take-or-pay provision means the buyer must pay for specified quantities of energy, even if it is unwilling or unable to take them.
The first gas sales agreement is for its Rapagnano gas field and is set is to deliver an average price of USD9.8 per thousand cubic feet. The second agreement is from its Casa Tiberi gas field, and is subject to the same terms but will deliver a fixed price of USD9.9 per thousand cubic feet, said the company in a statement.
The company has also finalised its deal for a 59,140 square metre plot of industrial land in the Lombardy region of Italy for a total consideration of EUR1.8 million, excluding VAT. The land will host the drill site for the initial Badile exploration well and for all other production wells required to exploit the discovery, said the company in a statement.
The firm has ordered a specially-designed flanged wellhead from Breda Energia SpA for EUR380,000 for the exploration well, which it expects to be delivered in January 2015.
Sound shares were down 0.2% to 11.60 pence per share Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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