16th Jun 2015 07:19
LONDON (Alliance News) - Shares in Sound Oil PLC were down 20% early Tuesday as it opted to abandon its second appraisal well at its onshore Nervesa discovery in Northern Italy after it found gas but was unable to secure a stabilised flow rate.
Sound Oil said it has concluded that the lower section of the target reservoir is "insufficiently permeable" to flow gas.
It plans to retain top-hole facilities at the site in anticipation of a future sidetrack, subject to permitting, and will now instead focus on achieving gas at the first Nervesa well and preparing for the first well at its newly acquired interest in Morocco.
"We are rapidly approaching commercial production at the first Nervesa well, the drilling of the first appraisal well in Morocco and the permitting and farm out of the Badile exploration well. I therefore see this well result as a frustrating but relatively minor set-back," said Chief Executive Officer James Parsons in a statement.
Seperatly the company said its environmental impact assessment for a permit covering its Dora and Dalla assets in Italy has been approved. Following the approval of the environment impact assessment, Sound Oil expects to be awarded a D503-BR-CS permit covering the Dora and Dalla assets.
"We look forward to the permit award which will add another high value existing gas discovery to our portfolio. The Dora discovery sits adjacent to significant ENI infrastructure and, similar to the Company's other discoveries, will benefit from very strong Italian gas prices," Parsons said in a statement.
Sound Oil shares were down 20% at 12.90 pence early Tuesday.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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