Sound Oil said Tuesday it turned down a farm-in agreement for its Badile exploration prospect in northern Italy.
The company received an offer from an undisclosed Italian oil and gas major but decided to retain its wholly-owned operated position at the prospect, saying: "The offer did not reflect the potential of this major asset."
Badile comprises of 185bn cubic standard feet in gas and 23m barrels of oil onshore in the Po Valley, about 30km southeast from the geologically analogous Villafortuna-Trecate field.
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The prospect has an independently assessed success case net present value of $410m gas and $266m oil. The exploration well is forecast to cost about €20m plus contingency.
Chief Executive Officer of Sound Oil, James Parsons, said: "I am pleased to have secured an offer from a credible potential partner, which validates our technical view of the asset.
"We have chosen to retain the upside exposure and also control of project budgets and timelines. We will now prepare for drilling and continued de-risking of the asset whilst remaining open to offers..."
In coming months the company will submit a drilling request and Environmental Impact Assessment to the Italian permitting authorities, targeting a 2014 Badile well.
A technical team will be recruited for the well which will reach a target depth of 5300 metres.
Shares fell 1.72% to 7.12p at 09:29 Tuesday.
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