Sound Oil: first gas delivery from Rapagnano field completed

Sound Oil, the Italian focused upstream oil and gas company, has reported that first gas was delivered from the onshore Rapagnano field to the local gas distributor on May 15th 2013.

The initial production rate was 0.50m standard cubic feet per day (MMscfd).

Under the gas sales agreement with Steca Energia srl, gas is priced initially at $11.2 per million standard cubic feet, varying quarterly based on a basket of commodity prices.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

On this basis, the company said that gas deliveries were expected to yield an annual cash flow to the company of approximately €400,000 after operating costs.

James Parsons, Sound Oil's Chief Executive Officer, commented: "We are pleased to have achieved the strategic milestones of first gas and first revenue. Rapagnano is one of our smaller assets however it establishes the company as a gas producer and builds a foundation for further growth."

"We will now focus on our flagship Nervesa discovery, which we will be drilling shortly and has an independently assessed base case value of circa $60m."

Sound Oil's share price was up 1.67% to 7.62p at 13:21 on Thursday.

MF