Italy-focused Sound Oil announced Monday that it has agreed to farm down to Niche Group a 27.5-percent interest in the onshore Carita license in the Po Valley, northern Italy. The Carita license area includes Sound’s Nervesa gas discovery.
In return for its 27.5-percent stake Niche has agreed to pay for 100 percent of the costs of a second well to address the southern part of the structure. This well is expected to be drilled in the second or third quarter of 2014, and is estimated to cost $8.4 million (EUR 6 million).
Sound CEO James Parsons commented in a company statement:
“We are pleased to confirm that we have agreed heads of terms for a 3.6-to-one farm out on Sound Oil’s flagship asset, Nervesa. This fully funds the next well addressing the southern part of the structure, enables us to achieve first gas on Nervesa without significant further capital and preserves the recently announced GBP 14 million [$24 million) funding injection for our world class Badile prospect and material Laura discovery.
“This farm out, together with the introduction of our new cornerstone investor announced last week, positions Sound Oil as a substantively fully funded vehicle. The executive team will now turn its attention to the farm out of Badile.”
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