Sound Oil plc announces Nervesa Farm out
Sound Oil, the Mediterranean focused upstream oil and gas company, is pleased to announce that it has signed non-binding heads of terms with Niche Group plc (“Niche”) for a farm down of the Company’s onshore Carita licence in the Po Valley, Northern Italy (the “Heads of Terms”). The Carita licence area includes the Nervesa discovery.
Under the Heads of Terms, Niche will acquire, subject to completion of due diligence, a 27.5% interest in the Carita licence in exchange for paying 100% of the costs of a second well to address the southern part of the structure, planned for Q2/Q3 2014. Following the farm out, the Company will continue to hold a 72.5% interest in the Carita licence. The second well, to be funded by Niche, is estimated to cost Euro 6 million, including testing, completion and applicable taxes. The Heads of Terms include a binding and mutual break fee and a binding agreement is expected to be entered into during Q2 2014.
The Company looks forward to updating shareholders in due course.