Sound Energy (LON:SOU) has knocked €0.5mln off the cost of drilling its Badile prospect in Italy.
Sound has signed an MOU with Pergemina for the 3000 HP EMSCO C3 No.29 rig, which is already in the country.
A further €1mln (23%) of the service charges will also be satisfied through new shares.
The rig will be available within 4 months of signature of the contract, which is now under discussion.
A hurdle remains a drilling permit, but Sound still expects to drill the well in 2016.
James Parsons, Sound's chief executive said: "Badile remains the largest and most strategic asset in our portfolio with an independently assessed unrisked best case estimate of 178 Bscf equivalent.
“Securing the rig and locking in significant additional cost reductions are important steps prior to farming out the asset."