Sound Energy PLC (LON:SOU) has issued shares in part payment to the rig company drilling its Badile gas well in Italy.
The contractor, a firm called Pergemine, agreed to receive €1mln of its fee in equity. Around €790,000 has now been issued at a price of 82p a share.
The remainder will be awarded if the well is successful with work getting underway next month.
Badile, in Italy’s Piedmont Lombard Basin region, is being drilled as an exploration well.
The plan is to go to a total depth of 4,600m to test the hydrocarbon potential of the Lower Jurassic Conchodon Dolomite.
An independent assessment suggests the target could be host to around 178bn standard cubic feet of gas with a net present value of £400mln.
That figure is what’s called a ‘best case’, unrisked estimate. It sits at in the middle of the range with the ‘high case’ forecast being 670bn cubic feet and the ‘low case’ 46bn cubic feet.
Badile is part of a portfolio of Italian assets on which the original Sound Oil was founded.
It includes smaller producing assets Casa Tiberi and Rapagnano as well as a host of exploration and appraisal opportunities that could help turn the valuation dial.
Sound Energy’s success to date, which has seen the share price rocket, was been based on impressive drill results from Tendrara in Morocco and Badile may provide it with a second leg to the business.