Sound Energy PLC (LON:SOU) said drilling at its Badile onshore well near Milan, Italy, has uncovered “significant gas shows”.
However it also ‘sounded’ a cautionary note, telling investors the early results shouldn’t be considered conclusive. Drilling and logging must to be completed to establish the full picture.
Gas was encountered at a measured depth of 4,375 metres within the main reservoir target. Chromatograph data indicated it was composed of methane and pentane.
Drilling has been paused to allow workers run in a liner after which Sound will continue to the bottom of the reservoir.
To date the company has scored significant success at Tendrara, in Morocco, where it has discovered significant accumulations of potentially commercial gas.
However, Sound’s Italian assets were the foundation stone on which the company was built and it has two producing wells – although their output is modest.
Badile could be a game-changer for this portion of the portfolio. 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.