Sound Oil (LON:SOU) completed the acquisition of the remaining 2 per cent of Consul Oil & Gas limited.
To complete the deal it has issued 5.55 million new Sound Oil shares to the vendors, as well as making a US$46,667 cash payment.
The acquisition of a 96 per cent stake in Consul, completed in January this year, added a whole new side to the business. Consul owns varying interests in seventeen licences in Italy. In combination with the group’s Indonesian assets it provides a new level of diversity to Sound Oil's project portfolio.
After today’s transaction Consul is a wholly-owned subsidiary of Sound Oil.
Earlier today Sound Oil confirmed that it has begun the preparations for the Casa Tiberi-1 farm-in exploration well on its 75 per cent owned Montemarciano permit in Central Italy.
The company agreed the farm-in deal for Montemarciano in June and today it confirmed that civil engineering works are now underway on the Casa Tiberi-1 well site. Spudding is expected in around 90 days.
"Casa Tiberi-1 is the first well that we shall be drilling as operator,” said chief executive and chairman Gerry Orbell. “The competent person estimated the risk of finding hydrocarbons to be 35 per cent which is relatively low for an exploration well.
“If successful, the most likely worth to Sound is approximately US$12 million based on the present evidence but I am hoping for the upside which could be worth US$37 million."
Under the terms of the Montemarciano farm-in Sound Oil paid €215,000 and it committed to funding the full cost of Casa Tiberi-1. Drilling Casa Tiberi-1 is expected to cost US$1.5 million.
A competent person’s report (CPR) has estimated the prospect’s base case prospective resources at 5.7 billion cubic feet (Bcf) with high case prospective resources of 14.9 Bcf with a 35 percent chance of success.
Casa Tiberi-1 is just one of eight wells that Sound Oil has planned in onshore in Italy and Indonesia over the next year.