Sound Oil to Acquire Celtique Energy

Sound Oil has announced the acquisition of Celtique Energie, a private Italian company that owns 50% working interests in three permits in Italy: Torrente Alvo (Strombone oil discovery), Carita (Nervesa gas discovery) and Monte Negro (gas exploration).

Sound Oil previously held a 50% interest in each of these permits, which now increases to 100% as a result of the acquisition.

A Competent Persons Report undertaken by Fugro Robertson provided a best estimate of contingent oil resources (2C) at Strombone of 6.4 MMbo, and of contingent gas resources (2C) at Nervesa of 20.7 Bscf.

Commenting on the above Gerry Orbell, Sound Oil's Chairman and CEO said:

"This acquisition marks a very important step for the Company, as reinforced by the updated Competent Persons Report. We now own 100% of both Nervesa and Strombone which together are estimated to be worth over US$190 million (NPV10 success case). As sole owner and Operator, Sound is now able to control the pace of activity and it remains our intention to drill Nervesa in 2012."

In addition the Sound has signed Heads of Terms with Astin Capital Management on behalf of investment funds managed by Astin to fund a minimum of £4 million new equity. Sound intends to use the funds raised for drilling operations, including the Nervesa discovery.