Sound Oil (SOU)

SOUND OIL (SOU)

INTRO
(ALISON IS AT A DESK AT WORK IN AN OFFICE.
HER MOBILE RINGS.
IT’S HER YOUNG SON.)

ALISON:
Oh hello darling, shouldn’t you be at nursery today?
Didn’t daddy take you?
(PAUSE – EDIT ON INCOHERENT CHILD’S VOICE –
ALISON DOESN’T TAKE WHAT HE’S SAYING SERIOUSLY INITIALLY)
I see… you’ve found oil have you darling.
And where was that - in your sandpit?
(PAUSE FOR BIT MORE CHILD’S VOICE –
ALISON SUDDENLY LOOKS SHOCKED BY WHAT SHE HEARS)
What?
Initial seismic exploration suggests 2.5 billion standard cubic feet of hydrocarbons with $14 per 1000 cubic feet yield???
(PAUSE – BIT MORE CHILD’S VOICE)
Bloody hell!
Right, get mummy a spade darling….
I’m coming home…
(SHE SLAMS PHONE DOWN )

MAIN
We all know the business model: a small group of oily chums clubs together, pays people to find untapped riches, raises cash and starts digging.
Gerry Orbell was skiiing when he got a call from hedge funder RAB Capital suggesting an AIM-quoted ‘cash box’ targeting West Africa.
Founded in 2005 with Orbell at the helm as chairman and chief exec, a plumper Sound was re-admitted to AIM a year later and, with its new acquisition, Mitra Energia, focus switched to Indonesia.
A bumpy start forced a write-down on its Bangkanai well but, with a new operator, three new wells are expected to be drilled this year and, despite the meagre 5% stake, Orbell says there could be around 3 trillion cubic feet of gas.
Gas is also expected from its long-stalled Kerendan field but it’s Italy – with low costs and friendly tax rates - that’s causing all the excitement.

Since snapping up Consul Oil & Gas last December, Sound now has exploration permits galore and a savvy business model of mopping up small Italian oil and gas projects that lie abandoned.
In June, Sound acquired an interest in the Montemarciano gas permit in the rolling countryside of Ancona and soon after, confirmed that its Marciano-1ST well - where the noses of its subsidiary, Apennine Energy, first smelt gas in 2007 – was on target.
The potential 2.5 bilion cubic feet of gas could, to quote the company statement, be a “significant upside to our overall asset base.” [‘KER-CHING’ CASH TILL SOUND FX]
The downsides?
Well our aforementioned hedge funder, RAB Capital is now battling to survive and the forced sale of its Sound shares has caused much investor unease.
But Italy remains a sound bet – the bunga bunga activities of its Prime Minister will be nothing – shareholders hope – compared to the wonga wonga potential of Sound Oil…

STATS
Sound Oil’s shares currently trade at around 3.60p a share.
They hit a 52-week low of 1.00p in June 2010 and a 52-week high of 6.82p on this March.