-- adds broker comment, share price--
Sound Energy (LON:SOU) is to collaborate with giant oilfield services group Schlumberger on both its Tendrara licence in Morocco and elsewhere in Europe and Africa.
A memorandum of understanding has been signed by the two companies to work together, with the first project to be Tendrara where Sound is readying to drill its first well having picked up 55% of the licence in June.
Schlumberger is expected to provide integrated technical services linked to production performance once a definite agreement is signed.
James Parsons, Sound Energy's chief executive, said he was extremely pleased with the agreement.
“This relationship is expected to jointly fund and technically de-risk multiple assets across Sound Energy's current portfolio whilst also enabling our ambitious expansion across Europe and Africa."
The Tendrara licence covers eight blocks across a total of 14,500 square kilometres and has the potential to be a significant gas discovery.
Finncap commented it was an interesting step for Sound and could lead to maturation of its portfolio by increasing activity in 2016.
Cantor added the tie-up was a strong endorsement of Sound's assets, management team and regional gas strategy.
“Sound is currently trading in line with our core NAV of 16.1p/share, but at only.56% of our total NAV. We therefore retain our ‘buy’ recommendation and target price of 30p, said the broker.
Shares rose 5% to 16.7p.