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UPDATE - Sound Energy goes all into Morocco with new Sidi Moktar deal

Sound Energy to take 75% and become Sidi Moktar operator

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Two wells have already been drilled at Kechoula

-- adds broker line, share price --

Sound Energy (LON:SOU)  has agreed terms to take a 75% stake in the Sidi Moktar onshore licences in Morocco.

The company has now agreed to buy the 50% operated interest owned by PetroMaroc after it acquired a 25% stake from Maghreb Petroleum earlier this month.

Sidi Moktar is a huge 2,700 sg lm prospect in the Essaouira basin, central Morocco and contains a material existing gas discovery in the Lower Liassic formation called Kechoula.

Two wells have already been drilled at Kechoula and a near term extended well test is awaited prior to expected commercial production. 

Kechoula has an estimated unrisked 293 Bscf of gas with an further 1 Trn cf potentially.

On completion, PetroMaroc will be issued with shares in Sound worth £3. 65mln. PetroMaroc will also retain a 10% net profit interest in any future cash flows from the Kechoula discovery and a 5% net profit interest in any future cash flows from other discoveries at Sidi Moktar.

Sound added it is still talking to potential farm-in partners.

James Parsons, Sound’s chief executive, said the deal will mean Sound Energy holding an aggregate 75% interest in, and operatorship of, an already successfully drilled material gas discovery with potential near term production and significant deeper exploration potential.

“Operator status at Sidi Moktar unlocks this asset whilst also granting Sound control over the pace and scale of operations.    

Sound Energy can now proceed to dovetail operations at Sidi Moktar with those planned at Tendrara - with the potential for material production from Sidi Moktar during 2016."

Broker Cantor Fitzgerald said the heads of terms remove the potential for delays caused by PetroMaroc, allowing Sound to progress with a campaign that could result in first gas during 2016.

Buy with a target price of 31p. Shares rose 2% to 16.7p.

 

 

Quick facts: Sound Energy PLC

Price: 1.44 GBX

AIM:SOU
Market: AIM
Market Cap: £16.73 m
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