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Sound Energy well data prompts upgrade to estimates

Chief executive James Parsons said he was delighted with results from the company's third well on Tendrara

TE-8.png
The TE-8 well in Morocco during the construction phase

Sound Energy PLC (LON:SOU ) has upgraded to internal estimates for its Tendrara acreage in Morocco.

Sound increased its gas initially in place (GIIP) figure to just over 1 trillion standard cubic feet (TCF) from 800bn initially.

The number refers only to that part of Tendrara covered by a 3D seismic survey and was published following the completion and testing of TE-8, the latest well on the property.  

TE-8 was drilled 359 metres into the Paleozoic horizon and identified the “full series” of productive sandstones seen in the wells in neighbouring Algeria.

Crucially, the sandstones lie in a separate pressure regime to the overlying TAGI play in a large tilted fault block beneath the horst and the Lakbir High horizons targeted by the earlier TE-5 well.

WATCH: Jamie Ashcroft talks Sidi Moktar 

READ: The announcement in full 

Gas shows were encountered and petrophysical analysis suggests the sandstones may be permeable and likely to be producible with mechanical stimulation, Sound told investors.

“Further wells targeting the Paleozoic on the Tendrara permit are being planned, but are not likely to be drilled prior to the completion of reprocessing of existing 3D seismic, which is currently underway,” it added.

The company’s chief executive, James Parsons, said he was delighted with the results from TE-8, the firm’s third well.

He said they confirmed a “definitive Paleozoic play opener with thick Westphalian sands which should be producible across the region”.

Material increase 

“Despite a relatively tight TAGI reservoir, the confirmation of the gas-water contact at 1,350 metres has enabled the company to double its internal TAGI estimates and materially increase first phase development volumes,” he said.

“We eagerly look forward to commencing the 2D exploration seismic programme in August and continuing operations in Eastern Morocco.”

The company’s other asset in the country is Sidi Moktar, where the Sound is preparing to re-enter two formerly producing wells.

Koba-1 and Kamar-1 will be subject to a two-phase workover that will test respectively the Argovian and Dogger formations.

Sidi Moktar is estimated to be host to 293bn standard cubic feet of gas on the Kechoula portion of the licence.

Sidi Moktar

However, a quantitative assessment carried out by the previous operator put the exploration potential of the asset at a world-class 9 trillion cubic feet of gas.

The TAGI and Paleozoic reservoirs – found at Tendrara – hold the key to the scale of Sidi Moktar.

The company also has a portfolio of assets in Italy where drilling of the Badile well, near Milan, is close to conclusion.

In a separate announcement, Sound said Brian Mitchener, currently vice-president of exploration, would be appointed to the board as exploration director.

At 11am, the shares were up 2p at 72p valuing Sound at £523mln.

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Quick facts: Sound Energy PLC

Price: 3.1 GBX

AIM:SOU
Market: AIM
Market Cap: £33.47 m
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