The deal is, however, structured as a share-based transaction that’s more akin to a ‘spin-out’ rather than a cash boosting exchange.
Sound is selling the assets to Saffron Energy plc (LON:SRON), which is at the same time combining with its major shareholder (with 53%) ASX-listed Po Valley Energy Limited (ASX:PVE), and it will reboot as a new vehicle called Coro Energy.
James Parsons, Sound chief executive, will become chairman of the new company.
Coro will comprise the Italian assets of Sound, Saffron and Po Valley (which is also a 53.8% shareholder in Saffron), and the consideration shares issued to Sound would ultimately account for 33.3% of the enlarged company.
Sound said it plans to redistribute the Coro shares back to its shareholders.
Parsons, in a statement, said: “This transaction will provide an elegant exit from our Italian activities thereby delivering strategic focus for our province opening activities in Morocco and enabling Sound Energy shareholders the opportunity to continue their participation in an early stage consolidated but growth focused Italian E&P company."
Sound earlier this week unveiled plans for new drilling in Morocco which has become its primary area of focus.
Saffron Energy floated in London back in February with a view to growing its Italian oil and gas business, and