Awarded Best AIM Company 2016

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Our Strategy

Sound Energy is a well-funded African and European upstream gas company, listed on AIM, with a recent significant discovery in Morocco, a cornerstone investor, a strategic partnership with Schlumberger (one of the largest companies in our sector) and a potentially transformational drill programme.

We are pursuing an onshore gas strategy underpinned by strong European gas fundamentals, which is proving very robust to the current oil price environment and to an increasingly carbon-conscious world (where gas is, rightly, seen as a cleaner alternative to coal and oil).

The energy sector is in a period of some transition, with oil prices having fallen significantly and many household names collapsing on the back of an unsustainable debt burden and an inability to fund capital commitments. We observe a “new order” emerging, with the market increasingly rewarding companies with low debt levels, strong management, cash on the balance sheet and a bias for gas. Despite the challenging sector backdrop, Sound Energy is positioned in a sweet spot analogous to being in the peaceful eye of a violent storm – with an opportunity to grow boldly and counter-cyclically whilst valuations are low and competition is limited. Our current portfolio includes a significant recent gas discovery in Eastern Morocco. In addition, we have a well balanced portfolio of other onshore gas licences with a healthy blend of high upside exploration, low risk appraisal/development assets and some solid, cost-covering production.

Our journey began back in 2011/12 with the acquisition of our onshore Italian gas portfolio. Since then we have broadened the portfolio with the acquisition of our onshore Moroccan gas portfolio, including the Tendrara and Sidi Moktar licences. These licences bring scale and diversification, with Tendrara forming the backbone of our drill programme.

The introduction of a cornerstone investor (Continental Investment Partners) and a strategic partner (Schlumberger, a multi-billion company specialist in oil and gas) has positioned us with a largely funded drill programme and an accelerated journey to a mid-cap status without material equity dilution.

Our first well on Tendrara (TE6) has transformed the company, proving up 300Bscf and enabling the company to accelerate to first gas in early 2019 (from which point the licence will be self-funding). Further to the success at TE6, the Company believes in the possibility of a super-giant gas field in Eastern Morocco and will be looking to prove up the multi Tcf nature of the field with an outpost well (TE8) and further seismic. The Company is currently awaiting the results of its second well on the structure (TE7).

The final step in the journey involves continued expansion into the greater Mediterranean area, likely focused on gas and probably achieved through acquisition. This will be combined with consolidation within Italy and Morocco, where possible. We have the skills on board to originate and execute transformational transactions.

So, in summary, Sound Energy is a small but growing team focused on “shaping moves” and working to deliver a substantial regional gas company.

James Parsons
Chief Executive Officer
January 2017