Awarded Best AIM Company 2016

Share price at 04:14 42.50GBp

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Area:
14,500 km2

Status:
permit

Effective
date:
23 april 2013

Term:
8 years

A prospective resource with multiple tcf potential

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Overview

Area: 14,500 km​2

Status: Permit

Effective date: 23 April 2013

Term: 8 years

Interest:

  • Net effective interest of 47.5%, subject to completion of OGIF transaction

Highlights

  • TE-6 Vertical well, 28m net pay, flow achieved pre stimulation, 17 mmscf/d achieved post-stimulation
  • TE-7 Horizontal well,  32 mmscf/d after clean up: Successful Extended Well test
  • TE-8 Step out appraisal well underway: Results March 2017
  • Potential for super-giant (multi Tcf) connected gas field

Permit Area

  • Figuig Province, North-East Morocco
  • 120 km from Gazoduc Maghreb Europe (GME) pipeline (connecting Algeria and Morocco to the Spanish/Portuguese gas grids)
  • Sub-divided into eight blocks
  • Combined area of 14,500 km2.

Geology

  • Represents a continuity of the Algerian Triassic Province and Saharan Hercynian platform

Partnerships

  • Sound Energy farmed in to the Tendrara licence in June 2015, taking a 55% working interest in the licence, partnering ONHYM (25% interest) and Oil & Gas Investment Fund (“OGIF”) (20% interest) and assuming Operatorship
  • December 2015, Sound entered into a Field Management Agreement (FMA) with Schlumberger. Schlumberger agreed to fund a significant portion of the capital expenditure on the first three Tendrara wells and provide technical services, equipment and personnel to Sound Energy as Operator in exchange for an upside linked to production performance.

Oil and Gas Investment Fund

  • February 2017, Sound Energy entered into binding agreements with Oil & Gas Investment Fund S.A.S. (“OGIF”) for the conditional acquisition by the Company of a further 20 % interest in the Company’s Tendrara exploration permits and an application and/or rights to apply for a 75 % position in certain relinquished area(s) of the Tendrara exploration permit areas. These agreements were approved by Sound Energy shareholders at a general meeting in March 2017.

Well Results

  • First well (TE-6): During the first half of 2016, the first Tendrara well, TE-6, was drilled to a measured vertical depth of 2,665 metres and successfully encountered approximately 28 metres of net gas pay in the TAGI reservoir. Flow was achieved pre-stimulation and, post-stimulation, a rate of 17 MMscf/d was achieved. This highly commercial rate was significantly above initial expectations.
  • Second well (TE-7): the Company’s second Tendrara well (TE-7) was drilled successfully to a total measured depth of 3,459 metres, corresponding to a vertical depth of 2,611 metres. TE-7 has a total contact length through the TAGI reservoir of some 837 metres, including a 700 metres sub-horizontal section. A gas flow rate was achieved, post stimulation and clean up, of 32 MMscf/d. This rate was significantly above the Company’s pre-drill expectations. In January 2017, a successful extended well test was completed. The extended test results are consistent with the Company’s estimates and confirm the good deliverability of the TAGI reservoir, the horizontal well concept and the Company’s view of the significant potential of the field.
  • Third well (TE-8): Drilling commenced at this well on 19 February 2017. It is an exploration / appraisal well some 12 kilometres to the Northeast of TE-7 with the objective of proving up significant additional volumes in the TAGI reservoir whilst also, for the first time, drilling further into the Paleozoic formation.
  • In March 2017 the Company confirmed the presence of a TAGI sand sequence, commencing at a measured depth of 2,643 metres, and the presence of gas shows in the TAGI sands.

Upside potential

Following completion of a basin study, preliminary estimates from the Company indicate a range of volumes across the entire Tendrara and Meridja permit areas, with a 9 Tcf low case for unrisked original gas in place (gross) and, if all the key elements of the petroleum system’s model are present, an upside case of 31 Tcf of unrisked original gas in place (gross). Further exploration activity, including the acquisition of additional 2D and 3D seismic and the requirement for further drilling, will be required to substantiate the estimated exploration potential of the Basin.

 

Future focus

The forward Tendrara / Meridja work programme is focused on accelerating the exploration activity to unlock the ultimate potential of the Basin and advancing preparations to early first gas and will include:

  • Completion of the ongoing reprocessing of the existing 2D and 3D seismic to further reduce the range of uncertainty over the Tendara-Lakbir horst.
  • Preparation of the field development plan.
  • Acquisition of an airborne gradiometry survey to delineate the Basin geometry and enhance the understanding of the Paleozoic potential.
  • Potential re-entry of multiple older wells drilled by previous operators (including TE-1 and TE-2).
    A Competent Person’s Report to substantiate the Company’s estimated volumes is planned prior to Final Investment Decision at the end of 2017.

TE-6

  • 28m net pay, 17 mmscf/d achieved post-stimulation

TE-8

  • Paleozoic Play Opener and Extension of TAGI Reservoir. Detailed evaluation underway.

TE-7

  • 32 mmscf/d after clean up: Successful Extended Well Test

TE-1 Re-entry

  • Q2–Q3 2017, determine GDT

Read more in Future Focus

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