6 January 2016

Sound Energy plc

("Sound Energy" or the "Company")

Portfolio Update

Sound Energy, the European/Mediterranean focused upstream gas company, is pleased to provide the following update on its Moroccan and Italian gas portfolio.

Tendrara, Morocco

Further to the recently announced signatures with Schlumberger of both the strategic partnership across Europe and Africa and the Field Management Agreement specifically on Tendrara, the Company has now signed a Letter of Intent with Entrepose Drilling Morocco for the supply of a HH300 rig for the first two wells on the licence (which are expected to be back to back).  The Company, post the recently announced transaction with Schlumberger, will retain operatorship and a 27.5% effective net working interest with a 20% effective net paying interest for the first well (increasing to 25% for the second and third wells). 

Ground works are expected to be initiated at Tendrara during February.

Badile, Italy

The Company is pleased to confirm that the Lombardy Region has completed its regional approval process (which resulted in the issue of the "Intesa") on 30^th November 2015. The Company was advised on 27^th December 2015 that the central (and final) approval process will likely complete at the forthcoming "Conferenza dei Servizi", hosted by the Italian Ministry of Economic Development, which is scheduled for the end of January.  The final permission to drill is expected to be granted after this meeting.

The Company is also pleased to confirm that it has now completed, with external independent support, the acquisition of additional well stratigraphic information from the area in preparation for farming out the Badile prospect post the award of the final permission to drill.  As a result of this work, the Company has updated its assessment of the prospect increasing its chance of success to 34% (from the previous 22% estimate).  This significant improvement in the risking of the prospect is the second major improvement to the project following the recently announced Euro 5M reduction in the drilling cost.

Nervesa, Italy

Following award of the Production Concession from the Italian Ministry of Economic Development (announced on 14^th July 2015) and the signature of a GSA with the Shell Group, works to connect the onshore Nervesa well to the national gas export pipeline commenced on the 21^st of December.  The installation of the pre-fabricated skid units has now been completed and pipeline connections with the relevant welding operations will finish on the 15^th of January.  Thereafter the Company will finalise electrical and control line connections and complete final safety, pressure and control system tests.  The Company is therefore targeting production start-up around the first week of February.  The webcam continues to provide an opportunity for investors to observe the activity and progress on site.

Italian Offshore Permitting

Whilst not directly affecting the Company's onshore gas strategy, the Company notes that the Italian Parliament has recently revised the offshore permitting legislation.  Whilst the precise implications of these legislative changes are unclear, the legislation re-introduces a general ban on drilling activity within 12 nautical miles from the coastline.   There have been no material changes to the permitting of onshore assets and therefore the Company's near term drill programme remains unaffected.

Laura, Italy

Consistent with the Company's onshore gas strategy, the Company continues to plan to drill the Laura appraisal well (which is 4 Km offshore) from the onshore with a long reach deviated well.  Whilst the original well (despite the drilling from the onshore) was planned to be classified as an offshore well, the Company now plans to work with the permitting authorities in Italy to change the classification to an on-shore well and therefore avoid any potential negative consequences from the changing offshore legislation.

James Parsons, Sound Energy's Chief Executive Officer, commented:

"Sound Energy's near term operational programme includes first commercial production at Nervesa, two wells at Tendrara and a first well at Badile.  We also expect to announce shortly the continued broadening of our balanced portfolio of exploration, appraisal and production assets across the region.

The Company's Mediterranean onshore gas strategy is proving robust despite the current oil price environment and changing Italian legislation.  Our ability to attract top tier companies such as Schlumberger and Shell to work with us in the exploration, appraisal and gas production  phases underlines the quality of our portfolio and our people."

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