26 January 2016
Sound Energy plc
("Sound Energy" or the "Company")
Acquisition of Further Sidi Moktar Interest: Heads of Terms
Sound Energy, the Mediterranean focused upstream gas company, is pleased to announce that it has reached heads of agreement with PetroMaroc Corporation Plc ("PetroMaroc") in respect of Sound Energy's acquisition of PetroMaroc's 50% operated interest in three onshore gas permits located in Morocco (together the "Sidi Moktar Licences").
These heads of agreement follow Sound Energy's announcement of 14 January 2016, in which the Company announced the acquisition of an initial 25% interest in the Sidi Moktar Licences from Maghreb Petroleum Exploration S.A.
The Sidi Moktar Licences cover 2,700 square kilometres in the Essaouira basin, central Morocco and contain a material existing gas discovery in the Lower Liassic ("Kechoula"). Two wells have already been drilled at Kechoula and a near term extended well test is awaited prior to expected commercial production. Kechoula is close to existing infrastructure and has been estimated to have an unrisked mid case GOIP of 293 Bscf (100% working interest). The Sidi Moktar Licences are also estimated to have significant (in excess of 1 Tcf of unrisked GOIP; 100%) Triassic exploration potential.
Under the heads of agreement, subject to contract and regulatory and other approvals, Sound Energy will acquire PetroMaroc's 50% working interest in, and operatorship of, the Sidi Moktar Licences (the "Acquisition"). On completion of the Acquisition, Sound Energy will issue PetroMaroc with new ordinary shares in the Company with a market value of £3,650,000 and will grant PetroMaroc: (i) a 10% net profit interest in any future cash flows from the Kechoula discovery; and (ii) a 5% net profit interest in any future cash flows from structures within the Sidi Moktar Licences other than the Kechoula discovery.
The Company also announces that, with support from PetroMaroc, discussions with prospective farm in partners are progressing well.
James Parsons, the Company's Chief Executive, commented:
"This transaction will result in Sound Energy holding an aggregate 75% interest in, and operatorship of, an already successfully drilled material gas discovery with potential near term production and significant deeper exploration potential.
Operator status at Sidi Moktar unlocks this asset whilst also granting Sound control over the pace and scale of operations.
Sound Energy can now proceed to dovetail operations at Sidi Moktar with those planned at Tendrara - with the potential for material production from Sidi Moktar during 2016."
For further information please contact:
Vigo Communications - PR Adviser
Tel: 44 (0)20 7016 9573
James Parsons, Chief Executive Officer
Smith & Williamson - Nominated Adviser
Tel: 44 (0)20 7131 4000
Cantor Fitzgerald Europe - Broker
Tel: 44 (0)20 7894 8896
The information contained in this announcement has been reviewed by Sound Energy's Moroccan Managing Director, Luca Madeddu, a qualified petroleum geologist. Bscf means billion standard cubic feet of gas; Tcf means trillion cubic feet of gas; GOIP means gas originally in place; and mid case estimates refer to finding a given volume consistent with SPE (The Society of Petroleum Engineers) guidelines.