RNS Number : 6197R
Sound Energy PLC
10 March 2016
 

10 March 2016

 

Sound Energy plc

("Sound Energy" or the "Company")

 

Sidi Moktar: Further Acquisition and Farm Out

Sound Energy, the Mediterranean focused upstream gas company, is pleased to announce:

(i)         the signature of a binding agreement for the acquisition of a further 50% operated interest in three onshore gas permits located in Morocco (together the "Sidi Moktar Licences") from PetroMaroc Corporation Plc ("PetroMaroc"); and

(ii)        the signature of Heads of Agreement for a farm out of Sidi Moktar to Culebra Petroleum Ltd ("Culebra Petroleum") via a partial sale of an intermediate subsidiary of Sound Energy.

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 mid case GOIP; 100%) Triassic exploration potential.

Sidi Moktar Acquisition: Signature of binding agreement with PetroMaroc

Further to the Heads of Terms announced by the Company on 26 January 2016, the Company has now signed a binding agreement to acquire, subject to regulatory approvals, PetroMaroc's 50% working interest in, and operatorship of, the Sidi Moktar Licences (the "Acquisition"). On completion of the Acquisition, Sound Energy will issue 21,258,008 new ordinary shares in the Company to PetroMaroc as consideration and will also issue 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.   These terms are identical to those announced on 26 January 2016.

Following the Acquisition the Company will hold 75% of the Sidi Moktar Licences through its 100% owned UK incorporated intermediate holding company, Sound Energy Morocco South Limited ("Sound Energy Morocco South").

Sidi Moktar Farm Out: Signature of Heads of Terms with Culebra Petroleum

The Company is also pleased to announce that it has signed Heads of Terms with Culebra Petroleum Limited for the sale of 66.67% of Sound Energy Morocco South, which will effectively entitle Culebra Petroleum to 50% working interest in the Sidi Moktar Licences. Sound Energy Morocco South is currently 100% owned by the Company and its only assets are (subject to completion of the Acquisition) Sound Energy's 75% interest in, and operatorship of, the Sidi Moktar Licences.  Culebra is an established, Guernsey incorporated, privately owned, oil and gas company which, amongst its portfolio priorities, is pursuing a North African onshore strategy. Culebra Petroleum is advised by Toronto-based Comet Energy Ltd and London-based Lyndisfarne Partners Ltd on this transaction.

As consideration for the acquisition by Culebra Petroleum of 66.67% of Sound Energy Morocco South, Culebra Petroleum will, subject to contract:

(i)         pay the Company US$6 million in cash;

(ii)        commit to an investment programme on the Sidi Moktar Licences up to a value of US$18 million, which will include a carry to Sound Energy of up to US$4.5 million; and

(iii)       assume 90% of the net profit interests granted to PetroMaroc as part of the Acquisition (leaving Sound Energy to pay the remaining 10%).

Sound Energy Morocco South will remain operator of the Sidi Moktar Licences with both Sound Energy and Culebra Petroleum jointly staffing all operations.

James Parsons, the Company's Chief Executive, commented:

"The combination of these two transactions will position Sound Energy with:

(i)         an effective 25% working interest in Sidi Moktar with a carry to US$18 million (100%) from an aligned and well funded partner; and

(ii)        an additional US$6 million of cash, with which to continue Sound Energy's counter cyclical growth strategy."

 

For further information please contact:

Vigo Communications - PR Adviser

Patrick d'Ancona

Chris McMahon

Alexandra Roper

 

Tel: 44 (0)20 7830 9700

Sound Energy

James Parsons, Chief Executive Officer 

 

j.parsons@soundenergyplc.com

 

Smith & Williamson - Nominated Adviser

Azhic Basirov

David Jones

Ben Jeynes 

 

Tel: 44 (0)20 7131 4000

Cantor Fitzgerald Europe - Broker

Sarah Wharry

David Porter

 

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.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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