1 February 2017

Sound Energy plc

("Sound Energy" or the "Company")

Preliminary Volume Estimates for Tendrara and Meridja and Moroccan Work Programme

Sound Energy, the African and European focused upstream gas company, notes the movement in the Company's share price and is pleased to provide an early stage estimate of the exploration potential of the Tendrara and Meridja permit areas (the "Basin") and confirm its 2017 Moroccan work programme.

The Company recently comissioned a preliminary basin modelling study  from a leading independent consultancy (the "Basin Model").  Following receipt of the Basin Model, the Company is pleased to announce that Sound Energy's internally estimated volumes for the exploration potential of the entire Tendrara and Meridja permit areas are 17 Tcf mid case unrisked* original gas in place (gross). The Basin Model highlights the possibility for a range of estimated 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).

The Basin Model, from which the volume estimates above are derived, is supported by:

·     the mapped inventory of discoveries, prospects and leads in the Triassic TAGI reservoir;

·     the volume of hydrocarbons generated, and available to charge, from the Paleozoic source rocks post deposition of the thick salt seal; and

·     a conceptual evaluation of the Paleozoic resource potential by analogue to neighbouring Algerian basins.

The Basin Model indicates that there is sufficient gas available to charge the existing Triassic TAGI prospects and leads and the yet to be explored Paleozoic.

The Company cautions that notwithstanding its internal estimates for the exploration potential of the Basin, it has so far only completed the first two wells on the structure which have established an estimated 300 to 500 Bscf of 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.  The Company's estimates will be subject to a Competent Person's Report to be commissioned following the drilling of TE-8 and before the Company takes Final Investment Decision on the development later in 2017.

The 2017 Tendrara / Meridja work programme will therefore be focused on accelerating the exploration activity to unlock the ultimate potential of the Basin and advancing preparations to early first gas.  The Company's 2017 Moroccan work programme will include:

Tendrara / Meridja

(covering 14,857 square kilometres** and 8,873 square kilometres respectively)

·     Ongoing reprocessing of the existing 3D seismic to further reduce the range of uncertainty over the Tendara-Lakbir horst.

·     Drilling of a bold Tendrara step-out well, TE-8, in February 2017 (with a contingent sidetrack) to increase, in a success case, the estimated volumes for original gas in place at Tendrara from 300-500 Bscf (gross) to upto 1.5Tcf of original gas in place (as announced on 15 December 2016).

·     Preparation of the field development plan, which includes the finalisation of the commercial agreements for gas sales and associated infrastructure, right-sizing of the facilities / pipeline and the optimization of the well design / spacing.

·     Immediate acquisition of an airborne gradiometry survey to delineate the Basin geometry and enhance the understanding of the Paleozoic potential.

·     Reprocessing of historical 2D seismic and acquisition of new 2D seismic to determine the extent and volume potential to the North East of the Tendrara discovery.  The acquisition of new seismic and gradiometry, which are not a commitment on the Tendrara licence, are conditional on a Tendrara licence time extension which is currently under discussion with the Moroccan authorities.

·   Re-entry of multiple older wells drilled by previous operators (including TE-1 and TE-2) to test the upside potential of the Triassic play and also explore potential disposal options for the associated CO2 expected from the reservoir.  The re-entries are also conditional on the licence extension described immediately above.

·   Preparations for further exploration wells on the Tendrara licence with a view to prove up the Company's early stage resource estimates.

Sidi Moktar

·     Re-entering the existing wells at Sidi Moktar and conducting a well test of the prospective Lower Jurassic reservoir.  Consideration is also being given to additional work programmes, including sidetrack and acquiring further 2 and 3D seismic to further evaluate the potential of the pre-salt Triassic.

*  the term 'unrisked' refers to exploration resources where no subsurface CoS (chance of success) has been applied.

**  in accordance with the Moroccan Hydrocarbon code, and consistent with all licences in Morocco, the Company will be required to relinquish a proportion of the Tendrara licence area over time subject to a maximum relinquishment of 50 per cent. of the licence acreage. The area to be relinquished is at the election of the Company (subject to regulatory consents) and the accrued Tendrara relinquishment requirement to date is approximately 5,100 square kilometres. This does not affect the volume estimates referred to in this announcement. As announced by the Company on 19 January 2017, the Company has entered heads of agreement with Oil & Gas Investment Fund ("OGIF") for the proposed acquisition of, inter alia, an existing OGIF application for a 75% position in the to be relinquished areas of Tendrara. Subject to the completion of the proposed transaction, the Company would therefore hold an application for a 75% position in the areas of Tendrara proposed to be relinquished.

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

For further information please contact:

The information contained in this announcement has been reviewed by Sound Energy's Executive Vice President, Brian Mitchener, a chartered petroleum geologist. The Company's internal estimates are made in accordance with SPE standards.

Tcf means trillion cubic feet of gas; Bscf means billion cubic feet of gas.