7 January 2019
Sound Energy plc
("Sound Energy" or the "Company")
Eastern Morocco: Further TE-10 Update
Sound Energy, the Moroccan focused upstream gas company, is delighted to announce a further update on the Company's TE-10 exploration well following the identification of gas bearing sands within and below the currently mapped TAGI structural closure, which potentially materially de-risks the stratigraphic upside in North East Lakbir in the Company's Greater Tendrara licence area. The North East Lakbir stratigraphic trap had a pre-drill mid case potential on a gross (100%) basis of 2.7 Tcf gas originally in place ("GOIP") (4.5 Tcf GOIP upside case and a 1.5 Tcf GOIP low case) and the smaller TAGI structural closure had a mid case potential, on a gross (100%) basis, of 128 Bcf GOIP (210 Bcf GOIP upside case and a 75 Bcf low GOIP case).
The Company also confirms the achievement of total depth ("TD") with TE-10, the potential identification of additional thin bedded net pay and the successful recovering of a gas sample to surface.
The TE-10 well was the second in Sound Energy's current three well exploration programme in the Tendrara area designed to explore three geologically-independent plays and to establish the potential of the basin. The well is located approximately 25 kilometres to the northeast of the recently awarded Tendrara production concession, which contains the TE-5 Horst discovery unlocked by Sound Energy in 2016-17.
The TE-10 well has been drilled to a TD at 2,218m measured depth ("MD"), 209m MD below the base of the TAGI sandstone sequence, in an, as yet, undated section of mudstones and minor thin bedded sandstones, with gas shows down to 2,070m MD.
The Company announced the preliminary results of the intermediate TE-10 logging results on 27 December 2018, which included a potential TAGI gross reservoir sequence from 1,899m MD to 2,009m MD and an initial net pay estimate of up to 10.5m, with an average porosity of 8%.
The Company has now completed the FMI (high definition formation micro-imager log) which provides a microresistivity image of the well bore at a much finer resolution than the initial logging suite. Significantly, the FMI has potentially identified the presence of additional thin bedded net pay within the previously identified potential gross reservoir interval between 1,899m MD to 2,009m MD. Quantification of the overall net pay is underway and will require substantiation from side-wall core analysis and further wireline log evaluation.
The Company is also very pleased to confirm that a gas sample (comprising C1 to C5 hydrocarbons) was successfully recovered from one of these pay intervals at approximately 1,937m MD using a MDT (modular formation dynamics tester system). The successful retrieval of this gas sample confirms the presence of moveable hydrocarbons in the reservoir, and importantly is the first successful MDT gas test from the TAGI sandstone in the Tendrara licence (where testing has historically been hampered by the tight nature of the sandstone).
Following the acquisition of the VSP (vertical seismic profile), the Company can confirm that the gas shows observed extend below the currently mapped structural closure at approximately 1,958m MD. This suggests the gas accumulation may extend updip into the stratigraphic trap. Seismic interpretation and modelling is underway to assist with internal estimates of gas resources within the discovery.
With drilling operations now concluded, plans are now in progress to conduct a well test over the reservoir interval. This is expected to occur during February 2019, after rig de-mobilisation and mobilisation of the necessary testing equipment.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information please contact:
Vigo Communications - PR Adviser
Tel: 44 (0)20 7390 0230
James Parsons, Chief Executive Officer
JJ Traynor, Chief Financial Officer
Cenkos Securities - Nominated Adviser
Tel: 44 (0)20 7397 8900
RBC Capital Markets - Joint Broker
Tel: 44 (0)20 7653 4000
Macquarie Capital (Europe) Limited - Joint Broker
Tel: 44 (0)20 3031 2000
The information contained in this announcement has been reviewed by Sound Energy's Exploration Director, Brian Mitchener, a chartered petroleum geologist. The estimated volumes are made in accordance with SPE standards. Tcf means trillion standard cubic feet of gas and Bcf means billion standard cubic feet of gas.