16 February 2022
Sound Energy plc
("Sound Energy", the "Company" and together with its subsidiaries the "Group")
Phase 1 Development - Issue of Notice to Proceed to Italfluid
Sound Energy, the energy transition company, is delighted to announce the issue to Italfluid Geoenergy S.r.l. (the 'Contractor") of "Notice to Proceed" in respect of the project contract for the Tendrara Concession mLNG Facilities Onshore, Kingdom of Morocco, between the Group and the Contractor (the "Project Contract").
The Notice to Proceed has been issued to the Contractor by Sound Energy's wholly owned subsidiary, Sound Energy Morocco East Limited ("SEMEL") and, following an initial payment of US$5 million by SEMEL (on behalf of the Tendrara Concession JV) to the Contractor (the "Initial Payment"), will oblige the Contractor to execute the works set out in accordance with the Project Contract for the provision of a gas processing and liquification facility in relation to the Phase 1 development of the Tendrara Concession.
Following the issue of the Notice to Proceed, the Company has also notified Afriquia Gaz S.A. ("Afriquia") that pursuant to the Loan Note Subscription Agreement ("LNSA") entered into between the Company and Afriquia on 29 December 2021, all necessary undertakings and agreements have been completed and that the Project Contract is now in full force and effect. As a result, the LNSA is now in full force and effect and the Group intends to immediately draw down a proportion of the funds available under the LNSA to meet the Initial Payment.
Further announcements will be made, as appropriate, in due course.
Graham Lyon, Sound Energy's Executive Chairman, commented:
"We are delighted to have issued the Notice to Proceed to Italfluid and to have satisfied all conditions to give effectiveness to both the Project Contract and LNSA, which means that following receipt of the Initial Payment by Italfluid, the execution phase of our fully funded Phase 1 micro LNG development of the Tendrara Concession will be underway. This is a key milestone for the Company and we look forward to working with our strategic partners, Italfluid and Afriquia Gaz, together with our joint venture partner, ONHYM, in developing the project and delivering gas to the Moroccan market in around 2 years."
For further information please contact:
Vigo Communications - PR Adviser
Tel: 44 (0)20 7390 0230
Graham Lyon, Executive Chairman
Cenkos Securities - Nominated Adviser
Tel: 44 (0)20 7397 8900
SP Angel Corporate Finance LLP - Broker
Tel: 44 (0)20 3470 0470
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.