Posted by: DIGITAL LOOK NEWS
Sound Energy is progressing well on its acquisition of various licenses in Easter Morocco from the Oil and Gas Investment Fund and has signed multiple new license agreements with the country’s Office National des Hydrocarbures.
In an update to investors on its activities in Eastern Morocco, Sound said that, combined with its existing three wells at Tendrara and ongoing seismic and gradiometry surveys with its partner, Schlumberger, it was opening up “a new hydrocarbon province in Eastern Morocco which they “absolutely expect to be transformational for both Sound Energy and Morocco”.
As previously announced, the purchase of OGIF would see Sound increase its interest in the company’s Tendrara exploration permits by 20 percentage points, acquire rights to apply for a 75% operated interest in an exploration permit for the Meridja area and an application and/or rights for a 75% position in previously relinquished areas.
Since the acquistion of OGIF, it had also inked agreements with ONHYM relating to the Meridja reconnaissance area, which henceforth would be known as Anoual, and for a new reconnaisance exploration licenx for the previously relinquished Tendrara acreage.
“The agreements entered into with ONYHM in relation to the OGIF acquisition and the grant of the new Anoual and Matarka licences… will further strengthen the Company’s regional position as we execute our strategy”, said James Parsons, chief executive of Sound Energy.
To take note of, the company was expected to hold an operated 75% position of the Anoual reconnaissance exploration licence, of which 27.5% would be shared with Schlumberger, resulting in a net 47.5% position for the company.
As was customary in the North African country, a bank guarantee of US$2.95m had already been lodged by the company and its partners to cover part of the work commitments under the various licences, Sound said.
These agreements, according to management, were expected to come into force at the same time as completion of the acquisition pending approval of the Moroccan energy and finance ministries.
On completion of the transaction, OGIF would be issued with 272m new ordinary shares in Sound.
The issue of the consideration shares was approved by Sound Energy shareholders on 15 March 2017 and OGIF would be locked-in for a period of 12 months from issue.
In July, AIM-listed Sound was also to embark on a full geophysical programme, including full tensor gravity, scalar gravity, magnetics and LIDAR surveys on an area covering 24,000 square kilometres.
The data thus obtained was also expected to guide and enhance its upcoming Eastern Morrocan 2D seismic programme.
Those developments followed the recent confirmation of the plan for Tendrara development with the successful TE7 pressure build up.
Sound chief, James Parsons stressed that its agreement with ONYHM and the new licenses with strengthen its position in the region, adding that he expected the third and fourth quarters to be a busy operational period.
“We look forward to updating shareholders on our future drilling plans in Eastern Morocco and the extended well test in Southern Morocco, and to continuing to advance the Company’s position in the region. We expect the third and fourth quarters to be a busy operational period”.
For his part, FinnCap’s Dougie Youngson said: “The share price has not performed well in 2017 and in our view the market needs to see drilling restart in order for that to be turned around. What is clear is that there is a huge amount to be done operationally in order to prove up resources.”
As of 1522 BST shares in Sound Oil were down by 0.51% to 48.75p.