TIDMSOU
RNS Number : 2411X
Sound Energy PLC
20 February 2017
20 February 2017
Sound Energy plc
("Sound Energy", the "Company" and together with its
subsidiaries the "Group")
Proposed Acquisition Update
Sound Energy, the African and European focused upstream gas
company, is pleased to announce, further to the Company's
announcement of 19 January 2017, that it has entered into binding
agreements with Oil & Gas Investment Fund S.A.S. ("OGIF") for
the conditional acquisition by the Company of a further 20 per
cent. interest in the Company's Tendrara exploration permits,
rights to apply for a 75 per cent. operated interest in an
exploration permit for the Meridja area (over which the Company had
previously exercised an existing option to acquire a 55 per cent.
operated interest, conditional on regulatory approval) and an
application and/or rights to apply for a 75 per cent. position in
certain relinquished area(s) of the Tendrara exploration permit
areas (the "Acquisition").
The consideration for the Acquisition will be the issue, on
completion, of 272,000,000 new ordinary shares in the Company (the
"Consideration Shares"), the issue of which remains subject to
Sound Energy shareholder approval at a general meeting of the
Company ("General Meeting").
The Consideration Shares will represent approximately 28.8 per
cent. of the Company's enlarged issued share capital following the
issue of the Consideration Shares (assuming no further share issues
prior to completion). At the mid-market closing price of 93.50
pence per Sound Energy ordinary share on 17 February 2017, being
the last practicable date prior to this announcement, the
Consideration Shares had an implied market value of approximately
GBP254.3 million.
In connection with the Acquisition, the Company and OGIF have
also entered into a relationship agreement which, from admission of
the Consideration Shares, will regulate the ongoing relationship
between OGIF and the Company to ensure that the Company is capable
of carrying on its business independently of OGIF and to ensure
that transactions and relationships between OGIF and the Company
are at arm's length and on a commercial basis.
A circular containing details of the Acquisition and a notice
convening a General Meeting for the purposes of seeking authority
for the issue of the Consideration Shares (the "Circular") will
shortly be posted to shareholders.
The Acquisition
Under the Acquisition, Sound Energy will acquire:
Tendrara
A further 20 per cent. interest in the Tendrara exploration
permits. The Tendrara exploration permits are located onshore in
Eastern Morocco and cover some 14,857 square kilometres.
Conditional on, inter alia, shareholders passing the resolution at
the General Meeting, Sound Energy will have an increased 75 per
cent. operated interest in Tendrara on a gross basis, representing
a 47.5 per cent. operated interest in Tendrara net of the
Schlumberger net profit interest arising from the Schlumberger
synthetic farm in announced on 29 December 2015. The remaining 25
per cent. interest in Tendrara is held by Morocco's Office National
des Hydrocarbures et des Mines ("ONHYM").
Prior to completion of the Acquisition, and pursuant to the June
2015 Tendrara farm in agreement between OGIF and the Group, the
Company was granted an initial 37.5 per cent. operated interest in
December 2015, on receipt of Moroccan Ministerial approval.
Following the drilling of TE-6, and in June 2016, the Group elected
to apply for the first complementary period under the Tendrara
exploration permits - which brought with it a commitment to a
second well at Tendrara. Following the drilling of TE-7, the
Company's second well at Tendrara, the Group's entitlement to a
further 17.5 per cent. interest in Tendrara was crystallised. Legal
transfer of that 17.5 per cent. interest in Tendrara to the Group
remains subject to receipt by the Company of all Moroccan
regulatory approvals and consents, including approvals and consents
from the Moroccan Energy and Finance ministries and ONHYM, the
receipt of which is a condition of the Acquisition.
Meridja
A 75 per cent. interest in a reconnaissance permit for the
Meridja area and the accompanying rights to apply for the
exploration permit. Meridja is adjacent to the Tendrara exploration
permits, covers an area of 8,873 square kilometres and was
previously subject to an option agreement between Sound Energy and
OGIF under which Sound Energy was granted an option to acquire a 55
per cent. interest in Meridja (the "Meridja Option"). Sound Energy
announced on 20 June 2016 that it had exercised the Meridja Option,
subject to regulatory and other approvals, which remain
outstanding.
Completion of the Acquisition will render it unnecessary to
finalise the completion of the Meridja Option. The remaining 25 per
cent. interest in Meridja will be held by ONHYM.
Relinquished Tendrara Area
The OGIF interests to be acquired under the Acquisition also
include an existing application for and/or rights to apply for a
75% position in certain relinquished area(s) of the Tendrara
exploration permits.
In accordance with the Moroccan Hydrocarbon Code, and consistent
with all exploration permits in Morocco, the parties to the
Tendrara exploration permits, being ONHYM, OGIF and Sound Energy
Morocco SARL AU (a wholly owned affiliate of the Company), are
required to relinquish a proportion of the Tendrara exploration
permit areas over time subject to a maximum relinquishment of 50
per cent. of the exploration permits' acreage. The area to be
relinquished is at the election of the parties to the Tendrara
exploration permits (subject to regulatory consents) and the
accrued Tendrara relinquishment requirement to date is
approximately 5,100 square kilometres. The relinquishment
requirement does not affect the Company's preliminary volume
estimates for Tendrara and Meridja announced by Sound Energy on 1
February 2017. Completion of the Acquisition will result in the
Company acquiring an OGIF application for and/or a right to apply
for a 75% position in certain relinquished areas of Tendrara.
The Acquisition and the transfer of the 17.5 per cent. interest
in Tendrara to be transferred to the Group is subject to the
receipt by the Company of all Moroccan regulatory approvals and
consents, including approvals and consents from the Moroccan Energy
and Finance ministries and ONHYM.
The Relationship Agreement
In connection with the Acquisition, the Company and OGIF have
entered into a relationship agreement (the "Relationship
Agreement") which will regulate the ongoing relationship between
OGIF and the Company to ensure that the Company is capable of
carrying on its business independently of OGIF and to ensure that
transactions and relationships between OGIF and the Company are at
arm's length and on a commercial basis. Pursuant to the
Relationship Agreement, conditional upon admission of the
Consideration Shares, OGIF has also agreed:
-- Not to dispose of any of the Consideration Shares for a
period of twelve months from admission of the Consideration Shares;
and
-- Not to exceed 29.9 per cent. ownership of the Company or
launch and/or trigger individually or by virtue or acting in
concert with a third party a takeover offer for the Ordinary Shares
not held by OGIF, other than in circumstances where OGIF has first
obtained the recommendation of the Board (acting by a majority of
the Independent Directors) for a period of 36 months from the date
of admission of the Consideration Shares.
Under the Relationship Agreement, OGIF will be entitled to
appoint one Non-Executive Director to the Board for so long as OGIF
continues to hold more than 10 per cent. of the Company's issued
ordinary shares. Furthermore, voting on the appointment and/or
removal of any director of the Company other than the nominee of
OGIF appointed to the Board shall be a matter for independent
shareholders.
For further information please contact:
Vigo Communications - PR Adviser Tel: +44 (0)20 7830 9700
Patrick d'Ancona
Chris McMahon
Alexandra Roper
Sound Energy j.parsons@soundenergyplc.com
James Parsons, Chief Executive Officer
Smith & Williamson - Nominated Adviser Tel: +44 (0)20 7131 4000
Azhic Basirov
David Jones
Ben Jeynes
RBC Capital Markets - Broker Tel: +44 (0)20 7653 4000
Matthew Coakes
Martin Copeland
Laura White
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQSFUFWWFWSEIE
(END) Dow Jones Newswires
February 20, 2017 02:00 ET (07:00 GMT)
Sound Energy (LSE:SOU)
Historical Stock Chart
From Apr 2024 to May 2024
Sound Energy (LSE:SOU)
Historical Stock Chart
From May 2023 to May 2024