TIDMSOU
RNS Number : 6922L
Sound Energy PLC
21 July 2017
21 July 2017
Sound Energy plc
("Sound Energy" or the "Company")
Eastern Morocco Update: Licence and Geophysical Operations
Sound Energy, the African and European focused upstream gas
company, is pleased to provide an update on its Eastern Morocco
acreage post the OGIF acquisition, which is expected to complete
shortly, and the recently initiated regional geophysical
programme.
Background
The Company operates the Tendrara permit (75% operated position,
which is shared 27.5% with Schlumberger thereby resulting in a net
47.5% Sound Energy position). The Tendrara permit is currently in
the first complimentary period, transitioning into the second
complimentary period (which would expire in August 2020) in August
2018. The Company's three existing wells on Tendrara (TE6, TE7 and
TE8) have already fulfilled the work programme for the first and
second complimentary periods. The Company expects, subject to
regulatory approval, to secure a new eight year licence in 2018,
after the first complimentary period ends.
The Company is currently pursuing (as detailed below) a
geophysical programme including a Full Tensor Gravity (FTG)
gradiometry survey and 2D seismic which, as previously announced,
is to be provided, and funded, by Schlumberger in accordance with
the terms of the Schlumberger commitments announced by the Company
on 25 April 2017.
Licence Update post acquisition of Oil & Gas Investment Fund
S.A.S. ("OGIF") interests
The Company is progressing well with its acquisition of various
licences in Eastern Morocco from OGIF (the "Acquisition") and is
expecting completion of the Acquisition at the end of Q3 2017. As
announced on 20 February 2017 the Acquisition will see Sound Energy
acquire: (i) a further 20% interest in the Company's Tendrara
exploration permits; (ii) rights to apply for a 75% operated
interest in an exploration permit for the Meridja area (over which
the Company had previously exercised an existing option to acquire
a 55% operated interest, conditional on regulatory approval); and
(iii) an application and/or rights to apply for a 75% position in
certain relinquished area(s)* of the Tendrara exploration permit
areas.
On completion of the Acquisition OGIF will be issued with 272
million new ordinary shares in the Company (the "Consideration
Shares"). The issue of the Consideration Shares was approved by
Sound Energy shareholders on 15 March 2017 and OGIF will be locked
in for a period of 12 months from issue.
Various new licence agreements have now been entered into by the
Company and Morocco's Office National des Hydrocarbures des Mines
("ONHYM"). These agreements, details of which are set out below,
will come into force at the same time as completion of the
Acquisition, which is now only pending approval of the Moroccan
Energy and Finance ministries. As is normal in Morocco, a bank
guarantee of US$2.95 million is being lodged by the Company and its
partners to cover a proportion of the work commitments under the
various licences.
Meridja / Anoual
The first agreement relates to the Petroleum Agreement covering
what is currently known as the Meridja reconnaissance area. The
acreage covered by this new Petroleum Agreement, spans some 8,863
square kilometres and will be named Anoual. Upon completion, the
Company will hold an operated 75% position, of which 27.5% is
shared with Schlumberger resulting in a net 47.5% position for the
Company. The remaining 25% will be held by ONHYM. The Anoual
exploration permit will have a duration of 8 years from grant and,
as with all Moroccan licences, will be divided into 3 phases with
each having pre-agreed work commitments. The work commitments under
the Anoual exploration permit will be:
-- Initial period of 3 years: FTG-aerogradiometry, 600
kilometres of 2D seismic and 150 square kilometres of 3D seismic.
These elements of the Anoual exploration permit work commitments
will be provided, and funded, by Schlumberger in accordance with
the terms of the Schlumberger commitments announced by the Company
on 25 April 2017.
-- Optional First complimentary period of 2 years and 6 months:
1 exploration well with Triassic objective. Under the Moroccan
hydrocarbon code, this well can be drilled at any time (including
during the initial period) and will still count as a commitment
well for the first period.
-- Optional Second complimentary period of 2 years and 6 months:
A further single exploration well with Triassic objective. Under
the Moroccan hydrocarbon code, this well can be drilled at any time
and will still count as a commitment well for the second
period.
Tendrara relinquished acreage / Matarka
The second agreement relates to a new reconnaissance exploration
licence for the previously relinquished Tendrara acreage*, which
will also come in to effect on completion of the Acquisition. This
new reconnaissance acreage, covering 5,185 square kilometres, will
be named Matarka (the "Matarka Licence"). Upon completion of the
Acquisition, the Company will hold an operated 75% position, of
which 27.5% is shared with Schlumberger, resulting in a net 47.5%
position for the Company. As with all Moroccan reconnaissance
licences, the Matarka Licence will have a duration of 1 year from
issue. The work commitments on the Matarka Licence will be a FTG
aerogradiometry survey, which will also be provided, and funded, by
Schlumberger in accordance with the terms of the Schlumberger
commitments announced by the Company on 25 April 2017. After the 1
year period of the Matarka Licence, the Company has the right to
apply for a full exploration permit.
Eastern Moroccan Geophysical Programme
The Company is progressing seismic and gradiometry surveys which
will generate a robust prospect inventory with a view to
determining the extent and volume potential of areas not previously
surveyed to the North-East and updip of the Lakbir High and to the
West on a series of structural highs. The entire programme is
funded by Schlumberger.
Gradiometry
The gradiometry programme will include; FTG, Scalar Gravity,
Magnetics and LiDAR surveys. The programme is being initiated in
July 2017 over an area of circa 24,000 square kilometres, with the
aim of developing a basin scale model to evaluate the Paleozoic and
Triassic petroleum systems and basin potential. These operations
will be delivered by one twin-turbine light aircraft, carrying
multiple sensors, flying at an altitude of 200 metres. These
operations, as planned, are expected to take 3 months - with the
full interpretation being available during November 2017. The data
collected will also guide and enhance the forthcoming Eastern
Moroccan 2D seismic programme.
2D Seismic
In parallel, a state of the art Schlumberger WesternGeco seismic
crew equipped with single source/sensor (UniQ(TM)) recording
equipment is being mobilised to Eastern Morocco. The output from
the newly acquired 2D seismic will be augmented with co-acquired
Time Domain Electro Magnetic (TDEM), and Magneto-Telluric (MT)
measurements. The seismic shooting is being parcelled into 3 areas,
with the first starting late August and most likely targeting the
Tendrara/Anoual border area to better define a series of structural
leads. The second will follow in November attempting to define the
north-east updip closure of the Te-5 Horst and Lakbir highs, whilst
the third seismic parcel, to be shot in Q1 2018, will seek to
better define the underlying Paleozoic structural trends across a
broad regional grid to enhance the basin model.
As each of these seismic phases is completed and interpreted, a
robust high graded prospect inventory will be built. The
expectation is that the prospect inventory will be assured by a
series of Competent Persons Reports at the end of Q1 and at the end
of Q2 2018, in addition to the completion of a Competent Persons
Report on the Tendrara discovered resources to be completed at
Final Investment Decision for the development project.
James Parsons, Chief Executive Officer of Sound Energy,
commented:
"Following the recent confirmation of the plan for Tendrara
development with the successful TE7 pressure build up, I am very
pleased to report excellent progress on the OGIF acquisition and
our geophysical programme.
We, together with our strategic partner Schlumberger, are
opening a new hydrocarbon province in Eastern Morocco, which we
absolutely expect to be transformational for both Sound Energy and
Morocco.
The agreements entered into with ONYHM in relation to the OGIF
Acquisition and the grant of the new Anoual and Matarka licences
(on receipt of Moroccan ministerial approvals) will further
strengthen the Company's regional position as we execute our
strategy.
In the meantime, 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."
Note to Editor:
*In accordance with the Moroccan Hydrocarbon code, all operators
in Morocco are required to relinquish a proportion of all its
licence over time, subject to a maximum relinquishment of 50% of
the licence acreage over the 8 year term.
For further information please contact:
Vigo Communications - PR Tel: +44 (0)20 7830
Adviser 9700
Patrick d'Ancona
Chris McMahon
Alexandra Roper
Sound Energy j.parsons@soundenergyplc.com
James Parsons, Chief Executive
Officer
Smith & Williamson - Nominated Tel: +44 (0)20 7131
Adviser 4000
Azhic Basirov
David Jones
Ben Jeynes
RBC Capital Markets - Broker Tel: +44 (0)20 7653
Matthew Coakes 4000
Martin Copeland
Laura White
UPDPGUGCMUPMGMU
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