Sound Energy PLC Pre-Sale Agreement for Disposal of Badile Land (2873V)
August 06 2020 - 1:00AM
UK Regulatory
TIDMSOU
RNS Number : 2873V
Sound Energy PLC
06 August 2020
6 August 2020
Sound Energy plc
("Sound Energy" or the "Company")
Pre-Sale Agreement for Disposal of Badile Land
Sound Energy, the Moroccan focused upstream gas company,
announces that it has been notified that it's Italian former
subsidiary, Apennine Energy SPA ("Apennine"), has entered into a
Pre-Sale Agreement with a buyer pursuant to which Appenine has
agreed to sell the area of land upon which the Badile exploration
well was drilled in 2017 (the "Badile Land").
On 8 April 2018, the Company completed the disposal of its
former Italian portfolio (the "Disposal") through the sale of Sound
Energy Holdings Italy Limited ("SEHIL") to Coro Energy PLC
("Coro"). Apennine is a wholly owned subsidiary of Coro. As part of
the Disposal, Coro agreed to undertake the restoration and
subsequent sale of the Badile Land and to remit any net proceeds
from a sale of the Badile Land to the Company following completion.
Pursuant to the Disposal the Company had agreed to pay the Badile
Land restoration costs (EUR 870,000) to Coro. To date, the Company
has paid EUR 237,000 in administrative, permitting and preparatory
costs in relation to the proposed restoration activities.
Apennine has now entered into a binding Pre-Sale Agreement with
a buyer in respect of the proposed sale of the Badile Land pursuant
to which the buyer has agreed, in addition to purchasing the Badile
Land, to take responsibility for meeting the remaining costs of the
restoration of the Badile Land associated with the historical
drilling activity on the site. The restoration works will continue
to be carried out by Apennine but the costs of these activities
will, under the terms of the Pre-Sale Agreement, now be invoiced
directly to the buyer and not the Company.
Under the Pre-Sale Agreement, the sale of the Badile Land will
proceed in two independent stages, being an initial sale of "Area
1", on which there are no restoration works to be undertaken, for a
consideration of EUR 300,000 and a subsequent sale of "Area 2",
which remains subject to the requirement for restoration works to
be carried out and certified as complete, for a consideration of
EUR 350,000. The restoration works on Area 2 are pending a decision
of the Italian local authorities as to the proposed scope of the
restorative actions. The completion of the sale of Area 1 is not
conditional on the completion of the sale of Area 2.
Whilst the Pre-Sale Agreement is binding as to its terms, the
sale of Area 1 is subject inter alia to the entry of a further
definitive Area 1 land sale contract prior to 10 October 2020 and
the sale of Area 2 is subject to inter alia receipt of Italian
ministerial certification of the satisfactory completion of
restoration activities (with a longstop date of 31 December 2023)
and to the entry of a further definitive Area 2 land sale contract
.
Upon successful completion of the sale of Area 1 and Area 2, the
Company would anticipate receiving a total net consideration of EUR
600,000, net of administrative and legal costs.
Graham Lyon, Sound Energy's Executive Chairman, commented:
"Confirmation that Sound Energy will not, pursuant to the
Pre-Sale Agreement, be exposed to the ongoing restoration
obligations in Italy, and that Sound is expected to benefit from
the terms of the sale of the Badile Land between Appenine and the
buyer, will enable our small team to focus entirely on the
Company's strategy of transitioning the Company into a cash
generating business with significant exploration potential."
For further information please contact:
Vigo Communications - PR Adviser Tel: 44 (0)20 7390
Patrick d'Ancona 0230
Chris McMahon
Sound Energy questions@soundenergyplc.com
Graham Lyon, Executive Chairman
Tel: 44 (0)20 7397
Cenkos Securities - Nominated Adviser 8900
Ben Jeynes
Russell Cook
Turner Pope Investments (TPI) Ltd - Broker Tel: (0)20 3657 0050
Andy Thacker
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
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END
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