Sound Energy (SOU) , a Mediterranean-focused oil and gas explorer, announced a binding agreement for the partial divestment of its Moroccan assets.
Sound Energy initially announced the disposal in June 2024, whereby the entire issued share capital of its wholly-owned Sound Energy Morocco East (SEME) would be sold to Managem SA. SEME holds a 55% working interest in the Tendrara production concession and 47.5% interests in the Grand Tendrara and Anoual exploration permits in Morocco.
Today, SOU confirmed the receipt of formal approval from the Moroccan Minister of Energy Transition and Sustainable Development to SEME continuing as the operator of the Tendrara exploitation concession and the Anoual and Grand Tendrara exploration permits, following completion of the transaction.
As previously announced, the transaction remains conditional upon 'the satisfaction or waiver by the parties of the remaining conditions precedent to the sale and purchase agreement' with further announcements expected in the coming weeks. SOU shares gained 1.30% on the news.
In its recently issued interim results for the 6 months to June 30, 2024, SOU reported good progress at Tendrara, with Phase 1 of the Micro LNG project advancing at pace. This included completed workovers of both wells necessary for first gas, and ongoing construction of an mLNG tank. Plant equipment is scheduled to be delivered by end of 2024, with gas production expected in 2025.
Phase 2 - a gas pipeline - also advanced, with project financing progressed with exclusive lead arranger Attijariwafa Bank, Morocco's largest bank. Post-period, SOU entered a bridge financing debt facility for up to £1.5m to provide additional flexibility.
Sound Energy's partnership with Managem is a notable milestone and value inflection point in the development of Tendrara, as the latter is a significant operator in Morocco with a strong base, and substantial financing and local experience.
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