Sound Energy, the Mediterranean focused upstream gas company, is pleased to announce that it has entered into a binding agreement with Maghreb Petroleum Exploration S.A. for the purchase of MPE’s 25% working interest in three onshore gas permits located in Morocco.
The Sidi Moktar Licences cover 2,700 square kilometres in the Essaouira basin, central Morocco and contain a material existing gas discovery in the Lower Liassic. Two wells have already been drilled at Kechoula and a near term extended well test is awaited prior to expected commercial production. Kechoula is close to existing infrastructure and has been estimated to have an unrisked mid case GOIP of 293 Bscf (100% working interest). The Sidi Moktar Licences are also estimated to have significant (in excess of 1 Tcf of unrisked GOIP; 100%) Triassic exploration potential. The 25% working interest being acquired by Sound Energy has the benefit of being carried until first gas on the Sidi Moktar Licences (thereafter the Company will be required to fund its pro rata proportion of costs).
In consideration for the acquisition, Sound Energy will, on completion of the acquisition, issue MPE with 21,764,706 new ordinary shares in the Company and grant MPE a 1.6% net profit interest in any future cash flows from the Kechoula discovery.
The acquisition, which remains subject to conditions precedent including regulatory approvals, follows the Company’s announcement of 22 October 2015, in which the Company announced that it had entered into heads of terms with MPE (the “Heads of Terms”) in respect of an option to acquire MPE’s interest in the Sidi Moktar Licences. The option structure was subsequently deemed unnecessary as, with the consent of the Operator in the Sidi Moktar Licences, the Company was able to directly acquire MPE’s 25% interest and maintain the carry currently enjoyed by MPE.
The Company is also pleased to announce two non-board executive appointments. Leonardo Salvadori, previously Managing Director of Danagas’ Joint Venture in Egypt and Mary Hood, previously Deputy CFO at Gulf Keystone Petroleum Limited, join the Company as Business Development Director / Deputy MD Italy and Chief Financial Officer respectively.
James Parsons, the Company’s Chief Executive, commented: “Sidi Moktar is the second material asset in our onshore Moroccan portfolio and secures a 25% interest in an already successfully drilled gas discovery with potential near term production, significant deeper exploration potential and in which we are carried to first gas.
It is also a pleasure to welcome Leonardo Salvadori and Mary Hood, both of whom add further depth to the team as we continue to grow our business counter-cyclically.”