Sound Energy Signs Binding Agreement for Stake Buy in Three Moroccan Gas Permits

Sound Energy has signed a binding agreement to acquire further stake in three Moroccan gas permits.

The company on Thursday announced signing of a binding agreement for the acquisition of a further 50 percent operated interest in three onshore gas permits together known as Sidi Moktar licences from PetroMaroc.

Sound Energy has also inked a preliminary agreement for a farm out of Sidi Moktar to Culebra Petroleum via a partial sale of an intermediate subsidiary.

Announcement pertaining to preliminary agreement to purchase of additional stake in the three permits was made in January. Following the acquisition, the company will hold 75 percent of the Sidi Moktar Licences through its 100 percent owned UK incorporated intermediate holding company, Sound Energy Morocco South.

Meanwhile, according to preliminary farm out deal signed with Culebra Petroleum, Sound Energy will sell 66.67 percent of Sound Energy Morocco South, which will effectively entitle Culebra Petroleum to 50 percent working interest in the Sidi Moktar licences. Sound Energy Morocco South is currently 100 percent owned by the company and its only assets are (subject to completion of the acquisition) Sound Energy's 75 percent interest in, and operatorship of, the Sidi Moktar licences.

Culebra Petroleum will, subject to contract, pay the company $6 million in cash and commit to an investment programme on the Sidi Moktar licences up to a value of $18 million, which will include a carry to Sound Energy of up to $4.5 million.

The Sidi Moktar licences cover 2,700 sq kms in the Essaouira basin, central Morocco and contain a material existing gas discovery in the Lower Liassic (Kechoula). Two wells have already been drilled at Kechoula and a near term extended well test is awaited prior to expected commercial production, the company stated.

Kechoula has been estimated to have an unrisked mid case GOIP of 293 Bscf. The Sidi Moktar licences are also estimated to have significant (in excess of 1 Tcf of unrisked GOIP) Triassic exploration potential.