14th Jan 2016 08:16
LONDON (Alliance News) - Sound Energy PLC Thursday said it has entered into binding agreements to purchase a 25% working interest in three onshore gas permits in Morocco.
The company has entered the deal with Maghreb Petroleum Exploration SA to acquire a 25% stake in the three licences, collectively known as the Sidi Moktar licences, covering a total of 2,700 square metres in the Essaouira basin.
The binding deal follows on from an announcement back in October when Sound Energy signed heads of terms with Maghreb Petroleum.
"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," said Chief Executive Jim Parsons.
On Thursday, Sound Energy said it will issue Maghreb with 21.8 million new shares in the company. Back in October, Sound said those shares would be worth around GBP3.6 million. Sound will also pay Maghreb a 1.6% net profit interest in any future cashflows derived from the two existing wells that have already been drilled on the permits.
The licences have two wells already drilled, which led to one gas discovery. Initial estimates by Sound have indicated the Kechoula discovery could have around 293.0 billion standard cubic feet of gas in place, with a further 1.0 trillion cubic feet of further exploration potential.
Sound shares were up 0.3% to 17.05 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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