Sound Energy PLC Project Financing Update (2942J)
12 December 2022 - 06:00PM
UK Regulatory (RNS & others)
TIDMSOU
RNS Number : 2942J
Sound Energy PLC
12 December 2022
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be in the public domain.
12 December 2022
Sound Energy plc
("Sound Energy" or the "Company")
Project Financing Update
Sound Energy, the transition energy company, is pleased to
provide a project financing update in relation to the Company's
Tendrara Production Concession, onshore Morocco.
Partner and possible Farm-Out Update
The Company announced on 9 August 2022 that it had initiated a
formal farm-out process to identify a partner for the Tendrara
Production Concession and the surrounding Grand Tendrara and Anoual
exploration permits. The objective of the area-wide approach is to
seek a co-investing partner in each licence to both fund the
expected balance of Phase 2 development costs to first gas of
approximately US$60 million net to the Company's working interest
in the Tendrara Production Concession and also to progress an
exploration and appraisal drilling programme in the Grand Tendrara
and Anoual exploration permit areas (the "Process").
Following strong levels of interest in the Process from a wide
range of credible and well-funded parties, the Company has now
received quantified non-binding indications of interest in the
Process from several parties and, following review, the Company
intends to engage in more detail with the relevant parties. Further
announcements will be made, as appropriate, in due course.
Phase 2 Development - EPC Contractor
In parallel with the farm-out process in progress, the Company
has been developing relationships with various vendors to conduct
Engineering, Procurement, Construction ("EPC") and potentially
Operations and Maintenance activities for the Phase 2 development
of the Tendrara Production Concession. Advanced negotiations are
ongoing, with suitable Consortia to undertake such work
identified.
Phase 2 Development - Lead Finance Arranger Mandate Update
The Company announced on 23 June 2022 that it had entered into
an Arrangement and Mandate letter ("Mandate") with Attijariwafa
bank (the "Arranger"), a Moroccan multinational bank and one of the
leading banks in Morocco, under which the Company mandated the
Arranger in relation to the arrangement of project debt financing
for the development of Sound Energy's Tendrara Production
Concession (the "Agreement").
Pursuant to the Agreement, the Arranger was mandated, and
provided with exclusivity by the Company for a period of eight
months, to arrange a long-term project senior debt facility with a
term of no more than 12 years of up to 2.250 billion Moroccan
dirhams (approximately US$210 million using current exchange rates)
for the partial financing of the currently estimated approximately
US$330 million total Phase 2 development cost (including
development wells post-first gas) of the Tendrara Production
Concession (the "Financing"). Under the terms of the Mandate, as
amended, the parties agreed to seek to negotiate binding terms for
the Financing by 15 December 2022.
Good progress continues to be made with the Arranger who has
recently commenced technical due diligence. To provide sufficient
time for this technical diligence process to complete, the parties
have entered into a further amendment to the Mandate in order to
extend the date by which they will seek to negotiate binding terms
for the Financing to 15 March 2023. The exclusivity provided to the
Arranger under the Mandate to arrange the Financing has also been
extended to 1 June 2023.
Commenting, Graham Lyon (Executive Chairman) said:
"The receipt of credible interest from a number of industry
participants in joining the Tendrara Production Concession
development and surrounding exploration acreage is encouraging and
the Company will now spend time to fully evaluate each and the
structure of any potential future transaction. Identifying the
Consortium for the Phase 2 development Engineering work is also key
as is the structure by which the Company engages all parties.
"Understandably Attijariwafa bank require more time for their
external experts to get familiar with the project as this would be
the first Moroccan bank led gas development financing. We look
forward to providing further positive updates as the various
project milestones are delivered."
For further information please contact:
Vigo Consulting - PR Adviser Tel: 44 (0)20 7390 0230
Patrick d'Ancona
Finlay Thomson
Sound Energy chairman@soundenergyplc.com
Graham Lyon, Executive Chairman
Cenkos Securities - Nominated Adviser Tel: 44 (0)20 7397 8900
Ben Jeynes
Peter Lynch
SP Angel Corporate Finance LLP -
Broker
Richard Hail Tel: 44 (0)7789 865 095
Gneiss Energy Limited - Financial Tel: +44 (0)20 3983 9263
Adviser
Jon Fitzpatrick / Paul Weidman
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