TIDMSOU
RNS Number : 6571K
Sound Energy PLC
22 December 2022
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation ("MAR") (EU) No. 596/2014, as incorporated into UK law
by the European Union (Withdrawal) Act 2018. Upon the publication
of this announcement, this inside information is now considered to
be in the public domain.
22 December 2022
Sound Energy plc
("Sound Energy", the "Company" and together with its subsidiary
undertakings the "Group")
Exploration Permit Update
Sound Energy, the transition energy company, provides an update
regarding its exploration permits at Grand Tendrara, Anoual and
Sidi Moktar.
Highlights
-- Grand Tendrara exploration permits (Sound Energy holds 75% interest and operatorship)
o Morocco's L'Office National des Hydrocarbures et des Mines
("ONHYM") has approved the Company's application to enter the
optional First Complimentary Period under the Grand Tendrara
Exploration Permits consisting of 2 years to 1 October 2024 (the
"Grand Tendrara First Complimentary Period")
o Work commitment for the First Complimentary Period comprises
the drilling of one exploration well with a Triassic objective
o The entry of the First Complimentary Period remains subject to
Moroccan Energy and Finance Ministerial approval
-- Anoual exploration permits (Sound Energy holds 75% interest and operatorship)
o ONHYM has approved the Company's application for a 12-month
extension to the Anoual Exploration Permits initial period to 8
January 2024 (the "Anoual Initial Period")
o Remaining work commitment in the Anoual Initial Period is the
drilling of one exploration well with a Triassic objective.
o Extension of the Anoual Initial Period is subject to Moroccan
Energy and Finance Ministerial approval
-- Sidi Moktar exploration permits (Sound Energy holds 75% interest and operatorship)
o ONHYM has agreed a 12-month extension to the Sidi Moktar
Exploration Permits Initial Period, which ended on 9 October 2022
(the "Sidi Moktar Initial Period"), to 9 October 2023 and has
accordingly reduced the optional First Complimentary Period of 3
years by 12 months to 2 years. This is in order that the Company
completes the committed work programme and progresses this highly
prospective basin.
o Extension of the Sidi Moktar Initial Period is subject to
Moroccan Energy and Finance Ministerial approval
Grand Tendrara Exploration Permits
Further to the Company's announcement of 20 October 2022, and
subject to Ministerial approval, the Company is pleased to confirm
that ONHYM has approved the Company's application to enter the
optional Grand Tendrara First Complimentary Period consisting of 2
years to 1 October 2024.
The Grand Tendrara Permits cover approximately 14,411 square
kilometres in Eastern Morocco and the Company has historically
completed the full work commitment for the initial Grand Tendrara
exploration period of 4 years, within the total duration of 8 years
commencing on or about 1 October 2018, by previously drilling the
TE-9 and TE-10 exploration wells with Triassic objectives.
The work commitment for the Grand Tendrara First Complimentary
Period, which will run until or about 1 October 2024, will, subject
to ministerial approval, comprise the drilling of one exploration
well with a Triassic objective. The Company expects to fulfil this
commitment from the planned subsalt drilling opportunities within
the Trias Argilo-Gréseux Inférieur ("TAGI") gas reservoir detailed
in the Company's announcement of 9 August 2022. The TAGI is the
proven reservoir of the TE-5 Horst gas accumulation within the
Tendrara Production Concession currently under development by the
Company and its joint venture partner ONHYM.
The Company has high-graded the SBK-1 and TE-4 Horst structures,
both of which were previously drilled, in 2000 and 2006
respectively,
The gross exploration potential, expressed as Gas
Initially-in-Place ("GIIP"), of the high-graded structures
currently considered by Sound Energy to be the structures to be
considered for the meeting of the Grand Tendrara First
Complimentary Period work commitment are as follows:
Target name Unrisked Volume Potential Chance of
Gas Initially-in-Place (Bcf) Success
Gross (100%) basis
------------------------------------
Low Best High Mean
------- -------- -------- -------
TE-4 Horst Structure 153 260 408 273 36%
------- -------- -------- ------- ----------
SBK-1 Structure 71 130 225 140 50%
------- -------- -------- ------- ----------
The Company also announces that ONHYM has approved an amendment
to the governing Petroleum Agreement to the Grand Tendrara
Exploration Permits. This amendment, subject again to Moroccan
Energy and Finance Ministry approval, will comprise an amendment to
the Bank Guarantee and Parent Company Guarantees required to be
placed by Sound Energy Morocco East.
On entry to the Grand Tendrara First Complimentary Period, the
Company will be required to relinquish a portion of the permitted
Grand Tendrara acreage. The currently proposed retained area (60%
of the current permit area) includes all Company recognised
prospectivity.
Anoual Exploration Permits
The Company is also pleased to report that ONHYM has approved a
12-month extension to the Anoual Initial Period to 8 January
2024.
The Anoual Permits cover 8,873 square kilometres in Eastern
Morocco and the Company, as operator, holds 75% interest in the
Anoual Permits, with the remaining 25% interest held by joint
venture partner, ONHYM.
Subject to Moroccan Energy and Finance Ministry approval, the
length of the Anoual Initial Period defined under the Petroleum
Agreement will now be 6 years and 4 months, commencing on or about
8 September 2017. The work programme commitments for the Anoual
Initial Period, details of which are provided below, remain
unchanged.
In providing its approval, subject to Ministerial approval, for
the extension to the Anoual Initial Period, the length of the first
Anoual complimentary period, which would commence upon the
successful completion of the now extended Anoual Initial Period,
will be reduced to 1 year and 2 months and the second complimentary
period will remain unchanged at 2 years and 6 months. The work
programmes for each of the complimentary periods will remain
unchanged.
As a result, the Anoual Permits now have a total duration of 10
years (in place of 9 years previously announced by the Company on 1
September 2021) and, following the Company having historically
fulfilled the requirements under the Anoual Initial Period to
acquire FTG-aerogradiometry and 600 kilometres of 2D seismic, the
unchanged remaining work commitments under the Anoual Permits are
as follows:
-- Anoual Initial Period of 6 years and 4 months from 8 September 2017 :
o 1 exploration well with Triassic objective to be scheduled in
2023
o The Company's estimation of the gross exploration potential of
the M5 exploration prospect, a possible candidate for the
exploration well, expressed in GIIP is as follows.
Target name Unrisked Volume Potential Chance of
Gas Initially-in-Place (Bcf) Success
Gross (100%) basis
------------------------------------
Low Best High Mean
------- -------- -------- -------
M5 Exploration 332 800 1728 943 21%
------- -------- -------- ------- ----------
-- Optional First Anoual Complimentary Period of a further 1 years and 2 months :
o Should the results of the drilling of the exploration well
drilled during the Anoual Initial Period be likely to constitute a
commercially exploitable discovery, the Company will be required to
acquire 150 square kilometres of 3D seismic or its equivalent in 2D
seismic data. If the results of the exploration well drilled in the
Anoual Initial Period are not likely to constitute a commercially
exploitable discovery, the Company will undertake further
geological and geophysical studies but will not be required to
acquire this additional seismic.
-- Optional Second Anoual Complimentary Period of a final 2 years and 6 months:
o A further single exploration well with Triassic objective.
Sidi Moktar exploration permits
The Company is also pleased to report that ONHYM has agreed a
12-month extension to the Sidi Moktar Initial Period to 9 October
2023.
The Sidi Moktar exploration permits cover approximately 4,712
square kilometres in Southern Morocco with an initial period of 4
years and 6 months (the "Initial Period") within the total duration
of 10 years commencing on or about 9 April 2018. The Initial Period
was to end by 9 October 2022. ONHYM has agreed to a 12-month
extension to the Sidi Moktar Initial Period to 9 October 2023 and
has accordingly reduced the optional First Complimentary Period of
3 years by 12 months to 2 years. The Company will now seek to
complete the committed work programme within the Initial Period and
progress the exploration of this highly prospective basin. The work
commitments for the Initial Period of the Sidi Moktar permits
remain to acquire and process 500 kilometres of 2D seismic, a short
well test of the Koba-1 well and abandonment of Koba-1 and Kamar-1,
if required.
Cautionary statement
The Company cautions that notwithstanding its internal estimates
for the exploration potential of the high-graded work programme
prospects across the Grand Tendrara, Anoual and Sidi Moktar
exploration permits set out above, further exploration activity,
including drilling, will be required to substantiate the estimated
exploration potential and that general exploration in the oil and
gas industry contains an element of risk and there can be no
guarantee that the Company's current estimates of volumes of gas
originally in place will be substantiated by exploration drilling
or that any volumes encountered would actually be available for
extraction.
Graham Lyon, Sound Energy's Executive Chairman, commented:
"Whilst we continue to manage the legacy fallout of COVID 19 on
business environment and our supply chains to undertake exploration
activities the situation is improving. We are now making good
progress with our farm-out process to secure partner participation
for our next exploration drilling campaign which will target
near-field opportunities within the TAGI play in Eastern Morocco
assets of Grand Tendrara and Anoual but also progress our seismic
campaign in Essaouira Basin covered by Sidi Moktar. We thank ONHYM
and the Ministry of Energy for their strong and continuing
support."
Further announcements will be made, as appropriate, in due
course.
For further information please contact:
Vigo Consulting - PR Adviser Tel: 44 (0)20 7390 0230
Patrick d'Ancona
Finlay Thomson
chairman@soundenergyplc.com
Sound Energy
Graham Lyon, Executive Chairman
Cenkos Securities - Nominated Adviser Tel: 44 (0)20 7397 8900
Ben Jeynes
Peter Lynch
SP Angel Corporate Finance LLP - Tel: 44 (0)7789 865 095
Broker
Richard Hail
Gneiss Energy Limited - Financial Tel: 44 (0)20 3983 9263
Adviser
Jon Fitzpatrick / Paul Weidman
The information contained in this announcement has been reviewed
by Sound Energy's Vice President, Geoscience, Dr John Argent, who
is a Chartered Geologist, a Fellow of the Geological Society of
London and a Member of the Petroleum Exploration Society of Great
Britain, with 25 years of experience in petroleum geology and
management and who is the qualified person as defined in the
guidance note for mining, oil and gas companies issued by the
London Stock Exchange in respect of AIM companies.
Bcf means billion standard cubic feet of gas; Tcf means trillion
standard cubic feet of gas; and best case, high case and low case
estimates are consistent with SPE (The Society of Petroleum
Engineers) 2018 PRMS (Petroleum Resource Management System)
guidelines.
Petroleum is defined as a naturally occurring mixture consisting
of, but not limited to, hydrocarbons in the gaseous, liquid, or
solid phase. Petroleum may also contain non-hydrocarbon compounds,
common examples of which are carbon dioxide, nitrogen, hydrogen
sulfide, and sulfur.
Reservoir is a subsurface rock formation that contains an
individual and separate natural accumulation of petroleum that is
confined by impermeable barriers, pressure systems, or fluid
regimes (conventional reservoirs), or is confined by hydraulic
fracture barriers or fluid regimes (unconventional reservoirs).
Resources are all quantities of petroleum (recoverable and
unrecoverable) naturally occurring on or within the earth's crust,
discovered and undiscovered, plus those quantities already
produced.
Gas Initially-in-Place (GIIP) is the total quantity of gaseous
petroleum that is estimated to exist originally in naturally
occurring reservoirs, as of a given date.
Forward looking statements
Certain statements in this announcement are forward-looking
statements which are based on the Company's expectations,
intentions and projections regarding its future performance,
anticipated events or trends and other matters that are not
historical facts. Generally, the words 'will', 'may', 'should',
'continue', 'believes', 'targets', 'plans', 'expects', 'aims',
'intends', 'anticipates' or similar expressions or negatives
thereof identify forward-looking statements. These statements are
not guarantees of future performance and are subject to known and
unknown risks, uncertainties and other factors that could cause
actual results to differ materially from those expressed or implied
by such forward-looking statements. Factors that would cause actual
results or events to differ from current expectations, intentions
or projections might include, amongst other things, changes in oil
prices, changes in equity markets, failure to establish estimated
petroleum reserves, political risks, changes to regulations
affecting the Company's activities, delays in obtaining or failure
to obtain any required regulatory approval, failure of equipment,
uncertainties relating to the availability and costs of financing
needed in the future, the uncertainties involved in interpreting
drilling results and other geological, geophysical and engineering
data, delays in obtaining geological results and other risks
associated with exploration, development and production. Given
these risks and uncertainties, readers should not place undue
reliance on forward-looking statements.
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
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