Sound Energy has signed heads of terms with Maghreb Petroleum Exploration S.A. (MPE) for the purchase of MPE's 25 percent carried working interest in three onshore oil and gas exploration permits located in the Sidi Moktar region of Morocco.
Under the heads of terms MPE has agreed, Sound Energy has the option to purchase MPE's stake in the Sidi Moktar licenses for a price of €1 ($1.13) at any time up to first commercial gas from a Sidi Moktar license. On grant of the option, Sound will issue MPE with new ordinary shares with a market value of £3.576 million ($5.531 million). Sound will also pay MPE a 1.6 percent net profit interest in any future cash flows from the two existing wells of the Kechoula discovery. A near term well test is awaited at Kechoula prior to possible commercial production. Initial estimates have confirmed Kechoula to have an unrisked mid case 293 billion cubic feet of gas originally in place.
James Parsons, Sound Energy’s chief executive, commented in a company statement:
"The option will, when granted, enable Sound Energy to secure a 25 percent carried interest in an already successfully drilled gas discovery with potential near term production and significant deeper exploration potential. An interest in Sidi Moktar would also represent the second material asset in Sound Energy's onshore Moroccan gas portfolio, which is underpinned by strong European gas fundamentals. The company now plans to work with the other partners on the Sidi Moktar licenses, with a view to accelerating progress on the license area."
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