Schlumberger Asset Sold for Initial Payment of $1
Sound Energy plc has announced that it has entered into a sale and purchase agreement with Schlumberger Holdings II Limited to buy the entire issued share capital of Schlumberger Silk Route Services Limited (SSRS).
SSRS holds a 27.5 percent participating interest in the Anoual and Greater Tendrara exploration permits in Eastern Morocco, together with a 27.5 percent indirect interest in the Tendrara concession. Following completion of the acquisition, Sound Energy will control operated working interests of 75 percent in the exploration permits and in the concession.
As of December 31, 2020, SSRS had unaudited net assets of $87.1 million and recorded a loss for the year before tax of $200,000. Under the deal, Sound Energy is making an initial payment of $1 in cash on completion. The company added that it may make future payments pursuant to a profit sharing deed (PSD). The principal terms of the PSD will see Sound Energy pay an amount equivalent to between eight percent and 11 percent of total net profits from the Tendrara concession over a period of 12 years from first commercial production.
In the event of a cash disposal by Sound Energy of part or the whole of the SSRS’s interest in the exploration permits on or before February 28, 2023, Schlumberger Holdings II Limited would be entitled to receive 27.5 percent of the net cash proceeds related to the disposal of the SSRS permit interest. This would rise to 55 percent of proceeds related to the SSRS permit interest in the event of such a disposal occurring prior to December 31, 2021.
“We are delighted to have increased our working interest in our principal assets in Eastern Morocco on highly attractive terms,” Graham Lyon, Sound Energy’s executive chairman, said in a company statement.
“This accretive transaction will, when completed, underline Sound Energy’s position as the leading gas developer in Morocco and position us to generate enhanced returns, cashflow, and value as we move forward the phased development of the TE-5 Horst,” he added.
“The increased position on the licenses significantly enhances our discovered and undiscovered resource position in Eastern Morocco as we continue to deliver on our phased development strategy,” Lyon went on to say.
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