UK's Sound Eyes Morocco's Multi-Tcf Potential
London AIM-listed Sound Energy CEO James Parsons has told investors that its strategy of becoming a mid-cap gas E&P company is in sight, thanks to successes on its first two Tendrara wells in eastern Morocco, with planned wells on its two other strategic plays – Badile in Italy early in 2017, and later Sidi Moktar in Morocco – as well as a new deeper well (TE-8) at Tendrara also early next year.
Sound plans to apply for a production concession on Tendrara in 1Q 2017, its Morocco manager Luca Madeddu told an October 7 conference call in which the company said its second Tendrara well (TE-7) has reached a total measured depth of 3,459 metres (vertical depth of 2,611 metres). This is the first horizontal well drilled in Morocco, he noted.
Sound said it has seen significant gas shows from the TAGI sandstones at TE-7 with an estimated total vertical net gas pay of 28 metres – about the same as its first well, TE-6, on a vertical basis. An extended TE-7 well test will follow the rigless operations for roughly 70 days, it said.
The company believes its 14,500 km² acreage Tendrara has “multi-trillion ft³” potential and, following regulatory approvals, expects to start drilling TE-8 in early 2017 and, if it gets production approval, achieve first gas and cashflows from the field in early 2019. Sound has 27.5% equity in Tendrara but – net of a Schlumberger carry of costs – pays 20% of well expenses. The field is relatively close to pipeline infrastructure.
Map showing location of Sound Energy's Tendrara and adjacent Meridja acreage and nearby infrastructure (Credit: Sound Energy)
TE-8 will be a much deeper well, targeting not just the TAGI but also the deeper Paleozoic sand objectives. Parsons noted that, in neighbouring gas giant Algeria, the Paleozoic is at least as large as the TAGI. TE-8 may be the first drilled in Morocco into the Paleozoic, he added.
Each well costs Sound Energy about $3mn, net of its Schlumberger carry, so about $15mn gross per well, said Brian Mitchener, Sound’s new executive vice president for exploration, who joined from BG where he was a regional exploration chief; he previously worked for BP and Statoil.
Mark Smedley