Sound expands in east Morocco
London-listed Sound Energy said on June 14 it had reached a deal to acquire Schlumberger's interests in its oil and gas assets in east Morocco for an initial payment of just $1.
Under the transaction, Sound will expand its positions at the Anoual and Greater Tendrara exploration permits by 27.5% to 75%, and gain full control over its 75% interest in the Tendrara concession. Schlumberger currently has a 27.5% indirect interest in Tendrara through a contract with Sound.
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The deal is subject to certain conditions being met on or before September 5. Besides the symbolic initial payment, Sound will also pay Schlumberger 8-11% of net profits from the Tendrara concession during its first 12 years of production.
"We are delighted to have increased our working interest in our principal assets in eastern Morocco on highly attractive terms," Sound chairman Graham Lyon said. "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."
TE-5 Horst is the first stage of Tendrara's development and will involve the construction of a micro-LNG plant. The company has signed a heads of agreement on offtake from the plant with Afriquia Gaz, Morocco's largest LPG distributor, which if finalised will mean it is fully funded for the project.
Sound has also lined up Italfluid Geoenergy as an engineer to build the plant.