Sound Spuds 3rd Tendrara Well

UK-based Sound Energy said February 20 it spudded its third Tendrara well, onshore Morocco, the previous day. It has also entered a binding deal with Morocco's OGIF.

The TE-8 well is a step out appraisal well some 12 km northeast of its earlier TE-7 well with the objective not only of proving up significant additional volumes in the TAGI reservoir but also for the first time drilling deeper into the Paleozoic formation. Many gas reserves in neighbouring Algeria are in that deeper level.

The new well will be drilled to a depth of 2975 metres and is expected to take 40 to 50 days. If gas is found in the main well, a further 30 day sidetrack will be drilled to some 2633 metres will then seek to prove a potentially deeper gas contact about 900 metres to the north-west.  

Location of Tendrara permit onshore eastern Morocco (Map credit: Sound Energy)

Sound Energy was successful with both its earlier two Tendrara wells (TE-6 and TE-7).

The UK firm also said it signed binding agreements with OGIF, which is owned by seven Moroccan financial institutions, that put into effect its planned deal with OGIF announced January 19.

OGIF said it will be paid 272mn new ordinary shares in Sound Energy, representing some 28.8% of Sound – up from the 24.5% announced last month. The deal remains subject to a vote at Sound Energy’s annual general meeting.

At the mid-market closing price of £0.935 per Sound Energy ordinary share on 17 February 2017, this would imply a market value of some £254.3mn. That’s roughly double the estimated value a month ago, whereas shares have risen in value by only roughly a quarter since January.

Mark Smedley