Petroleum Africa
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Monday, January 18, 2016
Sound Energy entered into a binding agreement with Maghreb Petroleum Exploration (MPE) for the purchase of MPE’s 25% working interest in three onshore gas permits located in Morocco, together the Sidi Moktar Licenses. The licenses cover 2,700 sq km in Morocco’s Essaouira Basin and contain a material existing gas discovery in the Lower Liassic (Kechoula).
To date, two wells have already been drilled at Kechoula and a near term extended well test is awaited prior to expected commercial production. Kechoula is close to existing infrastructure and has been estimated to have an unrisked mid case GOIP of 293 Bcf. The Sidi Moktar Licenses are also estimated to have significant Triassic exploration potential.
The 25% working interest being acquired by Sound Energy has the benefit of being carried until first gas on the Sidi Moktar Licenses, after that the company will be required to fund its pro rata proportion of costs.
In consideration for the acquisition, Sound Energy will, on completion of the acquisition, issue MPE with 21,764,706 new ordinary shares in the company and grant MPE a 1.6% net profit interest in any future cash flows from the Kechoula discovery.
The acquisition, which remains subject to conditions precedent including regulatory approvals, follows the company’s announcement of October 22, 2015, in which the company announced that it had entered into heads of terms with MPE (the “Heads of Terms”) in respect of an option to acquire MPE’s interest in the Sidi Moktar Licenses. The option structure was subsequently deemed unnecessary as, with the consent of the operator in the Sidi Moktar Licenses, the company was able to directly acquire MPE’s 25% interest and maintain the carry currently enjoyed by MPE.
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