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Sorry Fernam
If it was as easy as that to get out of a TAX claim don’t you think that everyone would be making their companies Dormant. The RNS is clear and I spoke to the one of the presenters at the AGM and he confirmed the status as I have described. The initial presentation did mention approximately $3 million, but is was very clear that they appeared to be using semantics in the description of the tax liability.
It comes down to this. They Morocco tax authorities have specifically defined 2.5 million as a shortfall, which has been through Due process and is therefore is tangible. The Morocco tax authorities have also said that $14 million is a potential liability, but this charge is still going through Due process and therefore is not currently a tangible liability. This is the wording that has been used and is probably why we have some confusion.
It is not a very exciting read but if you go through each one of the RNS you can se the detail.
You can listen to the question to Mohammed about the tax contingencies of both subsidiaries, and his answer, from 42:38 in the video of the Q&A session.
Regards
Thanks Fernan.
Thanks Eric - that is a little misleading from them then.
The response I received from Sarah makes no sense then.
She confirmed it was only $2.55m but referred me to the RNS from 1/06/21.
In the Q&A session that took place on May 30, one of the managers (I think it was Mohammed Seghiri) said that, because SARL AU is a "dormant" subsidiary, its eventual tax liability will have no impact on SOU´s operations.
Regards
Hi Job
I asked the same question at the AGM and there is is an additional 14 million that is is Due process. I have clarified it again this week on email with the company and the same was confirmed. The additional 14 million is the initial Tax demand that was made in the first RNS many months ago. And this is the part of the latest RNS that covers it.
“ In addition to the Remaining SEME Charges, the Moroccan tax claims against Sound Energy Morocco SARL AU ("SEMS") related to the Tendrara Lakbir Exploration Permits and the transfer of Operatorship from SEMS to SEME (the "SEMS Claims") remain in due process. Under the SEMS Claims the Moroccan Tax Administration purports a so-called disposal for nil consideration of intangible assets by SEMS to SEME.”
It is not easy to follow but if you read each RNS on the tax issue you can see that we have a current potential charge of 16.5 million with the fine for late payment and interest since 2018.
I am happy to send the email that I received from the company this week. Just let me know.
I think it is best to get this clear now, because when the next claim comes I do not want to see a shock drop on the SP again. The tax bill is priced in and it is 16.5 million+.
"It is hard to understand the recent share sell-off and the current rock-bottom SP"
Entirely correct, i-man. The whole thing makes no sense, which is entirely in keeping with how this share has been performing for as long as I can remember. The share price a year or two ago (losing track of time as each year merges into the next) was about half of the current price, yet at that time there was a very real danger that Sound was on the brink of folding and going out with the meekest of whimpers.
So it's bizarre that the progress since then has only increased the share price by such a relatively modest amount, especially when the share price was around double today's price not too long ago - when there had been less progress, certainly, and direction about our future. Do not expect to be able to gain logical insights into the share price movement. Logic does not apply to this share. All that matters are states of excitement or despair, which themselves tend to emerge during periods of irrational sentiment when nobody knows what's going on and can only speculate.
Considering that the 25% tax waiver on ALL the gas production lasts for ten years from first gas from Te5, and then from any subsequent discoveries, this $2.5m tax demand seems trivial and a complete distraction from the real business of achieving FID for phase 2... ASAP, (which does appear to be progressing very well).
It is hard to understand the recent share sell-off and the current rock-bottom SP.
FYI - I’ve just had confirmation from the company that it is just the $2.55m that is the only potential tax liability.
There was a lot of discussion yesterday about there being more outstanding but it seems as though that is not the case.
We need that gas pumping ASAP.
Shell boss warns of grim winter ahead as Russia cuts off gas supplies https://www.thisismoney.co.uk/money/markets/article-11014783/Shell-boss-warns-grim-winter-ahead-Russia-cuts-gas-supplies.html?ito=native_share_article-top
Wonder how big the brown envelope was to JP from that old goat who said it a box of sand full of gas….bet that wancour rode off into the sunset a happy man!!
Quite literally double our market cap.
I think someone said that GL is hoping for a free carry on this one. There has been talk of a farm out for years now, I really hope the gas price is a catalyst for a bid....time is marching on...Sidi cost us a small fortune back in the day.
The Anoual drilling is included in the "drilling package" of 3 wells currently being offered to potential farm-in partners, together with 2 wells in the Tendrara license (SK-1 and TE-4, if my memory is good).
So far management hasn´t said a word about how are we going to accomplish with the minimum seismic contractual obligation in the Sidi license.
Regards
Wakeyinvestor not that we will ever meet but if we did and you would allow it i would shake your hand. You have my respect for your reply. Shame people like Joe Creed and KTF did not have the same strength of character to admit when they are wrong. He is now a mystic who knows i am not invested. Anyway i have no more to say on the subject of people with prejudices they have clearly shown themselves to be lowlifes.
This could also represent the reason for some of the fall in SP
Change of subject I think
So we need to get moving on Sidi. The initial period with extension up to 4 years and 6 months set from April 2018 is up in less than 12 weeks and we have to undertake 500km of 2D seismic to keep the license. Now of course we could get another extension and hopefully that is the plan. That will be news expected soon
Eastern Morocco Anoual permits
Initial Period of 5 years and 4 months from 8 September 2017: FTG-aerogradiometry and 600 kilometres of 2D seismic and 1 exploration well with Triassic objective (to be scheduled in 2022). So that gives us until the end of the year to get drilling. This permit has been extended twice already so I doubt we will get another go. So again news due here.
Wokes are so quick to anger. I can feel your blood boiling. Try and put your thoughts and energy into things that really matter, instead of looking for offence in everything!
Ok, so us holders are naive and doomed, why do you care? Haven’t got the balls to invest yourself?
Utility, you are right, the judgement hasn’t been published and I am (wrongly) speculating. I was going on what GL noted, I guess we all have to wait and see.
Utility, you clearly are not interested in Sound doing well so please go and haunt somewhere else. And English is the best language in the World, if you are going to use it please use it properly.......the Queen’s English :)
I am pretty sure that the RNS stated that the reasons for for the verdict were not disclosed. However, wakeyinvestor you seem to know the grounds that the decision was based on. They have misunderstood the facts. If it was not so insulting it would be laughable. Ever watched the show why does everyone hate the English. Sharetrader , KTF and now another know it all.
A few big trades at the end of the day but nothing large enough to to be institutions.
But the massive trades leading up to the AGM are now very suspicious given this news today.
And then there was the drop prior to the 2p fundraiser..
You have to admit that sound is still a very leaky company. And with that in mind we need to think about where the next news is coming from and how the trading days leading up to that news.
For me I am invested in the asset, but it is sometimes seems like Morocco does not want sound in the driving seat for Tendrara. Looking in detail at the additional SEMS tax claim for $14million that is in Due Process. We have been waiting for awhile for that, and PS could be right that this decision today was the trigger for a decision. But from the SP reaction today it looks more than likely it is priced in.
KTF - “it does not make me arrogant”
You are the epitome of arrogance. Time for ANOTHER top up?
I don’t think SOU are disagreeing with the Moroccan tax authorities about the tax law, it is the case that by misunderstanding the facts to which the Moroccan tax authorities are applying the facts, they (and the lower Courts) are reaching an incorrect conclusion. Provided an appeal is made and a full, clear and unambiguous presentation of the facts is made in a higher Court, the correct conclusion should be reached.
Do we really all think that the TAX authorities are going to be malicious and force our cornerstone investor OGIF to have worthless shares in Morocco gas future.
No of course not. Looking at the very worse case scenario of $16.5 million in charges. They will allow Sound to pay off over an elongated period of time. It will be a pain in the ar5e but it is fine. OGIF will also have to pay their TAX bill. That will not go down too well. Never mind the effect this will have on international investment.