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(Sharecast News) - Morocco-focussed upstream oil and gas company Sound Energy reported a group operating loss of £1.7m in its first half on Friday, narrowing from £4m in the first six months of the prior year.
The AIM-traded firm, which is pre-revenue, reported a 57% "structural reduction" in administrative expenses year-on-year for the six months ended 30 June, while total cash balances at period end were £4.2m.
An equity placing was undertaken to raise gross proceeds of £1.5m at 2p per ordinary share, completing in January.
The company said another equity placing was undertaken post-period end to successfully raise an additional £3.2m after costs, at 2.125p per ordinary share.
Its board said it was continuing its focus on "disciplined" cost and cash management.
Basic and diluted losses per share were 0.03p for the six months ended 30 June, down from 1.08p a year earlier.
On the operational front, Sound Energy noted the signing of a liquefied natural gas heads of terms with a "leading" Moroccan energy group during the period.
Approvals were received for the environmental impact assessments for the 120 kilometre 20 inch pipeline and gas treatment plant and compression station in January and March, respectively.
The board also confirmed the successful renegotiation of the terms of the Anoual exploration permit in July.
"Despite the challenging business environment brought on by the Covid-19 global pandemic and exacerbated in the oil and gas sector by a dispute between Russia and Saudi Arabia which led to an increase in supply just as demand was falling due to the economic impact of the pandemic, the first half of 2020 was an active and productive period for the company as it reset its strategy to transition towards becoming a cash-generating company with significant exploration potential," said executive chairman Graham Lyon.
"The period concluded with the announcement of a key milestone, that the company had entered into a heads of terms with, and granted exclusivity to, a Moroccan conglomerate, to provide partial financing for its phase 1 micro LNG project and for the purchase of the LNG produced from the TE-5 Horst under the first phase of development. In addition during, the company also received environmental impact assessment approval for the Tendrara Gas Export Pipeline and Central Processing Facility, whilst continuing to progress the finalisation of binding terms for the proposed gas sales agreement with Office National de l'Electricité et de l'Eau Potable for the second phase of development of the TE-5 Horst."
At 0828 BST, shares in Sound Energy were down 0.36% at 1.65p.
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