(Alliance News) - Sound Energy PLC on Wednesday said the Moroccan court has rejected its subsidiary's demand for a USD2.6 million annulment, in respect of the remaining charges against Sound Energy Morocco East Ltd from the Moroccan Tax Administration.
Shares in the Morocco-focused gas developer were down 11% to 1.34 pence each in London on Wednesday morning.
Back in August 2021, Sound Energy said the authorities had abandoned tax claims relating to the free acquisition of intangible assets between 2016 and 2018 after several Local Tax committee hearings.
The hearings found, as a claim had also been brought by the Moroccan Tax Administration against Sound Energy itself, taxing its subsidiary would be redundant.
However, the company noted that the committee had not dropped charges relating to the disposal of assets by its Moroccan subsidiary to Schlumberger in October 2018. Sound Energy said the 2018 disposal related to a new petroleum agreement for exploration at the Greater Tendrara licence area in north-east Morocco.
In September, Sound Energy said its subsidiary had filed to the Moroccan Court its challenge to the remaining charges.
On Wednesday, Sound Energy said it has been informed that the judge has rejected its demand for the annulment of the USD2.6 million tax charge.
The company added that it has not been provided with reasons for, or details of, the tribunal's decision.
However, Sound Energy said that once the reason for the decision is available, it will then consider what further steps it will take "including but not limited to lodging an appeal".
"The company remains of the strong opinion that the remaining SEME charges result from an incorrect interpretation by the Moroccan Tax Administration of the entry of the New Petroleum Agreement," it added.
In addition to the aforementioned charges, the Moroccan tax claims against Sound Energy Morocco related to the Tendrara Lakbir exploration permits and the transfer of operatorship from SEMS to SEME remain in due process.
Sound Energy Executive Chair Graham Lyon said: "It remains perplexing that the entry of a new petroleum agreement awarded by government agreement, with its own exploration work commitment negotiated with the State of Morocco and covering different geographic areas/time periods, can be purported to be a 'sale' of acreage previously surrendered to the government.
"Confusion has arisen due to a previous notification by the company on July 23, 2018, whereby an entrant into the Tendrara Lakbir licence was postulated. This transaction never occurred. The Greater Tendrara exploration licence is not the continuation of the Tendrara Lakbir exploration licence," Lyon added.
By Sophie Rose; sophierose@alliancenews.com
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Sound Energy (SOU)