(Alliance News) - Sound Energy PLC said on Tuesday that it had secured a 45 day binding period and a non-binding term sheet with Calvalley Petroleum Ltd in the Tendrara exploitation concession and the Grand Tendrara exploration permit in Morroco.
Shares in the London-based, Morocco-focused upstream gas company rose 7.2% to 1.89 pence in London on Tuesday morning.
Sound Energy said that the agreement will secure USD48 million funding of Sound Energy and Calvalley's phase 2 equity funded development costs for a partial divestment of a 40% working interest.
The agreement also means Calvalley will provide 100% funding of the TE-4 Horst well with a cap of USD7.0 million, funding of 40% share of phase 1 costs including approximately USD8.0million in back costs, and an advancement to Sound Energy of additional phase 1 and phase 2 costs.
Calvalley Petroleum is an oil and gas company operating in North Africa and the Middle East.
"We are very pleased to have entered into exclusivity and a term sheet with Calvalley, who have operations in the Middle East and are supported by a very large conglomerate," said Chair Graham Lyon.
"The companies will now work towards signing definitive transaction documentation which upon completion will enable the parties together to jointly progress to the final investment decision."
Sound Energy also announced that it had raised GBP4.0 million through convertible notes.
The company said that the proceeds will provide funds for the company to continue to execute phase 1 development of the Tendrara Production Concession.
By Will Neill, Alliance News reporter
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Sound Energy (SOU)