Member Info for AussieRidge

Question from Mthane

What is the plan to develop the Sidi Mokhtar licence ?

Brian Mitchener (Exploration Director)

As we previously announced, we have been undertaking a farm-down exercise ahead of a potential seismic acquisition campaign, which is part of a phased approach through which we hope to unlock the exploration potential of the Sidi Mokhtar licences. We have also recently completed an EIA on the licence in readiness for the potential seismic acquisition campaign.

Question from emailedquestions

How much of the upfront cash component of the agreement (55% of $54.3m – approx. £23.23m) does the company envisage retaining after the payment of fees and expenses related to the deal? Will the remaining funds be earmarked for repayment of the outstanding debts, as was previously outlined by management? Given that the outstanding debt is currently larger than the proposed upfront cash component of the agreement, will the company need to raised capital in order to remain a going concern, and to participate in any exploration program that were to occur prior to FID and First Gas?

Garry Dempster (VP Finance & Commercial)

Good question. If transaction is done, we will revert back to you on due course on this matter. The Board will study different possible scenarios (including distribution of a part of the cash proceeds to the shareholders).

Did Brian sidestep the Schlum question there?

Question from Thorough

Do we have any indication of the kind of exploration drilling programme that we are to follow. This programme seems to be key rationale for the deal but as yet, we have no idea on what could be a way forward. Are Schulmberger expected to be involved going ahead in this programme?

Brian Mitchener (Exploration Director)

I hope that some of the previous answers have provided clarity around our thinking. We have multiple near term drill ready prospects including SBK, Chiron and M5. We believe that further drilling is required to unlock the basin potential and the team are very focused maturing our plans.

Question from Mthane

Why is our future involvement with Eastern Morocco described as being as a synthetic involvement?

Mohammed Seghiri (Interim CEO)

It is intended that Sound’s retained share is secured via contracts with the JV rather than direct licence ownership, hence synthetic.

Question from ingson

Has the Tendrara land which Sound Energy obtained from OGIF in exchange for 29.9% of the company been of any use of value to the company? Were Sound Energy wrong to do that deal?

Mohammed Seghiri (Interim CEO)

The OGIF deal was critical to the company to secure in country partners and also increase our percentage in all our Eastern Morocco licences, including the concession.

Is losing the CEO,CFO and chairman embarrassing for Sound Energy? Is it not a reflection of lack of trust in the company?

Mohammed Seghiri (Interim CEO)

The CEO's plans to exit has been telegraphed for over 18 months via RNSs. The Chairman was an unexpected health issue.

Question from Ash

Is there a prospect of a farm out and free carry at Sidi Moktar?

Mohammed Seghiri (Interim CEO)

We keep working on Sidi Mokhtar to deliver our work commitments. We have just received a formal EIA approval from the local authorities. We are making a market enquiry to select the best contractor to acquire 2D Seismic. In the meantime, we have engaged a selective and competitive process to bring a farminee. We are not allowed to disclose anything and we will do it in due course.

Question from DavidLane

We are moving through an energy transition it appears that many investors now view oil & gas E&P companies as toxic investment - how do you view the appetite of investors??

Brian Mitchener (Exploration Director)

One of the reasons we have remained gas focussed as a company is that gas is very much viewed as a transition fuel. So while oil and gas have lost favour amongst some investors we feel that there is a preference for gas over oil.

Is the plan to relinquish Sidi Moktar. Why has nothing meaning been done with it? Is it still a back up plan in the event of Eastern Morocco failure?

Mohammed Seghiri (Interim CEO)

No, we keep working on Sidi Mokhtar. There is no plan to drop Sidi Mokhtar.

Is Mohammed Seghri the correct person to be CEO at the moment, whether temporary or not? Is his link to OGIF not a conflict of interests? Are there now two classes of shareholder in Sound Energy? Are shareholders being let down by all directors, whether staying or going?

Fred Lacuha (General Counsel)

Mr Seghiri is not employed by either OGIF or AFG, the investment bank which manages the private equity fund. He is the ex manager of OGIF and obviously has strong relationships to our cornerstone investor which should serve as a positive. As with every director when a conflict of interest is identified it is flagged and the conflicted director does not play a part in that decision.

Will this deal give us the funds to properly explore the Tendrara basin?

Garry Dempster (VP Finance & Commercial)

The intent of this deal is indeed to fund the development and exploration at Tendrara.

What information would be used to decide the next drill location? How much confidence is there in the seismic we have for Tendrara?

Brian Mitchener (Exploration Director)

We have a combination of better quality new seismic and older vintage seismic (but reprocessed) which will be critical to enable the unlocking of the basin with new wells.

Is Marco Fumagalli the correct person to be the chairman of Sound Energy at the present time? Is there not a conflict of interest when he is connected to the bonds/debt and would be interested in passing the "agreement" solely for the purpose of attaining cash to pay off the debt? Is this not putting the integrity of all other directors at risk? Is there not a dereliction of duty on the part of all directors, staying or leaving?

Mohammed Seghiri (Interim CEO)

Marco is interim chairman while a suitable replacement for Simon is found.

When can OGIF increase its stake in Sound Energy if it chose to do so?

Mohammed Seghiri (Interim CEO)

OGIF like any shareholder can buy or sell shares as it chooses.

Why can’t the payment be paid as dividends to shareholders?

Mohammed Seghiri (Interim CEO)

This is a possible outcome but the Board will decide on this nearer the time. Right now we are focused on securing the deal and then getting it approved.

At what stage does Onhym start paying its 25% of costs? Would it be before first gas?

Garry Dempster (VP Finance & Commercial)

ONHYM has to pay its share of concession costs from the point of concession award. So they are already required to pay their share.

Will any of the money payable in the proposed deal be paid to shareholders ? If so, when will this be paid and how much per share?

Garry Dempster (VP Finance & Commercial)

It is an option. The Board will address it once the deal is closed.

It took him 5 minutes to type that...

Sidi has sat silently for some time have we got any interest in a farm in from any parties ?

Brian Mitchener (Exploration Director)

I hope that John's previous answer on Sidi Moktar has helped. We are continuing to engage with potential farm-out candidates and we will provide an update when we are able. We are maintaining this as a competitive process and it would not be appropriate to disclosure further information at this time.