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Directors are prohibited from trading while in possession of inside information. Therefore, the fact that Lyon was allowed to buy suggests either: no undisclosed deal is currently at a stage that would make it inside information, or any discussions remain preliminary and not yet disclosable.

Sorry if that sounds obvious.

The director purchase nudges the probability of a successful outcome upward a little.

ONHYM is the Office National des Hydrocarbures et des Mines — Morocco’s state hydrocarbons authority. They’re the counterparty on all Moroccan exploration permits. They don’t just regulate; they typically hold a carried interest in any permit granted to a foreign company. The old narrative was simple: Sound can’t develop Sidi Moktar alone, so they’re trying to find a third-party company to farm in — i.e. pay some costs in exchange for a share of the asset.

What’s new is Majid’s exact phrasing: “we’re in discussions with ONHYM as to what ONHYM’s aspirations are for it.” That’s a subtle but meaningful shift. You don’t ask a regulator what their aspirations are for an asset if you’re just running a farm-out process. That language suggests a more fundamental conversation — possibly:

Speculation alert: Maybe ONHYM wants the permit back entirely, and Sound is negotiating what they get in return (cash, a stake elsewhere, a relinquishment fee). Or perhaps ONHYM wants to bring in a state-preferred partner rather than whoever Sound finds independently. Either way it seems there’s a quiet negotiated exit being structured. Any of those outcomes could generate a small cash return or at least clean closure — removing Sidi Moktar as an overhang on the story.

BV

Yes, 3.5p vs 2p provides a floor. Of course the price is at this level because the sale hasn’t closed yet (July 31 is targeted), this will then lead to shell status where AIM rule 15 applies and the cash burn commences. I think the share price will react positively once the sale completion is announced and the cash arrives, the share price will start to value SOU as a cash shell with $11m rather than a company that just sold its business. Beyond this we’re waiting for announcements about acquisitions in Aug/Nov I recon. The better the deal, the more the share price will react, but like I say, I expect something small that closes Rule 15 in the first instance. Beyond November with no announcement and investor mood will sour I think.

Oilpimp

So whats the new prize now then?

If you mean acquisition then we don't know, but I strongly suspect the board do. My guess, for what it's worth, would be two steps:

Step 1: Survive the clock

A small producing asset within the $11m cash envelope. Qualifies as a business under AIM rule 15 and stops the clock. Tunisia would be a good place to look. It's littered with exactly these - International majors and mid-caps have been shedding Mediterranean tail assets for years. Too small to move the needle for Shell, but substantial for a small cap. Low complexity, fast execution and AIM friendly.

Step 2 - The big one

This would lead to a larger, leveraged acquisition once the clock pressure is gone. A company making asset with production and development optionality. That's the i3e playbook - build the platform first, then swing big.

Majid could go all in on renewables, but I think deep down he's an O&G man; so I think that'll remain a tangential part of the business.

SH

The costs were broken down by the CFO in the meeting; a lot goes on listing fees, broker, NOMAD, office, staff. It’s misleading and unfair to suggest it all goes on wages.

My takeaway from the meeting is that the transition now feels much more operational than conceptual. Majid spent a lot of time explaining why the old balance sheet had to die, and the PDF repeatedly returns to the same themes: Net liabilities, Excessive debt, Refinancing constraints, Inability to access growth capital, M&A counterparties being put off by leverage. Management are trying to draw a line under all of this; they want investors to stop valuing SOU as a delayed Moroccan gas developer and start valuing it as a debt-free acquisition vehicle.

Slide 7 maps out exactly what they’re after: Cash generating, Existing infrastructure. Stable production, Near-term cash flow, Scalable, Mediterranean Rim focused, Limited operational complexity. It sounds like they have already been looking at assets for some time and have a fairly clear shopping list.

Although this was a tricky meeting for the board (shareholders nursing losses), Majid managed to remain confident. Normally management teams become vague when they don’t yet have a target. The language at the meeting wasn’t vague. I think it’s fair to say they have an identified pipeline of strategic acquisition opportunities and repeatedly refer to acquisition-led growth.

In the Q&A my question was about SOU’s AIM listing being an asset (with $11m cash kicker) and whether anyone contacted them to discuss an RTO. The response was that they are receiving calls including from banks and brokers. This is what elevates the “identified pipeline” language from the PDF into something tangible. Majid didn’t say “we’re looking at the market” — he said people have been in touch. Banks and brokers don’t make introductory calls to cash shells on spec unless they have a vendor or a structure already in mind. This is deal origination in progress.

“The reason AIM energy companies go to the wall is too much debt” — and then he implied that assets brought in by SOU must pay their way. This is Majid explicitly articulating a self-financing acquisition model. What it means in practice: SOU’s $11m cash is a deposit and a credibility token, not the total firepower. Project finance or asset-backed debt layered on top — secured against cash flows from the asset itself — means they could realistically control something worth $40-80m+ for an equity cheque of $10-15m. That’s the i3 Energy playbook: use the AIM listing + modest equity capital + leverage to control assets you couldn’t otherwise afford.

The key constraint he’s set himself: the asset must generate enough free cash flow to service the acquisition debt. That filters out exploration risk — you’re looking at producing or near-producing assets only. Exactly what the PDF said.

In sum, the restructuring phase is essentially complete. The acquisition phase has already started behind closed doors.

BV

The SP has been edging higher recently. In my view, this reflects the market starting to reassess the “cash shell discount” currently applied to SOU.

Once the Tendrara sale completes and the cash lands (expected by 31 July), SOU will have six months to complete a qualifying acquisition before suspension under AIM Rule 15. That uncertainty explains the discount, but management’s recent comments suggest the board is already well advanced in considering its options.

In both recent Q&As, Majid has emphasised the experience of the team, the depth of their industry contacts and the clear criteria for any acquisition: cash-generative assets with development upside, focused on the Mediterranean region and Africa. To me, that suggests the board is not starting from scratch and likely already has a list of potential targets.

It’s also possible that opportunities which were previously unattractive due to SOU’s debt burden may now be back on the table. A debt-free balance sheet with cash gives the company far more flexibility than it has had in recent years.

Another important point is Tayra. Management has stated that the solar JV may qualify as an AIM Rule 15 asset. If so, it could remove the immediate cash shell deadline, giving the board more time to select the right acquisition rather than rushing into one. That would materially reduce investor risk.

Majid has also said he hopes to update the market on acquisitions “very soon”. Of course that doesn’t guarantee a deal, but it would be a strange comment to make if discussions were at a very early stage.

In short, the cash shell discount assumes management will sit on the cash while the clock ticks down. The board’s recent messaging suggests the opposite: a clear intention to move quickly and rebuild the company around cash-generative assets.

As for what they might buy, my guess is that an initial acquisition could be a relatively small cash-generative Moroccan solar asset, funded from existing resources. The market may not love it initially, but it could provide income and potentially satisfy AIM requirements. Beyond that, I would not rule out a larger acquisition, merger or reverse takeover. SOU’s AIM listing is itself a valuable asset, and a private company could potentially reverse into SOU while gaining access to both the listing and the cash balance.

For now it’s speculation, but I think the market is slowly beginning to price in the possibility that SOU’s future is worth more than a simple cash shell valuation.

Don’t forget the AGM on Monday via IMC webcast. You can submit a questions. I’m not sure if the webcast is the AGM or a post AGM Q&A.

Bp or not 2p

Also been out for a while and missed the move up. I’m not thinking of buying back in in any size (if at all) but watching. A fairly objective view then. First, I’m surprised the shareprice didn’t react more to Iran. Second, even if things go back to normal on the straight of Hormuz, it will take months for the oil market to normalise. So why is the shareprice reacting so negatively. Third, the recent boost in oil prices must have had a positive effect on HBR debt, again, why the drop.

Trying to be objective, but the reversal of sentiment here shows no sign of slowing and I can see sub £2 - though I know I’ll be hated for saying it. But as you can see from my comments, the drop makes no sense.

RS:

No, not a board member, an investor with a very cheaply procured 0.5% of SOU in my play portfolio. I haven’t been through all the nonsense with Parsons, if I had, I might be bitter too (which is understandable). Majid took on a mess and did his best to turn the balance sheet around, but it didn’t work out. When the cliff edge came into sight he pivoted sharply to save the company from liquidation. I think it’s a shame he’s being cast as the villain.

Majid is a shrewd and proven dealmaker (previously with i3e). He now gets to ‘choose’ the direction of the company regarding future acquisitions. It’s essentially a new company with a CEO who, at last, has the chains and shackles removed from the mess he inherited- and can show what he can do. I’m optimistic about the future, and looking forward to future updates.

Voted carried with a few disgruntled investors, but it’s comfortably passed. Majid has some work to do to sell his vision of a new company at the AGM. All eyes on completion at the end of July.

Hopefully it’s only a rare turkey that votes for Christmas; cos a no vote will take us into administration. On the positive side, the noteholders voted for restructuring by 96% destitute a savage haircut and I can’t find Mr Vinogradov‘a quote anywhere online (apart from the LSE post). The source isn’t mention by the poster, so I’m ignoring it. Incidentally there’s been some buying recently and at the current low price £40k gets you 1% of the company. I doubt new buyers will be voting against.

Considering likely acquisition characteristics (loosely based on what Majid has said).

1/ Private company (RTO)

2/ Existing EBITDA,

3/ Energy infrastructure,

4/ African or Middle Eastern connection,

5/ Existing relationship with SOU directors (perhaps)

6/ Producing oil and gas; or renewable asset.

BUT,

probably not an early stage exploration asset.

Worth noting that Majid mentioned about the deep experience and contacts of the board in the Q&A; he didn’t need to do that . It makes you think that something may have been lined up already. In fact Majid did say they’d put bids in for assets. I’m thinking once the sale clears they’ll move quite fast.

My feeling is that Majid would (for the first time) relish being able to purchase and progress assets of his own choosing rather than continue to play an average hand emptied of folding fodder.

Sidi Moktar has been a millstone — a legacy asset from the Parsons era that consumed capital, generated successive impairments (the £12.5m on top of the massive £122m SEME write-down), and never got properly drilled. Majid’s entire playbook with i3 Energy is acquiring and rapidly commercialising assets that are already in or near production. Sidi Moktar is the opposite: an exploration-stage permit with a contested guarantee claim, uncertain geology at depth, unmet work commitments, and a capital requirement to drill that would sit very awkwardly alongside an $11m net cash shell trying to execute an RTO or Mediterranean acquisition strategy.

Before the current transition SOU always looked like a company that was on the right track (baby) but going the wrong, wrong way.

So the probability of SOU extending and actively pursuing Sidi Moktar themselves is low IMV. The more likely outcome is either a negotiated settlement/relinquishment of the permit (possibly at a cost to resolve the ONHYM claim), or a farm-out/assignment to a third party as part of a tidying-up exercise before the RTO clock becomes the dominant priority. But I’m not sure how constrained they are on the decision.

All in my opinion - I’m still new here and reading in.

Retained assets are Sidi Mokhtar (impaired, uncertain), HyMaroc (speculative early-stage), and Tayra Energy (pre-revenue JV) . Tayra is the most likely to be near term cash generative. Majid Shafiq also has suggested that development of this solar project (scheduled to commence this month) should take SOU out of its cash shell status. First revenue in 6-9 months. No confirmation on progress so far, RNS could drop at any time potentially derisking the company’s development plan.

Since you haven't incurred a lost, I'm genuinely baffled as to why you're angry.

I think it’s fair to question how much cash ultimately remains after the transaction and whether future dilution may be required. That’s a legitimate part of the investment debate. Equally, dilution is not automatically negative (as I mentioned before) if it is used to secure or develop a genuinely cash-generative asset — in that case the key issue is simply whether value creation outweighs the reduction in ownership.

The real uncertainty sits in the execution and funding model going forward, for example:

1/ Can projects be funded at the project level?

2/ Can partners contribute capital?

3/ Will development rights be sold before construction?

4/ Or will shareholders need to provide additional funding?

At this stage, none of that is fully visible outside management, so dilution is a possible 'risk' — but not a foregone conclusion.

However, I don’t think it is reasonable to state as fact that management have “sold shareholders down the river” or acted improperly without clear supporting evidence.

Ericnat17

You are not wrong about the bond holders.

Sound is receiving US$57m.

It only needs around €17m to retire €28.8m of bonds.

Bondholders are effectively accepting a very substantial haircut.

Management expects to retain around US$11m cash afterwards.

That suggests shareholders are capturing a meaningful amount of value from the transaction.

Bondholders overwhelmingly backed the deal

€24.3m of the €28.8m notes were represented at the meeting.

96.3% voted in favour.

That level of support suggests the bondholders believe the restructuring is preferable to leaving the debt unchanged. When secured lenders vote by that margin, it usually means the proposal has been negotiated extensively beforehand and there are no obvious better alternatives.

I view this as a good deal for the shareholders, it's now down to the board to utilise the cash effectively to purchase cash generative assets.

Kylie, if you’ve lost out here I absolutely feel for you, I’ve been there myself. AIM shares can make you and break you. I am new here and think the board, especially the CEO and CFO, have integrity and tallent. I absolutely believe they did everything they could to rescue the company as it was, it just didn’t work out. With a clean balance sheet I’m hopeful but as always, high risk with these tiddlers.

Hi Kylie,

Shouting “equity dilution is coming!” always sounds like the opening scene of a corporate horror movie. But before we panic, let’s look at where that cash is actually going.

The Bad Kind of Fundraise: If we are funding fancy espresso machines and artisanal biscuits for the boardroom, yes, grab your pitchforks. That cash is burned, and your shares just shrank for nothing.

The Good Kind of Fundraise: If we use that money to buy another company, your slice of the pie might look smaller 'on paper', but the pie itself just tripled in size.

So yes, there may be a funding round (but I don't care if it goes on M&A - 'the good kind of fundraise'). Having said this, Majid emphasised how the clean balance sheet will make it easier to take on debt. Majid also emphasised buying 'cash generating' assets, so that the company starts to make profits straight away to pay down the debt and fund further development - this is how good businesses are built and it's straight out of MS's playbook (see the AI comments of MS performance at i3E).

I'm reflecting hard to make sure I'm being fair with these comments - I believe I am.

DrJ - I3Es share price decline was mainly due to macro issues:

In a nutshell, i3 Energy's share price collapsed because of crashing Canadian natural gas prices and operational disruptions—like wildfires and third-party facility closures—forced the company to slash its monthly dividend by 50%. Because the stock was primarily held by retail investors for its high-yield monthly income, this payout cut triggered a massive investor exodus that severely depressed its valuation. Ultimately, the London market failed to fairly price the true value of its robust Canadian reserves, leaving the company vulnerable to a knockdown takeover. I would add that the AIM market was by then exhibiting signs of breaking as institutional and private investors aggressively rotated to US tech and crypto amid a trend of ESG investing. These macro issues affected many stocks both within the energy sector and beyond.