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In addition, in order to limit its dependence on Algerian gas, Morocco has already put in place a national liquefied natural gas plan based on three pillars: the construction of an LNG terminal (storage and regasification), transformation of gas into electricity (Gas to power) and gas supply to industry (Gas to industry).

Likewise, gas discoveries, even in small quantities, can reduce the impact of a non-renewal of the gas pipeline contract between Algeria and Morocco. In addition to Tendrara gas, which can meet 9% of the Kingdom’s needs, other discoveries have been made in recent years and should help limit Morocco’s dependence on the gas pipeline.

https://news.in-24.com/world/11511.html

Lots of buys. Another tick up coming?

We have a £13 million pound loan about to be signed off.

Finals for 2020 today from Sound where the transition is starting to become pretty noticeable under Chairman Graham Lyon. Progress has been made on the gas development / monetisation strategy at Tendrara which is most important. This is has been illustrated by the following events.

Advancement of Phase 1 Micro LNG engineering and commercial gas sales contracts, and micro LNG Development Heads of Terms signed in June 2020 to partner with Afriquia Gaz, an established gas distributor and marketer. A 10 year Take or Pay Gas Purchase and Financing structure developed with Afriquia Gaz and a letter of exclusivity signed with Italfluid in December 2020, an EPC contractor providing Lease to Own structure.

Phase 2 pipeline development commercial and planning activities undertaken as well as Phase 2 Tendrara TE-5 Horst Development EIA approvals for 120-kilometre 20-inch pipeline and gas treatment plant/compression station received in January 2020 and March 2020 respectively.

In addition there was a successful renegotiation of the terms of the Anoual exploration permit in July 2020 and the company obtained a two-year extension of the Sidi Moktar exploration permit in October 2020.

Before investors forget it, Sound remains largest onshore licence holder in Morocco with significant exploration potential for scalable growth. The company has also under the new management worked very hard on streamlining the company to match its new asset base.

It successfully implemented major cost savings with continued focus on disciplined cost and cash management, this led to a structural reduction in administrative expenses by 52% compared with 2019.

Equity placings to raise an aggregate of £4.6 million after costs completed in January 2020 and August 2020 at a weighted average price of c.2.1 pence per ordinary share was followed this year by a post period end successful restructuring of €28.8 million corporate loan notes in April 2021.

Finally, Sound is ticking the sustainable business model box with ESG principles at its core, with gas as a transition fuel providing a key element in Morocco’s Energy policy for secure, affordable and sustainable energy replacing imported alternatives.

Someone may drilling in tendrara next year, if we get bought out.

Some buys going through.

And the infamous 1 trade has been spotted. Maybe so long awaited news is on the horizon.

Our Sum-Of-The-Parts (SOTP) valuation of Sound infers a Core Target Valuation of 6.5p/share (c.£95m mkt cap.) and a Total Risked Company Valuation of 32.8p/share (£480m mkt cap.) demonstrating that the Company currently trades at a deep discount to NPV. We highlight that our prudent approach to our Target Valuation at this stage does not include recognition of its potentially transformational exploration portfolio at Greater Tendrara, Anoual, and Sidi Mokhtar, instead focusing on the near-term cash flow potential at Tendrara.

We initiate coverage with a BUY rating setting a 6.5p/share TP
In our view, Sound’s current share price represents an attractive entry point for investors as the Company gears up for Phase I of the transformational monetisation of its flagship Tendrara gas play. The new leadership team has successfully transitioned the Company’s strategy away from prioritising high-impact, high-risk exploration to early commercialisation which will see Sound generate revenues of c.US$60m in FY23 and US$73m in FY24 though its proposed phased approach. In addition, Sound has an attractive portfolio of prospects and leads in close proximity to Tendrara and Southern Morocco which are compelling areas of development in our view. On this basis, we initiate coverage with a BUY recommendation and 6.5p/share Target Price, also calculating a 32.8p/share Total Risked Company valuation.

From the echo board and a very good summary

Holdings RNS today is very much a technical requirement only, not a change as such. One of the NEDs was a 25% holds in an investment vehicle (Nusakan) that is realising.....Think of this as the holding being re-registered - the name on the Echo's share register changes......

Several companies have been involved in the this including ECHO.

For Sound it is a tiny amount of shares. The one thing to notice is addition to this is Marco via his investment companies has never sold any shares and remains a non exce.

Also OGIF our Moroccan pension fund holder has never sold a single share either.

All very positive

Just done a very quick calculation and after Sound has paid the Lease cost. This is worth deal on its own is worth 1.4p per share every year

If sound pay off the debt, bond and tax over the first 5 years this goes down to app .8p per share.

and then following 5 years it is over 1.4p per share per year.

And this is just brief calculation based on phase 1 with Sound acting as a shell company. If phase 2 gets going then we are looking at many multiples of this.

If we add to this a free carry with Sidi Moktar, you can see why we may become a target for a buyout.

The ship is now steadied and very much aligned to the Moroccan government long term energy plans

I thought that was a carry on film, not monty python?

I can Kenneth Williams in my mind......

I think we are in for series of positive RNS.

We negotiated the previous deal when the bond was not sorted. That deal needed to be in place to get the bond through.

The provisional has done its job, now its time to see what GL can do about renegotiating.
Also we will own the plant at the end of the lease. The bond will be paid off quickly it is then Gravy from there.

You also have to ask why the Bond deal has the clause that allows repayment of the whole bond at 70% of Par. That is for preparation of selling all of the assets and a significant dividend return to share holders.

This is all without consideration of farm ins for the rest of the massive acreage of eastern Morocco or sidi moktar.

Plenty of news to come

Price down before good news on Monday.

I think we are renegotiating the deal with the offtaker to get a better deal regarding the 13 million loan.

Or we now could be in process of selling all of the assets to either the offtaker or someone else.

What’s for sure, is that with the bond sorted its all good from here

https://northafricapost.com/49521-sound-energy-to-supply-9-of-moroccos-gas-needs-local-media.html

https://translate.google.co.uk/translate?hl=en&sl=fr&u=https://www.bladi.net/gaz-naturel-sound-energy-maroc,82398.html&prev=search&pto=aue

I think that after the bond deal GL is looking to get a better deal from the gas buyer.

“ with a view to seeking to reach agreement contemporaneous agreement in due course”

That’s from a recent RNS, contemporaneous is the key word.

Sound Energy aims to supply 9% of national consumption by 2025

https://translate.google.co.uk/translate?hl=en&sl=fr&u=https://www.medias24.com/2021/05/03/gaz-naturel-sound-energy-ambitionne-de-fournir-9-de-la-consommation-nationale-en-2025/&prev=search&pto=aue

https://www.oilreviewafrica.com/gas/gas/morocco-moves-closer-to-unlocking-domestic-gas-riches-says-globaldata