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We have got a 75% share in over $4billion of proven reserves. With x2 projects that will account for approx 50% of those reserves over 10 years. $16 million of tax claims don’t even touch the sides…..
Hi
I think it is actually $14m. And that claim appears to be at least 6 months behind this one. My felling is they are waiting for the outcome of this prior to delivering the initial outcome from arbitration. Then it will go to court and then appeal. So months and months away. By then we will be in production. But that is if all goes against us.
Let’s not forget who is in our corner ( our partners in country) and some of these have TAX claims as well.
ONHYM
OGIF (Morocco pension funds and bank)
Afruqua Gas (multi - international)
One of the largest banks in Morocco owned by the Royal Family.. funding Phase 2
Hi S123, yes Morocco has its share of Corruption. But it is improving. This will go from the local tax court to a higher court. The local tax court will follow the detail of the tax code and will not too pragmatic. The higher court should consider how the tax laws and and the exploration code work together. And that is where we will win out.
Good post Joe.
Let’s also remember that our major investor/partner took part in the placing last month at 2p. They are not selling. We where at 3.4 p a couple of months ago, since then we have announced a 300mln funding partner. Let’s wait for some of the expected news.
Hi Utility
We all know it will go to appeal. That’s going to be many months. I think it will be in our favour as GL would not commit more legal cost to a lost cause, he is too logical. Anyway we will spread the bill over maybe 10 years and not even notice we are paying it. We will soon take FID on a half a billion project to release 4 billion worth of gas to Morocco. I don’t think this TAX bill will really matter in the grand scheme……
As noted they will appeal this and this will take another 24 months. By the. We will be revenue producing and if (and that is a big if) we are still found liable for the 2.5 million then we will negotiate a long term payment plan maybe over 5 or even 10 years. So nothing to worry about.
SEME of approximately US$2.55 million.
Such a small amount that could be negotiated to be paid once we start to gain revenue over a period of 5 years or so. That will be approx 2 days of revenue.
At least we may have a reason for the oversold status.
Anyone like this for inflation busting investment?
Hi Utility
Yes agree the SP seems to be disconnected from current Value. But GL also does not understand why the SP dropped after the amazing news re the Phase 2 financial backing. I am not sure if PI understand the significance of this major banks commitment.
“ At the end of November, a British company Sound Energy and ONEE signed an agreement to supply natural gas from the Tendrara concession (east).
Sound Energy undertakes to produce and deliver to the country up to 350 million cubic metres of liquefied natural gas per year, over a ten-year period.”
We have a binding GSA with ONEE. So where Morocco get gas from in the short term are insignificant. I spoke to GL about this and it looks like we won’t only be supplying ONEE from the pipeline. Morocco want to utilise their own molecules.
We will be producing gas from the Horst for 20 years and exploration will eventually find all of the fields.
Hi
The reasearch note assumes that Sound keep 75% of the concession. Which as far as I could gather from the conversations that is the plan.
The farm down is discussed in the research note and at the AGM. They will farm down the exploration area to pay for the 3 well programme (not the concession).
We also discussed pre pay deals and vendor financing to cover the rest of the phase 2 costs. GL is very not to go to more dilution. I would imagine that pressure is coming from PI, OGIF and Africqua.
The Tax was thought to be not to be a material concern.
Yes agree with the numbers re how much potential we have with the exploration. Look at the multiple TCF they have discovered just across the border last week. The gas that we have in our reserves is only the very conservative start. This is a bargain….it’s just now a waiting game.
I discussed the following extract from the research note at the AGM.
“ Accordingly, in our financial forecasts we estimate that Sound Energy will be in a position to distribute 0.6p/sh in cash dividends per annum from 2025”
At today’s price that would be circa a 33% yield. If we say a conservative P/E of 15 that would also equate to a share price 9p.
This based on Phase 1 and 2 only. Absolutely zero for the largest license area in Morocco. Zero for Sidi.
And we are 25% lower than the recent raise….this raise was taken up by afriquia gaz. They are slowly increasing their percentage shareholding….I would not be surprised if they soon start to look like a potential suitor for the the whole company. They have plenty of resources.
Just goes to show how much gas there is in the area of North Africa.
28th June 2022
State-owned Sonatrach says find lies close to Hassi R’Mel complex and will start producing within five months
Sonatrach, Algeria’s state-owned hydrocarbon player, has unveiled a massive new gas discovery in the Sahara Desert that could house as much as 12 trillion cubic feet of reserves and ranks as the country’s biggest find in the last 20 years.
https://www.soundenergyplc.com/media/hesmwya3/agm-presentation-june-2022.pdf
They have 3 sites M5, TE4 and SBK 1
They have put these together as campaign and will farm out. As I understood it, if done correctly this will not incur any costs to Sound. They have various options to tempt big players into the fold.
SBK and TE4 has undone a lot of analysis and seem to be appraisal wells, pretty sure they will flow. They will be drilled in a different location to current wells.
M5 is now thought to be a gas play (was considered an oil play at one time). This structure is massive compared to the TE5 Horst.
They maintain that the source rocks are in place and they just need to find the sweet spots. They are still very confident in the mutli TCF potential of the eastern Morocco..
Sidi Mok - they appear to plan to farm down for free carry on seismic. And they have customers for gas.
They know they have license commitments prior to year end in both locations. And they did not appear to give any concerns about that time line. Take of that what you will….
So much information and some given in one to one chats that I am not comfortable putting on BB. As some of the chats where open to interpretation, so I will not post conjecture.
Anyway, I am more positive after the meeting.
Hi mebo
Sorry did not get a chance to meet up IRL. Did you get a chance to speak one to one with the Sound team? I found it enlightening, especially some of the extra understanding we have concerning exploration.