Member Info for Exploration

moroccoknows I was getting tired of the nasty posts and decided about time to throw a brick into the pond to help the share price on its way to its ultimate destination. You are right about the Talsint affair. It happened in the first year of M6 being King. He went on TV to announce SBK1 results and the consequences were very embarrassing. As a result, Morocco lost a lot of credibility especially in Algiers who at that time were doing very well. This has not been forgotten and now neither Onhym or Minister is able to speculate about gas reserves. Then along comes Sound with super enthusiastic CEO and team able and prepared to advertise they are onto something big. So when JP talks up Sound he is also supporting our client Onhym and indirectly the Energy Minister and M6. It is part of the job and fundamental to our success and prosperity.

Mancave Quite a lot of this work by Morocco is what we call Masterly Inactivity. This is a phrase first used by the British in the 19th century to describe the strategy in the Great Game in central Asia. In other words create an impression that a lot is happening but in practice, nothing happens but it increases your strength. Same in Cold War when Ronald Reagan used the Star Wars threat which contributed to collapse of Soviet Union. Str Wars never happened but it put the wind up Gorbachov. So creating perception that Tendrara could methane capital of Morocco is the aim. So we are part of that and JP has to play the game. It terms of operator the arrival of Mr Clarkson to the BoD will provide someone who has "kicked steel" whereas our current team is focused on geology. The 20" and 28" discussion started when OGIF provided their non binding expression of interest. That triggered a wave of posts about diameter and JP basically said "the bigger the better". The 12" and 14" options are from Onhym ITT specifically for TE5 volumes. No big deal if this is too small. Its all part of Masterly Inactivity leading up to negotiations. LE? is anyones guess but I am sure M6 will provide the answer!

All, Now and again it helps to view our investment from outside the Sound bubble. By doing so you can see the boundaries of the information Sound is able to share. First of all, we are a contractor working for Onhym and bound by the confidentiality articles in the Exploration Agreement. Sound can show information to banks, institutional investors and third parties but only under strict non disclosure terms. For their part, Onhym is supporting the Ministry of Energy on national strategic issues associated with implementation of the new Gas Law, intergovernmental agreements for LNG supply and the renewal of the Algerian `GSA. If negotiators in Algiers, Moscow or US looked at some of the nonsense on this BB they would be laughing their socks off. Wisely, Onhym has contracted a French consultancy, probably Biecip Franlab to provide a CPR of the TE5 area for a conservative development of 60 mmscfd. That is a modest, achievable project but in oil equivalent terms is 10,000 boe per day + 2000 bbl/day of condensate. Onhym awarded the contract in November 2017 and it has been completed. The options are for either a 12 inch or 14 inch export pipeline. It is a credible project based on TE5 and includes multi stage fracs of 12 horizontal wells. Onhym need this CPR to back up their talks with Algeria and evidence there is a sales agreement for TE5 supported by a well financed, competent operator. Meanwhile, Onhym is keen to support Sounds efforts to find more gas which will be nice to have and underpin the Energy Ministers objectives. I I were energy minister I would instruct Onhym to play down publicity on volumetric estimates of yet to find in Tendrara which would allow me to arm wave about future potential. Its politics. I am a sizeable investor based on the geology but I know oil and gas is a very long term business with lots of zeros when it works. JPs valiant attempt to shorten the investment cycle time to a couple of years are to be applauded and he stands a reasonable chance of success. I encourage posters to look at our project through a wider angle lens which includes our clients interests. i.e. Morocco.

It�d In a word, no Onhym is planning 60 mmscfd which needs a pipeline. The micro LNG concept is an early production scheme to 1 get our money back and 2 make Sound self-financing. And yes, it�s a good idea and in my experience would get attention of markets.

Med111 You have a point. These micro lng plants are in business in US, China, South America usually supplying small power plants. Like in UK and most countries Distributed Power is the most cost effective way to keep the grid balanced. Conventional power stations, such as coal-fired, gas and nuclear powered plants, as well as hydroelectric dams and large-scale solar power stations, are centralized and often require electric energy to be transmitted over long distances. By contrast, Distributed generating systems are decentralized, modular and more flexible technologies, that are located close to the load they serve, albeit having capacities of only 10 megawatts (MW) or less. These systems can comprise multiple generation and storage components; in this instance they are referred to as hybrid power systems. Morocco is heading in that direction too. GE, Warsilla and Siemens are leaders in the field. Siemens has a big presence in Morocco with wind power plants and a new factory in Tangiers make 36m turbine blades. Siemens even has a finance subsidiary which takes care of everything downstream from the well-head with no cost to the gas producer. Just looks to me like Sound is a bit of a laggard compared to independent elsewhere, which harms its value.

Sounding off Fair comment. I agree biggest bang for buck comes from exploration provided it is successful! On other hand commercial production from 2 existing wells would be about 20 mmscfd and justify a 25 year concession. So the 377 bcf contingent resources become proven producing reserves which are much more valuable. Witness SDX. 20 mmscfd will generate 100 MW, so the scale is there if one does the sums.

Jack Levi Yes, trucks are the way to move the lng to point of use. Of course, the trucks run on lng, and so does the production plant and drilling rigs. The trucks have containerised cryogenic tanks and deliver the lng to the customer who just trades in his empty tank for a full one. This is normal way to move lng. A couple of Shell stations on M1 sell it to trucks today. I hope Sound is aware of this. Right now they are following Major company approach partly because their management have come from major companies. The independent sector should be much more innovative in my view. Waiting for wells and seismic is like watching paint dry.

It is about time Sound 1 started to think about making some money instead of spending our cash 2 differentiates itself from competitors including Shell 3 put TE6, TE7 and upcoming wells on production under long term test rules How? Micro LNG. In use in several countries. Can be done without capex by sharing revenues with equipment providers. Come on JJ. Get on with it instead of using major company approach. You are CFO of a cutting edge independent and should re-write the rules. See link below. http://www.dresser-rand.co.uk/products-solutions/systems-solutions/lngo-micro-scale-natural-gas-liquefaction-plant/

JoeCreed There will be plenty of condensate liquid too. Fastnet and Onhym have both mentioned about 35 bbl/mmscf of condensate from TE5 area. Thats about 1 million dollars per week at 70 dollars sales price For Onhyms conceptual development plan of 60 mmscfd that means field production of over 2000 bbl per day. Trouble is that how can it be marketed? It is too much to truck to a point of sale and too little to justify a dedicated pipeline. An engineering challenge which can be solved. But at a price.

Apcouldwell SDX success rate for commercial gas is 80%. If fact, out of 32 wells drilled in their contract area drilled by SDX, Circle and Onhym 25 out of 32 have found commercial gas so that's about 80% too. The rock physics works in favour of the seismic. Onhym drilled the early wells based on simple bright spots on 2D seismic. Circle tried 3D over the 2D bright spots with great results. SDX inherited the whole approach with the Circle acquisition. Circle also realised site prep in the soft ground was costing more than drilling and developed a quick, low cost approach to avoid b approach which avoided trucking tons of crushed stone.

Fellrunner Wh0sthedaddy asked similar question about His earlier today. Here is my answer if you missed it. wh0sthedaddy I think it works like this for Institutional Investors. Sound is able to show them the final or draft CPR which they need for usual due diligence. However, that would make them insiders and unable to deal. Insider trading is the trading of a public company stock or other securities by individuals with access to non public information about the company. So until the final CPR or whatever has been shown to Institutional Investors is made public they cannot invest/trade. Please correct me if I am wrong. It follows that Its might perceive huge untapped value and are waiting to pounce when final CPR is released. On the other hand release of final CPR might have neutral or negative effect. Time will tell.

wh0sthedaddy I think it works like this for Institutional Investors. Sound is able to show them the final CPR which they need for usual due diligence. However, that would make them insiders and unable to deal. Insider trading is the trading of a public company stock or other securities by individuals with access to non public information about the company. So until the final CPR or whatever has been shown to Institutional Investors is made public they cannot invest. Please correct me if I am wrong.

Sounding Off Thanks. That is good news since WesternGeco have huge capacity. I did not know that and stand corrected. Also, I understand Sound is using Echo Geoscience as consultants on interpretation etc. These are former Eon geoscientists familiar with the Southern North Sea around Babbage and the nearby gas fields where Rotliegendes and Carboniferous are productive. In other words, similar to Tendrara in broad terms.

Fellrunner By international standards Morocco is a breeze if you follow the rules and Onhym guidance. In fact as Moroccoknows has observed several times Onhym nudges Sound in the right direction now and again. Onhym also coordinates the work of other agencies such as police, security, environmental permits and so on. So when M Jaquety, Moroccos version of Pickfords, is asked to move a rig the roads are cleared and stuff happens. The systems and procedures involved in oil and gas JVs have developed over the years, but are needed to maintain alignment between all the parties.

Fellrunner On the query about seismic phases. Land seismic requires a lot of tender loving care in processing. Every geophone group and each shot on the seismic spread has static corrections to reduce the whole seismic line to a common datum. It is labour intensive and Sound is using a relatively small outfit called Shearwater to process Schlumbergers field data. All processing centres have to juggle priorities between different clients so there are losers and winners - it is a very stressful job! But BM has prioritised areas as we know, so what is the hold up? Well, we will learn this week but you can bet there has been a mighty discussion about predicting where the reservoir is most effective for TE9 some of which involves seismic and some involves good old fashioned petroleum geology based on wells and analogues. Beyond that Sound has to convince Onhym about the best technical location and may have been asked to provide alternatives based on latest seismic. Thereafter, that has to be endorsed by the Management Committee where the agreement must be unanimous according to the Petroleum Agreement. I dare say the tweet photo of the meeting in Rabat a couple of weeks ago. So Sound can set a general direction, but the exact locations and order of drilling prospects is a joint decision with Onhym and presumably Schlumberger. We should bear this in mind instead of twisting off as they say in drilling every time there is a small change in direction.

Moroccoknows I doubt he needs the money what with a final salary BP pension and his earnings at Bowleven which were 300,000 pounds per annum until he checked out. Mr Clarkson inherited the CEO job at Bowleven after their cornerstone investor and PIs voted out the previous CEO and his associates who had overpromised and underdelivered while paying themselves in region of 1 million pounds per year. Since that event Bowleven was voted out of Operatorship of its gas condensate project in Cameroon by JV partners and its failed exploration campaign terminated. Mr Clarkson was the only safe pair of hands left to look after the company after the clear out. Since then the Bowleven share price has recovered somewhat. Sound will benefit a lot from his appointment.

Doubler Yes - you are correct. You are onto a good thing with SDX. Onhym found the gas in the Hoot Formation 30 years ago and built the pipeline and gathering system to the tile factories. The 3D seismic approach developed by Circle has done well. As we say in oil/gas "pump while the pumping is good" with fantastic netback to SDX. By the time the gas to power project comes along SDX should be sunning themselves on a Caribbean beach!

mel111 Thanks Having read what Wrote it seems to me PIs in Sound sometimes cannot see the wood from the trees. To put it another way, there is an expression in the industry which says "Big oil moves" In other words, against all the odds, if you find enough oil engineers will figure out how to deliver it to a market. Same applies to gas. It may seem obvious, but this is what Sound is trying to achieve. Find lots of gas and leave it to experts to produce and sell it. So I am not too bothered about the forthcoming drilling programme. And Fellrunner has his speech lined up with pop corn and warm water at the Gherkin!

medal111 IN a word, Yes The agreement may not include a first gas date, ACQ, price escalation etc but it has to start somewhere. THE GSA should define the approximate production profile which engineers can reverse into the TE5 development. In a Thatcherite Utopia with a National Transmission Grid a gas field with no Proven Reserves, no production Concession, no Development Plan and no finance for development would not be bankable. Zero value. But this is Morocco which is an emerging gas market where all parties must create the rules and laws as they go along. Start small and adjust the terms as projects progress, especially if of strategic national importance. A good example is Shah deniz in Azerbaijan which BP firmly believed was going to be an oil field but when drilled was an 80 tcf gas field big enough to support a pipeline to Europe, Georgia and Turkey. So what. Moroccos state owned entities such as ONEE and Onhym, supported by the new gas law and the Gas to Power Project will agree some kind of interim Gas Sales Agreement for tendrara gas. The offer on the pipeline to Tendrara is just a non binding expression of interest to finance the pipeline which is pretty flimsy. Onhym has tendered for a CPR and commercial evaluation of a 12 well, 60 mmscfd project to develop the TE5 area so they appear to be leading the way on creating a project. 60 mmscfd is about 0.6 BCM per year. The LNG import project where Gazprom is a front runner, is 3.5 BCM per year. Pricewise, this means that the market power of LNG sets the gas price at about 7 dollars per mcf which is same as most NW Europe.

Fellrunner I thought I'd take a lead from jacklevi to add some humour to the discussion. Personally, I'm backing the geology. It is the one thing that has not changed since Onarep, Lone Star, Maghreb, OGIF, Fastnet or Sound tried to decode the puzzle. The more I look at it the more obvious it is that drilling fluid technology is the key. I'm sure Sound will address that. Trouble is that ignorance breeds suspicion, and lack of news generates the speculation we have seen in recent days.