Member Info for i-man

Another step in the right direction. Nearly all of the CPs fulfilled.

"Receipt of the written authorisation of the Foreign Exchange Office (Office des Changes) relating to Managem's payment obligations " should be just another formality. The only potential further hold up is the deal with Schlumberger and this now, thankfully, is out of Sound's hands and entirely Managem's problem. Hopefully, both these parties see the urgency in completing their deal. I'm sure GL is pushing them.

The end of a long dark tunnel can't be far away!

· Confirmation in writing by the Seller to the Buyer that no Material Adverse Change has occurred;

· Approval by Schlumberger in accordance with the terms of Schlumberger's profit-sharing deed in respect of the Concession or Managem negotiating and entering into an agreement with Schlumberger for the cancellation of the profit-sharing deed;

Good to see sale is agreed but worrying that Managem don't understand the difference between LNG and natural gas.

The July 2021 agreement was..."We are delighted to announce the signature of a binding ten year LNG sales agreement for the Phase 1 development covering the sale of not less than 100 million cubic metres of gas in a liquified form per year. ... Not 100m cubic maters of LNG, which is 60,000m cubic meters of gas. Hope Graham puts them right.. Shows Managem do need Sound!

It says that work is progressing, that Sound have completed their part in Phase1, but also that Rig 101 is now stored on Sound property and is ready for the M5 drill as soon as the deal is signed.

The big questions are, can Sound stay afloat until that time? Do Managem really want / need Sound as a 20% partner?

The storage tank is huge, hardly Micro LNG, and now appears to be progressing very well. We still own 75% of this!

Keep the faith!

Once rig 101 has completed its work on Te7, which is fairly minor, there will be two productive wells on the Te5 Horst. This will be more than enough to supply phase 1 and much of phase 2.

Rig 101 will then be free to drill M5 for which it is capable.

Artificial Intelligence!!

ChatGPT used the out-dated million million rather than a thousand million to define a billion!

Correcting that x1000 error still makes their (conservative) valuation of Sound's 20% ofTe5 alone as $271m, which is not bad considering the phase 1&2 capital costs are covered by Managem. We will, of course, have to contribute to 20% of running costs and interest payments.

The real value of sound rests with future drills, two of which, come free of charge to Sound.

0.9p per share!

Thinking that Sound's 20% of Te5 alone must be worth more than0.9p per share, I asked Chat GPT the following:

Regarding the Moroccan gasfield Te-5 horst ; what is the mid range estimate volume of gas resource and what would be the value in $ ?

ChatGPT replied...

"The TE-5 Horst gas field is part of the Tendrara project in Morocco. According to estimates by Sound Energy, the company developing the field, the mid-case (2C) contingent resource estimate for TE-5 Horst is around 377 billion cubic feet (Bcf) of gas.

To estimate the value of this gas resource, we can use the average market price for natural gas. Natural gas prices can vary significantly, but for a rough estimate, we'll use a mid-range price of $3.50 per million British thermal units (MMBtu). There are approximately 1,028 MMBtu in 1 million cubic feet (MMcf) of natural gas.

Here's a step-by-step calculation:

Convert Bcf to MMBtu:

1 Bcf = 1,000,000 MMcf

1 MMcf ≈ 1,028 MMBtu

Therefore, 377 Bcf = 377,000,000 MMcf

377,000,000 MMcf × 1,028 MMBtu/MMcf ≈ 387,556,000,000 MMBtu

Calculate the value of the gas:

If the average price is $3.50 per MMBtu:

387,556,000,000 MMBtu × $3.50/MMBtu ≈ $1,356,446,000,000

So, the mid-range estimate for the value of the gas resource at the TE-5 Horst gas field would be approximately $1.36 trillion.

This is a simplified calculation and actual values could be different based on several factors such as extraction costs, gas market price fluctuations, and operational efficiencies."

20% of that is $271,293m.

27.5% ...SBK? Anoual? Te4?

.......75% Sidi?

If Sound is getting excited about extending the Anoual permit to Jan 7th next, this suggests drilling M5 has to commence before then.

The structure is bigger and more than 4x the thickness of the Te5 Horst…our 27.5%…SP just 4P ?? All exploration expenses paid!

Odds are good but…Could be a duster. No guarantees in this game

SBK has higher COS

Graham was very clear that the Calvalley deal fell through because Calvalley were dragging their feet. They appeared to consider Sound’s hand to be weaker than it was and were unaware that other parties were very interested. They were delaying and pushing Sound to accept much less favourable terms.

The Managem agreement is fixed and secure, although, at first sight, would seem significantly worse than the Calvalley offer, it has significant benefits. When the Managem deal is signed, Sound will be very greatly de-risked.

Managem have agreed to cover the deferred Tax payments. They are completely covering the Schlumberger future payments, which effectively adds another 8-10% onto the agreed Sound’s 20% portion of the Tendrara concession.

Managem will take over their portion of Sound’s past payments into Phase 1 and 2, giving this $12m cash to Sound on completion of the deal. They will also pay all of Sound’s future payments into Phase 2. Sound does not have to come with any further cash for completion of the pipeline and phase 2.

What is really attractive with the Managem deal, is that the two exploration drills at SBK and M5 will be fully funded by Managem and if successful Sound will benefit from 27.5% of any future revenues from either or both fields, without having to make any payment to the exploratory drills .

John Argent was particularly excited about the M5 Anoual drill, explaining, that, by no means assured, there was a high chance of success and the size and configuration of the potential resource was significant. The thickness of the potential gas bearing strata is 400 meters, compared with just 65 at the Te5 horst. The 101 rig, which is available and is already on site at Te7 is capable of the M5 drill but not SBK as it is deeper.

Gary Dempster put my mind to rest regarding the Euro Bond repayment. Now that Sound will have cash in hand and is in a much stronger position with future revenues, he is looking forward to early repayment of the existing bond and renegotiating a smaller bond on much more favourable terms.

Exciting times!

The C2 contingent resource of Te-5 horst is 377 Bcf which at a market price of $2.5 to $8 per MMBtu puts a conservative value at $0.98 Billion to $3.13 Billion. We currently have rights to 75% of that.

Afriquia Gaz has agreed to buy LNG from 100m cuM of gas per year, equivalent to 4 Bcf, ( which is just less than 1% of the Te5 horst total resource) at the agreed price of $6 to $8.3 /MMBtu. This will generate a total revenue of about $25m - $35m per year. Of that, Italfluid will take just under $14m per year for the first five years. Our 75% leaves us with $7.5m - $15m, would go some way to settling debts and with some juggling, could even fund Te4.

Phase I is just scratching the surface of huge resource. If Te4 is successful it would significantly increase the resource and make the 120km pipeline a foregone conclusion.

It might not be a disaster if the Calvalley deal in its present form were to fall through. I am uncomfortable about the idea of handing Calvalley 53% of our share for relatively little. I am sure Graham is still working hard on this and does have the interest of shareholders in mind. Our hand gets stronger as the prospect of Phase 1 revenue gets closer.

Could Afriquia Gaz or a Moroccan investor come to the rescue of Phase 2?

The period of exclusivity long expired. Is there any chance that another interested party has turned up with a better offer than Calvalley’s taking 53% of our company? That would be worth waiting for!

Thanks Ducati

I was trying to suggest that the decision to drill the new Te4 well is relatively simple and could be viewed as a separate, straight-forward single well Farm-Out, that is not necessarily integral to the highly complex, time consuming and expensive Phase2 project, which will go ahead irrespective of Te4 success or failure, but might and probably will, take many more months to agree.

When the decision to proceed with Te4 is made it confirms Sound's continuing exploration intent and the SP would be lifted even if the well is not highly productive, if it is (and there is already a high chance of success), then the massive investment into Phase2 will be much more secure, as will our share price.

The location and costs of the drill are known and the Te4 decision to proceed could and should be made as soon as possible, as a separate agreement independent of the greater Phase2 contract.

I would be good if the pace was a lot quicker! I would be much more assured, if those pictures were taken in Tendrara rather than in Canada! It would be even better to see the plant being constructed on site. First revenue still so far away but at last, there is now light at the end of the tunnel!

I hope Graham is considering making the new Te4 well a horizontal drill the same as Te6 & 7, as the presence of gas in this horst has already been confirmed by the first Te4 drill. That would surely increase the Chance of Success to greater than 36%. Another duster would not be good.

Surely we don't have to wait for every i to be dotted and T crossed with Calvalley, regarding Phase2, before an agreement can be made to drill the new Te4 ?

Graham was very clear that as soon as Calvalley sign the new Te4 well will be started , possibly spudded before year end? They are all very keen to get further exploration and drilling underway. So positive announcement of signing will be followed by announcement of drilling. All moving in the right direction.

COS 36%… probably more if horizontal drill.

5 km of pipeline doesn’t come cheap. This is not money that Sound has in its empty coffers so there continues to be very real outside interest in Tendrara. Hopefully the Calvalley deal is progressing .

This pipe is not just to fix a few plumbing problems.

Is it significant that 5km is about the same distance from the Te5 site to the proposed Te4 well?

It would be good to see genuine Phase 1 equipment arriving and being erected on site. Revenue still seems a very long way away !

More pictures of the wellhead are hopeful but minimal and still nothing showing any action regarding plant delivery or construction at the LNG site. Is Italfluid still able to get the LNG plant up and running so we can get some revenue?

Is there any evidence that phase 1 is progressing?

All has gone very quiet regarding LNG plant arriving on site and progress of construction. ??

Thanks for posting the Drone fly-by view of the site. All looks a bit sleepy! Misses where the main action is, with the completed tank and plant foundations, and could be quite old as nothing much has changed.

A good, but very dated view, as tank foundation work still in progress, can be had with the layered view on Google Maps. Map ref: 33.006584 -2.350379 ....eye in the sky!

I don’t have the calculations to hand but when the pipeline was first proposed, a 10 or 12 inch diameter was considered more than enough to handle the maximum Te5 Horst output. The Moroccan authorities have demanded a minimum 20 inch diameter because of anticipated future finds.

Double the diameter, quadruple the cross section area and more than quadruple the flow rate. Simple physics!

Roll on FID

I am sure you are absolutely right.

I am struggling to keep my hopes up

Just a little bit of positive news is needed. The silence is killing!

Ktf, thank you for your efforts to raise spirits! ... Ramping?

I would like explanation as to why, if all is so rosy, why is the SP so low and sells out-strip buys?

Deadlines keep passing and the company coffers are dry. We are sitting on a huge resource but still a long way from getting any of it to market. I can only hope that, as the deals with Attijariwafa and Calvalley are absolutely huge and Sound has only a tiny team, things are taking their time and there are no resources to update us with progress.

Any little bit of positive news would be more than welcome.