Member Info for ps200306

"Down 99.8% ? 'Tis but a scratch" 🤣

What sale bonuses are you talking about Spencer? There's no mention of any such thing in RNS. Apart from schadenfreude what would you hope to achieve by delaying things? Your money is gone. SOU is close to bust. The debt free situation with a modicum of cash is the only deal on the table. If it helps you share the pain, the bondholders will be taking a 40% cut on their principal. (Not that I feel any sympathy for them -- they made a packet on the initial bond issuance which was at 30% below par value, and more in subsequent interest payments).

This mess has been a long time in the making. I think those blaming Managem are wide of the mark. I've mentioned it several times on here that I smelled a rat way back in November 2022 just six months into Phase 1 construction. An innocuous RNS mentioned a reduction in Italfluid operating costs and ownership by SOU of the LNG tank in return for an additional $6.5m of staged project payments. It seemed that Italfluid couldn't afford the LNG tank as part of their vendor financing.

I suspect there's a long story behind the Italfluid contract that hasn't been revealed to shareholders. The switch to an EPC contract last year seems an obvious bailout for Italfluid. They couldn't afford to wait to recoup their finance from LNG plant operations. Majid let slip at today's investor presentation that the so-called "supply chain problems" were not because of suppliers not delivering but because they weren't getting paid.

I doubt SOU had it's pick of robust and reputable suppliers vying to vendor finance the micro-LNG plant back in 2020. They took what they could get and it looks like they bought a turkey. That turkey has come home to roost with the final two years of delays basically ending SOU's Tendrara aspirations. My main gripe (which I provided as feedback to today's meeting) is that management continued with an unrealistically positive spin as the situation deteriorated.

Let's face it, the Hymaroc business is a still-born dud. Majid says it's low cost but he's not counting John Argent's salary. Sidi Moktar is likewise a dud. Both of those ventures are "low cost" until you have to actually do anything subsurface and then you are back into looking for the same deep-pocketed partners that SOU failed to attract in seven years of trying. SOU are too small a minnow to be in the E&P business. If they are to achieve anything they need to drop their delusions of grandeur and jettison that segment of the business including employee costs. I don't hold out much hope for Tayra either, but at this stage it's the only game in town.

Glad to see Graham didn't turn up and we won't have to see his useless mug again. Though I harbour a naughty wish to mail a giant inflatable ribbon-cutting scissors to Sound HQ with a request to forward them on to the ex-CEO.

If you look at Zeus's research note from December 2024 on completion of the Managem deal, the RISKED value of SOU's core assets was 2.3p, or 23p in new money. That was the value of Tendrara Phase 1&2, AFTER debt, with a 10% NPV discount, WITHOUT any further drilling upside, and allowing for project uncertainties. Basically that was supposed to be rock bottom valuation, with upside potential of four times that.

SOU now walks away from all that with a cash value of 4p per share (new money) after debt, and trading at 2.75p. The RNS puts the project's woes down to "broader industry inflationary pressures". That's pretty impressive inflation to make SOU's core assets worth 83% less than just 18 months ago.

This week marked the seventh anniversary of SOU's announcement of its plans to monetise its Moroccan assets. After all this time we finally know what the answer is. With the Moroccan assets gone, SOU will have less cash in the bank after this sale than it did seven years ago. Along the way it bilked investors for well over a billion newly issued shares and burned through all that cash. There's been no drilling and no first gas, no ribbon-cutting ceremony for poor old Graham to go to. I suspect with £2m+ in salary and bonuses he can probably live with that.

I've always maintained on here that, despite project setbacks, kylie's prognostications were too pessimistic. I'd like to hereby acknowledge that kylie was right all along.

Adam: "IF and its a big if.soundenergy have found some one who willing to farm in sidi moktar.then I believe its a great move."

🤡LOL. Sound Energy doesn't even have an extant exploration license for Sidi. And chances are they're not going to get one, which is why they recognised an impairment on it in their final results (which you obviously didn't read). In fact, ONHYM has made a claim of $1.5 million against SOU for failing to meet guarantees under the work program for Sidi. SOU will be doing very well if they can walk away from Sidi for free.

No news is bad news. That's clear from communications over the past year where SOU has waited until the 11th hour to announce further delays. If there was good news they'd be singing it from the rooftops. Back in March 2025 they told us that the gas gathering system would be complete in Q3 and first revenue (as well as drilling activities) by Q4. At the investor presentation in late Q3 they were still promising revenue in Q4 even though, as we later found out, the gas gathering was not only not complete at that stage, they didn't even have the parts for it. Those didn't arrive until late Q4, just before the announcement of another 3 months delay.

Just days before the end of the following quarter we got the announcement of yet another quarter delay due to parts unavailability. You'd have thought they'd have learned from the last fiasco about having to procure parts earlier. That's either incompetence or the lead time on the needed parts is unexpectedly measured in years, not months. Neither bodes well. We are now six weeks from the start of Q3. If the news blackout extends through the end of May then I'd wager that the next news will be the announcement of a further delay.

Project completion was already overdue when the Managem deal was announced and, unbelievably, we have limped through almost an additional TWO YEARS since then. That's already more than 100% over the time budget and we're not there yet. The scary thing is that Managem are showing no more signs of competence than SOU.

Drjenner, in broad brush strokes the gas in the TE-5 horst is worth two billion dollars. SOU's 20% share is worth $400m or $2/£1.50 per share. Subtract debt and discount for NPV and Zeus's estimated value of 20-25p/share looks more than sensible, with significant potential drilling upside. Even with the delays I believe that the SP would more than double just on the announcement that Phase 1 commissioning was complete and the LNG tank was being filled. That would still be cheap compared to Zeus's core NAV.

The problem is we have no clear information on when that's going to happen. "Early Q3" is two months away, surely enough time to get things in order? Not necessarily. The only thing we know is that there are "supply chain problems". That could mean anything from: "there were some delays but we have all the parts now and are completing commissioning", to: "we have no idea when, or if, the final parts are arriving".

SOU and Managem must know which of these (or something else) is the case. The lack of communication beyond the bare legal minimum is incredibly frustrating, especially given SOU's precarious financials. The silence is also deafening on Phase 2 and drilling progress. The outgoing CEO said not too long ago that he couldn't understand why the share price was so low. I'd have thought the reason should be staring him in the face (or maybe looking back at him from the mirror).

Yes Spencer, John121983's AI output quite obviously is not aware of the share consolidation. Had it do that to me before. So it says that "Broker NAV estimates (e.g. ~3.1p target) were based on this post-deal structure ... So the market already reflects a de-risked but smaller company." It thinks the current 4p is already better than the broker estimate. The rest of it is the usual anodyne AI slop in which it essentially tells you "a buyout price could be higher or it could be lower". Gee, thanks!

On your other questions, there is one million to be paid to SOU on completion of *Phase 2*, not Phase 1. So that pittance is years away. And yes, there were to be penalties if the carried drills were not done, but we were never given any parameters such as the date on which Managem would be considered to be in default.

As for finding and questioning the Managem project manager, good luck with that. SOU management at least have a fiduciary responsibility to shareholders to keep them informed of market sensitive events. Managem have no such responsibility to SOU shareholders, and no earthly reason why they should respond. SOU meanwhile have been economical with the truth (to put it mildly) over the past two years so if that is any guide then don't expect even the most basic information about where this project is really at. We could be a month away from first gas, or we could be years away. Somebody knows the likely answer but nobody's telling *us*. It's ironic that with both a new CEO and old CEO in place the news flow is worse than it's ever been. And it was never good to begin with.

A sobering thought: if Phase 1 construction had STARTED when the Managem deal was announced it would be now overdue. In fact it had been underway for nearly two and half years before that. No adequate excuses were ever given. One can only conclude that project management and execution has been a total disaster. It certainly has been for shareholders. Management are still getting paid.

Kylie: "Graham is nothing but a suited version of a pikey running a travelling fairground."

He's going to be there for the ribbon cutting at the opening ceremony. He told us himself, remember?

Waiting for commissioning is even more dreary than watching Artemis II's moon distance counter tick slowly downward. So I whiled away a few minutes asking ChatGPT which micro-LNG components are likely still missing. It says:

"The phrase 'final pieces of equipment' sounds like a small number of critical-path delivered items, not an entire subsystem. And because the project is already past gas gathering commissioning and tank testing, the remaining missing items are most logically the components that sit between treated gas and saleable LNG, or between stored LNG and truck loading. That is an inference from the project status and the standard equipment makeup of a micro-LNG plant."

"Most likely: Refrigeration compressor package; Cryogenic heat exchanger / cold box components. Also very plausible: Cryogenic valves and final skid-mounted LNG transfer components; Loading skid, cryogenic pumps, and metering needed to load trucks and start sales."

"My bottom line: the likeliest missing parts are the liquefaction train’s cryogenic/rotating equipment — especially the refrigeration compressor and cold-box/heat-exchanger package — with LNG truck-loading equipment as the other strong possibility."

Here's the thing though -- Zeus told us on foot of their site visit in the first two weeks of 2025 that:

"The different processing units are expected to arrive assembled, and then all be connected up at the Tendrara site. These are typically already available and in storage at supplier facilities, and able to be shipped to Tendrara as required once the LNG storage tank is further progressed. The cold box unit is in Louisiana currently being prepared for shipping to the Tendrara site, for example."

And in another note two months later (over a year ago now) they said:

"The new EPC contract comes with a commitment by Italfluid to have the project facilities complete and commissioned during Q4 2025, implying that we should get first gas sales before the end of 2025 (we had assumed mid-2025 previously). Overall, in our view it is positive that the new EPC contract should increase the certainty around project execution timelines, and help underpin the timing of future production and cash flows for Sound."

We are now looking at the second half of 2026 for completion. Is this the "certainty" they were talking about? I don't know what that says about the level of incompetence and/or mendacity involved. Even more concerning is that this is a BEST case. The gear clearly still hasn't arrived so any date they give out is entirely notional. Hard financial realities threaten to put SOU on the skids before the needed equipment.

SOU will not realise significant value from solar PV anytime in the near future. Go read all of Zenith's recent history (Zenith Energy Ltd., ticker ZEN.L). Compared to SOU they have been extremely transparent about their development pipeline and associated costs and valuations.

Importantly, Zenith's solar portfolio is in Italy with the fifth highest electricity prices in Europe, three times higher than Morocco -- an important factor in any value comparison. But suppose we ignore that important caveat. Zenith's project pipeline is large enough that you can find several projects that are probably representative of the early development stage that SOU is at. Case in point is a 23 MWp project in Piedmont acquired last month. Going from development stage to ready-to-build is expected to take until March 2028. (Bear in mind this is from the company's own announcements where you would expect to find the most optimistic spin).

The total build out currently projected by Zenith is less than half the size of SOU's trumpeted 270 MW. To fund that they will be selling a portfolio of already operational and ready-to-build assets over the next year or two. Needless to say, SOU don't have any existing assets like that to sell. And Zenith's projections assume the availability of 85% debt financing. SOU have been unable to raise debt finance under its own steam for either phase of the Tendrara project despite trying for many years, so why would anyone expect it to be able to raise circa $150m for solar?

But, we are told, the idea is to use early projects to bootstrap later ones. That's all well and good. You will see from Zenith's numbers that the big uplift in value doesn't come until a solar project is operational. So a 20 MWp project might cost $10m of which SOU might need to raise $1.5m. Then you are looking at two years of development and one year of construction. After that, the project is generating revenue and paying off debt. You can either bank some of the revenue or sell off the whole project at a tidy profit compared to development costs. But either way you are back at square one, starting the next 20 MWp project with (hopefully) less debt than the first time round.

The long and short of it is that solar projects can be lucrative if you've got money to invest (by which I mean plenty of cash in hand on top of access to debt finance). You can't bootstrap yourself from literally nothing. Sure, for a very modest investment you could probably get a couple of development projects going and sell them for a profit at the ready-to-build stage. But that is small beans and doesn't get you anywhere fast.

It cannot be stressed enough that SOU has NO MONEY. Zilch. It is running on fumes. In fact, two years after the "fantastic" Managem deal it is as close to going bust as it has ever been. If Tendrara Phase 1 doesn't go live in early Q3 it's curtains. And there's no guarantee the parts required to complete it will even arrive. Solar is a complete pipe dream.

I wonder will SOU have the brass neck to do a Spring investor presentation. Gems from years past:

- Feb 2022: 😉Cash generation within 24 months from Phase 1 notice-to-proceed (NtP was 16-Feb-22). 🤔Fast track delivery of Phase 2 project under discussion with different Stakeholders.

- Apr 2023: 😏First Gas planned for 2024. 🤨Phase 2 funding well advanced.

- Jul 2024: 🙄Plant on site – commissioning 2024, LNG sales thereafter. 😑Future activity: Phase 2 FID

- Mar 2025: 😒Phase 1 deliveries scheduled post 2025 commissioning. 🥱Phase 2 advancing to FID, gas 2 years from FID, financing lined up.

- Jan 2026: 😠Phase 1 commissioning commenced in 2025 with production and sales expected Q1/2 2026. 😴Phase 2 advancing to FID, gas 2 years from FID.

Personally I don't think they'll have the cojones to do a presentation in the face of yet another delay. They'll do one when and if commissioning completes. Otherwise it'll be crickets.

Kylie: "Has the consolidation & sp move in the last week changed your view or interpretation of the previous convertible bond holder conversion a few weeks ago? At the time I recall you interpreted it as a positive"

I'm sure it's changed the view of the ex-bond holder 🤣! One thing that amazes me about SOU is how they are able to string along people other than us naive retail SHs. Afriquia must be seething, for instance. I would think the bond holder wanted to get in on a SP rise upon announcement of first gas. I'm not sure his view was longer term than that, and he might have perceived a relatively narrow window of opportunity. So no, it doesn't change my interpretation of events though I'm sure the bond holder would have much preferred to get his shares at the new low price. As I see it, he's still likely to turn a profit if first gas arrives according to the new schedule. But as I mentioned in my last post, that itself is not a nailed down guarantee and I certainly perceive the possibility of SOU becoming insolvent if they don't finally release their first slightly good news in a decade.

Among all the heat generated by the recent RNS, I can't help feeling something important has been missed. Yes, the terms of the fund raise are characteristically awful. Another 5% dilution on top of the 16% from the previous loan note. A shareholder from the time of SOU's announcement of the monetisation of its Moroccan assets has now been diluted over 70%. That's on top of the more than two thirds of the Tendrara assets negotiated away in the divestment to Managem.

The term loan facility in the recent RNS is not hugely more brutal than the one that SOU took out to tide them over the six months from announcement of the Managem deal to its completion. That one was 15% interest per quarter with a 50k penalty in the case of non-drawdown. One assumes that the aim is to never touch the loan facility except in the case of direst emergency. The current one, for instance, would eat up all SOU's projected revenue from Phase 1 for this year.

We can safely assume that SOU is running on fumes. Even the most incompetent management wouldn't otherwise announce a raise on such terms, leading (as it has) to the slaughtering of the SP. The equity placement buys SOU maybe a couple of months of breathing space at best. This brings me to my point. The RNS says of the project schedule that "the updated timing reflects delays in the delivery of the final pieces of equipment required to complete the micro-LNG plant." One thing you can always be sure of with SOU's carefully crafted RNS's is that they carefully avoid some fairly obvious questions. You might even be led to infer an answer that wasn't given, to a question that wasn't asked.

And so the question is: "Are we there yet?". Have the final pieces of equipment been delivered so that we are now in the final stages of commissioning? SOU previously told us that the last piece of equipment was delivered in November. That turned out to be only the last piece of the gas gathering system. Not SOU's fault if you inferred a different answer to an unasked question 😏. It's the same this time round. The "start of commercial gas sales in early Q3 2026" might be a solid projection. Or it might be a mere notional aspiration. SOU knows the answer. But they're not telling *us*.

As of 10am this morning there are 330 posts on the board this week. Kylie and BalancedViewer have posted on average 15 times per day each, accounting for half of all posts. Even serial nonsense poster Adam (who's been on my filter list for the past year) has only posted 4 times per day. There's no point appealing to Adam or BV because neither has ever posted a single useful post and demonstrably can't help themselves. The problem is all the other posters (looking at you especially, Kylie) who encourage them. Just a suggestion -- if you want to refute a point made by another poster, simply state your case and leave it at that. Don't rise to the inevitable childish responses. Trolls revel in the reaction they are able to evince by such tactics because it covers over the fact that they have nothing useful to say.

Sorry Kylie, got carried away there and forgot to add the summary line. I still DON'T share your conspiratorial view. It's not plausible. Do you think Afriquia, for instance, are part of this Moroccan takeover? Wouldn't they want gas flowing a.s.a.p. since they are the offtakers? Wouldn't Managem want the pipeline a.s.a.p -- delays there are costing big money. I'm more inclined toward the old maxim, "Never attribute to malice that which is adequately explained by incompetence".

Kylie, it's a question of degree. Yes, it's been obvious for years that SOU has been stringing shareholders along. I believe there's probably a sordid backstory about Italfluid flakiness that was never reported. Years ago there was the barely mentioned fact that SOU were now paying for the LNG tank, no explanation given. I suspect Italfluid were a supremely dodgy outfit from the get go, but the only vendor SOU could find to finance and operate the plant.

One had hoped that Managem would light a fire under the project but instead they seem to have their own inexplicable inertia, judging by FEED progress. The most frustrating thing is SOU's lack of communication. For years Graham got away with "it hasn't gone as fast as we hoped" as if that was an adequate explanation. Competent project management is not based on hope and a project manager spewing that BS would not have lasted ten minutes on anything I've ever worked on.

I'm not surprised that the random assortment of small retail shareholders cannot act in concert to hold management's feet to the flames. What *is* extraordinary is that there are other seriously invested parties like Afriquia Gaz who I'd expect to be screaming blue murder at this stage. Maybe that's all going on behind the scenes so that placating the wider market is the least of management's worries. Whatever's going on their credibility is completely shot at this point, not least with any sources of finance as evidenced by the rates on today's loan facility. I have this mental picture of them eventually giving away 50% of the company for a toner cartridge for the office printer. 🤣

BV, day by day you are becoming more like generations of other mouthy posters before you (though most of those eventually had the good grace to shut up). Just like them, your ever growing posting history stands as your witness. From March 4th:

"keep up the waffle ... I bet you don't realize that the nearer you get or being a producer gives SOU more renegotiation power for refinancing at better rates."

Care to explain how today's rate of over 60% pa was "better"? I'm listening 🤡.

BV: "I find it amusing that your play toy thinks i don't know about SOU's past history which i have no interest in. The trick is to invest at the rock bottom price, which i have done."

Knowing how much you love emojis, 😏, this seems apt:

🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡

RNS of 8th Dec: "The final required component of the gas gathering system ... was delivered on 28 November 2025".

RNS of 20th Mar: "The updated timing reflects delays in the delivery of the final pieces of equipment required to complete the micro-LNG plant."

Silly me, I assumed the final component of the gas gathering system was the last component of the whole system. Otherwise why bother telling us. Or more to the point, why NOT tell us that there are other components of other subsystems that are NOT delivered yet. Plausible deniability notwithstanding, this is nothing short of flat out lying. Not to mention that this is the second time in a row that we've got an announcement in the last week of the quarter that the schedule has slipped another quarter. Much the same has been going on since at least 2023.

You have to laugh at the implication in the RNS that SOU just heard about this from Mana who just got the updated schedule in the post from Italfluid. I'd have hoped someone was on the phone to Italfluid FIRST THING EVERY SINGLE MORNING to check on progress. That's the sort of thing you do on projects that have gone off the rails literally YEARS ago and represent an existential threat to the project sponsor.

We've been told that SOU read this bulletin board. I hope someone's reading this. YOU'RE LYING. WE KNOW YOU'RE LYING. Not to mention incompetent. Is it a year ago now that Graham said he couldn't understand why the share price was so low? Allow me to give you a hint -- incompetent management has rendered this company uninvestable.