Member Info for ps200306

Can't see any sale in the offing. Schlum get a clawback on exploration interest if sold before Feb 2023. Also, they get a 100% charge over shares in SEMEL (effectively SOU's entire assets) until payments start being made under the Profit Sharing Deed. (I presume this has to be squared with the bondholders who also have a lien over SOU assets). That suggest LNG or bust for SOU, not an early sale.

Also just to note -- SP Angel's upgraded target price is for *Phase 2*. I notice the table that contained SOU debt for Phase 2 is missing from the new valuation. With Schlum out of the picture, does that go from $80m to $120m+? The LNG (Phase 1) is still worth *less than zero*. We don't even get FID on Phase 1 until the end of the year. And that depends on the tax bill being sorted. Can't see anything much happening here for a while.

Shouldn't be a problem as plans for FID have gone out to end of 2021. The more serious concern remains that they will also need to have the tax bill sorted.

ericnat: "The problem is SLB just gave up the interest in all of the acreage apart from the concession area. That tells me they don’t think there is any value outside the Horst."

ktf: "seriously, have you read the rns? they have agreed a profit sharing arrangement!"

Ericnat is right. The profit share is only on the Tendrara concession, which means the current agreed field development plan. Schlumberger have given up any interest in exploring Greater Tendrara. It also means they won't be bearing any of the costs of future exploration. Good news for SOU if they can get to first gas as they now get an approximately 15% greater share of the profits. Means nothing until they get the Afriquia Gaz contract squared away. Still no news from Graham about what's holding that up even though it's six months late and exclusivity has expired.

WTI just passed the $70 mark. Brent above $72.

I'm sure it's a very useful contribution to the board for ktf and STD123 to pretend they have filtered me and then comment on every post regardless. Someone should tell them what the filter button is for.

"The only facts you need to know is they sold out at rock bottom prices and one of them then bought into PVR which has since dwindled down and is now only worth half what they paid for it "

a) Not even remotely true, and b) smacks of desperation that they think fabrications and ad hominems make up for the lack of something positive to say about SOU.

"Back in the blue again today. Slowly but surely we are slowly heading in the right direction."

Another one twentieth of a penny random movement. Who does this oaf think he's kidding. The share price has dragged along rock bottom since the second tax bill announcement, and for good reason. Does he think the price is going to just magically go back up all on its own without the current predicament being addressed?

However, it's time for me to stop responding to this stupidity. My purpose is not to be gratuitously negative, but merely to discuss the verified facts about the situation SOU is in. Not my problem if this pair of oafs consider that a mortal sin. They're only encouraging me.

ktf: "I believe the tax issues will be sorted and LNG will generate cashflow and we will start exploration either alone or with partners"

If only statements of belief and evidence-free assertions could influence long term value. However, back in the real world, LNG is *not* going to generate any net available cash for exploration or anything else. That is an already documented fact. Net cash for drilling depends on the pipeline which, in turn, depends on raising a lot more money than SOU has managed to date. Right now, SOU cannot close the deals it currently has on its plate. Those will not close until the tax issue is sorted. The longer that drags on, the more SOU incubates another future problem. It has to start amortizing the bond at the rate of $1m/year starting December 2023. Had FID occurred in 2020 as advertised, that would have been comfortably far in the future. When the bond was restructured in March, it probably still sounded manageable.If FID gets pushed out to the end of this year or beyond, it starts to look like a whole new bondholder crisis. The start of LNG revenue is then mid-2023 at the most optimistic, and let's not forget the first couple of million in revenue are earmarked for a contractual payment to ItalFluid. SOU may be slipping on all its targets, but the debt schedule is not.

STD123 is down 60% (less than most here) and says a tenth of a penny change in SP is the green shoots of recovery!!! Would be hilarious if it wasn't so tragic.

Of course it's a shakedown. Graham knows it's a shakedown. Read the comments from both him and Mohammed at the end of the last RNS. For example: "The tax framework of the hydrocarbon sector not being applied is a poor reflection on doing business in Morocco". That is not something you say lightly about your host country, especially one in which political patronage is all-important. I presume these words were carefully considered. That SOU was prepared to be so undiplomatic is a reflection of the extreme seriousness of the situation it considers itself to be in. Anyone who thinks the tax bill is just an irksome mistake is kidding themselves.

STD123: "This might upset the resident posters,doom and gloom (aka PS and PD) but any positive article is always welcome."

Over a month old, and containing no news? Don't be ridiculous. Here is the original medias24.com article on which that post is based. The only thing of note is a rather weird reference to 2025!

"Trois ans après avoir signé avec l’ONHYM un permis d’exploration du champ gazier de Tendrara, la société anglaise s’apprête à commercialiser les réserves confirmées des puits TE-5, TE-6 et TE-7. Selon une source fiable, la construction d’une usine de liquéfaction permettra de fournir dès 2025, 9% des besoins annuels de GNL du Maroc.

La signature du contrat d’exploration d’une durée de 25 ans entre Sound Energy et l’ONHYM a eu lieu en 2018. Le démarrage de la commercialisation du gaz naturel liquéfié est prévu pour 2022 ou 2023. Une durée de 5 ans donc aura été nécessaire pour que la société anglaise arrive à exploiter le potentiel du champ de Tendrara. Sachant que l’Algérie est pour l’instant l’unique fournisseur du Royaume en gaz. Sound Energy devrait donc devenir dans environ deux ans, le deuxième ravitailleur du marché national de GNL."

"Three years after signing an exploration permit for the Tendrara gas field with ONHYM, the British company is preparing to market the confirmed reserves of the TE-5, TE-6 and TE-7 wells. According to a reliable source, the construction of a liquefaction plant will provide, from 2025, 9% of Morocco's annual LNG needs.

The signing of the 25-year exploration contract between Sound Energy and ONHYM took place in 2018. The start of the marketing of liquefied natural gas is scheduled for 2022 or 2023. A period of 5 years will therefore have been necessary for the English company to be able to exploit the potential of the Tendrara field. Knowing that Algeria is for the moment the only supplier of gas to the Kingdom. Sound Energy should therefore become in about two years, the second largest tanker on the national LNG market."

STD123: "Utility yes we have a second tax demand but I have not seen any evidence thus far to suggest that the journey to first gas will be altered."

Seriously? Surely this has to be a wind-up. How about missing a *second* deadline for concluding a deal? The expiry of exclusivity with both partners? The lack of a plan (that anyone has been told about) for what happens next? This chump is totally, utterly deluded.

SOU is no longer even working to any announced deadline other than the vaguest possible "FID by end of the year". There clearly has been no progress whatsoever on the first tax bill in nine months. There is now a second bill and SOU is embroiled in a bureaucratic process which they have told us could run for a year with no guarantee of resolution even then. It would be enormously surprising if Afriquia Gaz concluded a deal with a company that had such a question mark over its solvency. This is hardly speculation -- it's how contracts work in every normal functioning economy.

I'm afraid it's impossible to take STD123 for anything but an idiot at this stage.

One can only wonder what STD123 imagines the filter button is for. Seemingly it's so you can respond to comments that you don't even read (allegedly). What a tool.

STD123: "recently sold up the majority of her[?] holding whilst the shareprice was low only to see it then rally a short while later"

You missed the bit where it tanked again later. Or are you afraid to look at the share price as well as the RNS's? :-)

STD123: "went on to invest what little that was left in a company called PVR at over 7p "

5p, thanks for your interest, which is rather curious for someone who claims to have filtered me. And no, I have not claimed I am good at finance, nor that SOU is doomed. I still have a significant investment here. On the other hand, I am not deluded enough (unlike you) to pretend that SOU is in a good place right now.

STD123: "I have already pointed out that just because someone bombards us with pages and pages of cut and pasted snippets from previous RNS doesn't mean they can produce an accurate assessment of the worth of the company or the shareprice."

Nobody needs to attempt that because the company ALREADY PAID SOMEONE TO PRODUCE SUCH A VALUATION. You should read it.

STD123: "As I have pointed out previously, I doubt that Graham himself could even be that accurate"

He ALREADY PAID SOMEONE TO PRODUCE A VALUATION. Have you read it?

STD123: "...based on not knowing at this moment the outcomes of the tax situation..."

That's easy. If the tax bill does not go away without needing to be paid, SOU IS BROWN BREAD, simple as.

"... and future potential worth of any farm in agreement or the worth of the pipeline which would depend on future funding and potential agreements signed."

All modeled in the VALUATION THAT SOU PAID FOR. Do you even know it exists?

STD123: "We can all speculate but at present with Graham at the helm he has demonstrated that he can make a difference"

Uh, no he hasn't. There is no deal and no FID a year after Graham said they were coming in six months.

STD123: "he deserves some support and encouragement rather than unfounded criticism"

Unfounded? Says the self-confessed know-nothing.

ST123: "You must admit that to date Graham has not deceived you in any way"

Let me count the ways. He announced a plan for FID in 2020. In the dying days of the year he released an RNS about the ItalFluid sign-up, which effectively said he'd found someone to take SOU's money -- not exactly the awaited news. Was it mere absentmindedness that he didn't acknowledge that he had missed his own deadline? The next deadline was end of March. Once again we got a bait-and-switch -- a bond restructuring proposal instead of closed deals, let alone FID. And again, only an oblique reference to end of exclusivity with the two counterparties. Throughout all of this he remained schtum about progress on the tax issue which it's now obvious was going much worse than he ever let on. Sins of omission, perhaps, but enough to dispel any confidence in the sort of white knight status you're peddling.

ST123: "And right on cue the positivity police arrive...."

You're still reading then, even while pretending to have your fingers stuffed in your ears. The irony is that I agree with Woundlick. Graham quite likely *is* doing a better job than his predecessors.

What I can't understand is the attitude that all negative comment is to be shunned. You should write to Graham and ask him to stop publishing RNS's and valuations then. That's where the negativity is. SOU has to make the tax bill completely vanish, close the LNG deals, find a farm-in partner, raise $80m, and build a pipeline, JUST TO BE WORTH ANYTHING AT ALL. And it has to do it in a timely manner because it doesn't have enough operating cash to drag its heels. It's already a year since Graham announced FID would happen in six months.

I'd genuinely like to see it all work out, if nothing else because I'd prefer not to see my last few tens of grand flushed down the toilet after the other 95%. But you'd have to be stone cold delusional to believe it's a strong possibility at this stage, let alone an inevitability.

Yes, don't look at that tax bill. Look at this 0.03p rise in the share price (no, not thruppence, three *hundredths* of a penny). IN GRAHAM WE TRUST.

Spencerhughes100, are you suggesting that SOU paid a broker to falsify a valuation of the company to get the Moroccan tax authorities off their back? Or just that the current low share price is good news because it will throw the authorities off the scent? Of course, those authorities would be interested in SOU's assets which are nothing to do with the share price. No offence, and sorry for your losses, but I don't think this is rational.

Thanks, ericnat.

What exactly is the point of filtering if you're going to comment every time you see a filtered message? Anyway, let's quit pretending. You're reading all the messages. That's why you can't keep yourself from responding.

And yes, the share price is up by a massive 2%. After falling 50% since the bond restructuring proposal. C'mon let's hear it ... IN GRAHAM WE TRUST.

And speaking of the tax crisis, I presume nothing of note happened at yesterday's first tax committee hearing. Graham isn't exactly bending over backward to share any details of what's going on. He employed specialist tax advice way back in September and has never actually said what the Moroccan tax authorities response to approaches was. A little more transparency would be good (at least for all but the terminally incurious ST123).