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It'll be interesting to see if we get the full report before or after TE10 TD. I'd imagine Sound want it before, but it may be tight. I would hope that the report explains the complexities of those calculations and how additional finds would affect the Horst value (positively).

https://www.soundenergyplc.com/media/1591/2018-12-12_ogif-letter-to-soundenergy-plc.pdf

Exciting times ahead

13/12/2018

Sound Energy, together with its partner Schlumberger, has started drilling its second exploration well in its current programme on the Tendrara concession, onshore Eastern Morocco where it is operator with a 47.5% working interest. This programme is looking to evaluate multiple independent geological play types contained within the licence. The next two wells are targeting multi-TCF potential which, if successful, has the ability to provide a step change in the group’s reserves and resource base. In addition to Sound’s obvious exploration potential, we derive a valuation for Sound Energy’s share of the TE-5 discovery of approximately US$360 million using industry standard valuation methodology – equivalent to 27.1 p/share. Sound’s on-going exploration has the potential to materially increase this valuation.

You will have to register to view the research note.

A very interesting FSC:

- GSA has political overlay and will be announced once we have Heads of Terms. Appears very near to completion, but could be stuck
- The sale of company reference to PLC employees was interesting
- New party interested in Sidi

But the three main points for me are:

- TE10 small pool is 26% COS and if the results are optimal, then it appears it goes a long way to derisking the strat play. This appears to be confirmed by the valuation by Progressive of 110p or roughly 1.3TCF recoverable at their metric, slightly higher than our own. Probably concession vs horst calculations.

- Research notes on the Horst and TE10. It's interesting that coverage has started now. This is what happened with Cove to get an outside reference to their value. I'm looking forward to the update with the basin potential. I think it will surprise some.

- Finally OGIF- just what news are we getting in the morning? Surely there has to be an RNS?

I'm going with no news PNE.

But there is an argument to say if you wanted the CC clear to discuss the GSA/other important news, you could use the FSC to get the 'less relevant' questions out the way?

L2 is irrelevant right now IMO and could change in an instant. The whole movement from 11p is down to ALGO trades. It's out of our hands.

If you factor that into our Horst DCF calculations, you're probably looking at an increase in value equivalent to half our current MCap. That for me is why our current SP looks so far off from reality. I don't think they'd look to step it back as any buyer would want the flexibility and so could pay us the upside.

The fact is that for every seller there must be a buyer. Most of the volume has been from ALGO trading and we don't know why or what this means for our share register. However we do know some PIs have sold or derisked. Who has replaced them? I know I've helped, but we simply don't know what our revised share register looks like.

Exploration- Firstly, I think there's zero chance of what you suggest happening. But:

You would need to read Sound's M&A (company articles) to be certain on the procedures you note.

The most important bit that's missing from your post would be the voting on appointment and removal of directors. Just calling a meeting is pointless.

Again we would need to look at the M&A, but generally you would need 50% of the votes. So here, PIs would need to vote with OGIF and lose control of the company that they own. Some may if they were deluded, but I'd again suggest the chances of that happening are zero.

The only major change in shareholding that wouldn't be reportable would be the sale/purchase of shares by IIs within reporting limits. I can't see how it could be the placing shares as they'd have been making massive losses on the placing price of 37p IIRC? That leaves other IIs buying or selling?

A question for the FSC.

Crude- At the DD it was mentioned to me there was the smaller target and the overall strat play. So it doesn't appear to have changed since TE9, although I can't be certain. However we need more clarity on exactly how TE10 will work for us.

My apologies trellis, I missed that bit. I'm afraid my view was/still is clouded by your rewriting of people's notes of the DD, which I was very unhappy about.

Back to your facts and wine...

Apologies again.

trellis- Every day you tell us to stick to the facts, yet here we are again with you making it up when it suits. I'm guessing you've already called up JP and confirmed thesis you only deal in facts?

It's a shame we always see these false drops before good news... You'd make more money if you trade this one.

I trust you have your no win no fee solicitor on the case right now then Foxy. But make sure they don't screw you down on their cut. Plus don't forget the compo on your mental distress!

Anyway, being here isn't classed as working for me, so I better go and do something useful.

I don't want to appear rude Foxy, but I'm not too interested in arguing with you. I get it, you're here for a trade and you also hate Sound after being burnt on Badile. I've been buying recently and will continue to do so, all dependent on news flow and success/failure on the drilling.

The TE5 concession on its own is worth a multiple from here and that's on my own calculations not Sound. I've always based my investments on my own research and calculations. I'm not happy with where we are now, but am focused on the end goal for me.

I'll leave you to your 'work'.

Just your administration comment Foxy, very opportunistic and of course very wide of the mark. This is now an incredibly cheap asset play. Mind you we aren't alone right now, given general market conditions and those specific to O&G.

A fine retort on the video though.

I have to give it to you Foxy, you really have no shame. As they say, people will do anything for money.

Can you remember what value you came up with for the Horst Fellrunner ;) ?

I just used $10m dodge. It doesn't have too much impact on the calculations compared with other variables, so I was happy with that.