Member Info for Soundingoff

He hasn't plucked them out of thin air Jones. He's based them on O&G P/E ratios. I expect them to be lower, but if we are aligned with a well known development co, then maybe they won't. I also don't know what P/E ratios smaller O&G companies are valued at. Rather than dismiss these posts, maybe you could research smaller O&G companies with significant production and report back?

Yes I'd imagine they would consider extending the production area around the TE5 Horst. As we took the high risk strategy, we ignored the potential of that area after TE8 (clearly a step too far given the geology). Each drill would only cost around 0.2p of an annual dividend.

Thanks for that ps. I was thinking about it the other day.

Partridge- I can't follow the last bit of your calculation?

We are selling 24.2% for $112.8, so shouldn't that should be the divider, not 23.3%? So I get $41.95m cash paid for the 9%

Then shouldn't the carry calculation use 23.3%, not 24.2%. Here I get $22.6m for 9% carry returned.

I work the cash paid to Sound for the 9% transfer as $64.55m (including the refunded carry).

Total cash paid of $118.85m for the 33.2%

Then we will have a carry for our 14.3% of $35.9m.

Total value of $154.75m or the same as the original $112.8m/24.2*33.2.

IMO it's looking like Morocco wouldn't sign off this deal without more exploration. Lucky for us.

I took a slightly different approach to you partridge, but get similar figures (2.5p/1.5p). I grossed up the GSA figures for 66m scuffs p/day (unlikely you'll get the same rates but only an estimate), used £1:$1.3 and allowed for 20% royalty and operating costs. The field can run for 15 years on a mid case basis, but of course should be front loaded due to field degradation. Also we'll pay corporation tax after 10 years.

I’m sure BM said they’d completely changed their opinion on it wh0s. Nothing in writing though... Anyone else remember?

Since I posted that I think SBK was upgraded to 600/800bcf IIRC?

EIA Approval for Sidi Moktar 2D seismic acquisition

Sound Energy, the Moroccan focused upstream gas company, is pleased to announce the approval of the Environmental Impact Assessment ("EIA") for a 2D seismic acquisition programme within the Company's Sidi Moktar permits, onshore Morocco, an area of 4,712 square kilometres. This approval, which concerns 25 territorial communes of the province of Essaouira and 11 territorial communes of the province of Chichaoua, is an important step in the local permitting process and enables the Company to continue its preparations for the forthcoming seismic acquisition campaign.

It should work if you use this address wh0s:

https://yoursoundenergy.com/

Correct. Obviously this is a different metric than the infamous 150p, which was 150p per recoverable TCF to Sound, not the licence as a whole.

'Indeep have you looked at the RNS and carried out any calculations?

If we consider a best case scenario of no further dilution then this is what we can end up with;
currently;
1 TCF = 0.75 pps 47.5% of 100% of the licence

After selling off 51% of the 47.5% then we end up with;
1 TCF = 0.36 pps 23.3% of 100% of the licence

If the 9% of the 23.3% remaining is exercised we are left with a 14.3% interest;
1TCF = 0.11 pps approx 14.3% of 100% of the licence

Of course there will be further dilution, and if we take Sounds mid-case estimate of 20 TCF with a 50% recovery then if we are left with 14.3% of the licence area you'll be lucky to see 80pps over many years.'

Kasjnation- I can't follow your figures through to the end. I think the calculation for the 9% reduction isn't right? Worst case I calculate 21.5p NPV10 to Sound based on each recoverable TCF discovered on the licence. Of course the NPV may change.

Also we don't know if there will be dilution. Guessing what we could achieve is impossible without knowing the particulars of the deal. If we are hypothesising, the question will be, if we do discover more TCFs, then will we finally be able to attribute value to potential exploration?

What I would like to understand when/if we have a deal agreed, is what the up to date potential is in the TAGI and palaeozoic.

If you say so N4a (EGM). Hopefully you now understand what a JV is.

Wh0s- My point is, that if we can't get decent value, personally I would accept a discount now to drill again. Not what I wanted, but that's life.

It'd be interesting to know if the market has turned. Certainly that deal is well below NPV from what I've read. A poster over on AMER:

'This is 10p or £130m under what is the core value for the business and values the prospective resources at zero.'

That's why we need to wait to hear the rationale behind our deal.

Seriously wh0s! Go and read the comments. I think it was was better waiting for our 'deal' than that.

Potentially we could see some sort of multi-level agreement, split between production and exploration. Schlumberger have a separate share in the exploration license, but still have a synthetic holding (via SOU) in the Horst. How does that fit into the JV?

Very funny Shaun, that made me laugh.

'On the subject of the extra 9% stake this private company could potentially buy. Been talking to a practising accountant and she thought it was a strange deal too so did some digging for me - i mentioned no company names and spoke generally to not bias things.

Her thinking is as follows:

- 51/49 split is a bit of a dubious split for a JV, this small difference shows one party has the upper hand and therefore greater control
- In normal practice it is almost always 50/50 equal partnership hence the name JOINT venture
- the 51/49 split would make one entity a subsidiary of the other in normal practice and therefore affects reporting requirements
- Increasing the differential to 60/40 (if and when the 9% is bought by this mystery company) would make one party an associate and therefore give even less control and affect the reporting requirements even further (reporting on a project with an associate rather than a subsidiary or JV partner)
- She also confirmed that it would be relatively easier for the owner of the license to disassociate itself from an associate, given that they have far less control due to lower interests, and that there is no way control could be sought as the 50% threshold will not stand, and it is unlikely that they will allow other rules to be met to demonstrate EFFECTIVE control (i.e. distribution of BoD from either side, who makes the management decisions)'

N4a, sorry EGM. Your friend is missing the point of a JV. It is an agreed contract between a number of parties. There will be some freedom in terms of decision making, but the whole point of the JV is most of the terms are nailed down. Go and have a look at all the JVs out there on all those O&G developments.

Maldini- Apologies but I'm waiting for the terms of the JV with regard to exploration. It's up in the air at the moment how costs and profits from exploration may or may not be split.

Hopefully you've got in at the bottom Analist.

The SP is here due to sentiment. Though the HOT do need to convert to a deal on the basis noted to realise that value.

You may as well ignore this board at the moment chrishutch. It's mainly emotional and we're practically devoid of rational though. Some genuine, but some are just here to feed on negativity. I would recommend you DYOR on the deal and the assets we have. The note below, the website and RNSs give some details. Not to teach you to suck eggs of course.

https://www.soundenergyplc.com/media/1594/exciting-times-ahead.pdf

https://www.soundenergyplc.com/media/1624/se-ip-q4-1-oct-v1.pdf

The SP is where it is due to sentiment, not the core value of the assets.