Last checked at 4 Sep 2017 07:00
4 September 2017
Sound Energy plc
("Sound Energy" or the "Company")
Eastern Morocco: Update re Development Funding
Sound Energy, the European and African focused upstream gas company, is pleased to provide an update on the funding which will be required to develop the Company's existing Eastern Morocco discovery.
Further to receipt of a non-binding expression of interest from Oil & Gas Investment Fund ("OGIF") in July 2016 in relation to OGIF's interest in funding, building and operating a new pipeline connecting Tendrara to the Gazoduc Maghreb Europe ("GME") pipeline, the Company is pleased to announce that it has now received an indicative non-binding commercial proposal (the "Indicative Proposal") from Advisory & Finance Group Investment Bank ("AFG"). AFG is a Moroccan based financial institution which acts as fund manager to OGIF, the Company's partner in Morocco*. The Indicative Proposal is provided by AFG on behalf of a range of institutions, including shareholders of OGIF.
The Indicative Proposal, subject to agreement of terms and contract, is for the provision of funding for the construction of the Tendrara Gas Export Pipeline ("TGEP") connecting Tendrara to the GME pipeline of between US$60 million and US$100 million. The Company currently estimates the gross capital cost of the TGEP pipeline to be approximately US$60 million for a 12 inch pipeline and US$100 million for a 20 inch pipeline.
The TGEP is a critical part of the infrastructure which will be required to support the commercialisation of gas from Tendrara by connecting the proposed Tendrara processing facilities to the GME pipeline. Connection to the GME pipeline and therefore to the Moroccan and Southern European gas markets, would support Sound Energy's strategy to access infrastructure connected to growing domestic and international gas markets.
The Indicative Proposal from AFG also confirms that AFG has been advised that a subset of the institutions may also be willing to fund the planned Tendrara upstream processing facilities.
\* The Company continues to progress well with its acquisition of various licences in Eastern Morocco from OGIF (the "Acquisition"). On completion of the Acquisition, which is currently expected to occur before the end of Q3 2017, OGIF will become a shareholder of the Company.
For further information please contact:
Vigo Communications - PR Adviser Patrick d'Ancona Chris McMahon Alexandra Roper
| Tel: +44 (0)20 7830 9700 |
Sound Energy James Parsons, Chief Executive Officer
| j.parsons@soundenergyplc.com
|
Smith & Williamson - Nominated Adviser Azhic Basirov David Jones Ben Jeynes
| Tel: +44 (0)20 7131 4000 |
RBC Capital Markets - Broker Matthew Coakes Martin Copeland Laura White
| Tel: +44 (0)20 7653 4000 |