Sound Energy Regulatory News (SOU)

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18 December 2019

Sound Energy plc

("Sound Energy" or the "Company")

Proposed Placing

Sound Energy (the "Company"), the Moroccan focused upstream gas company, announces a proposed placing of new ordinary shares in the Company ("Ordinary Shares") to raise not less than £1.5 million before costs (the "Proposed Placing") at a price of 2.0 pence per new Ordinary Share.

The net proceeds of the Proposed Placing will be used to strengthen the Company's cash position (adding to the Company's cash balances of approximately £5.4 million as at 30 November 2019) whilst the Company continues to progress the potential partial sale of its Eastern Morocco portfolio (the "Partial Sale"), in relation to which the Company announced the award of exclusivity and the entry of non-binding heads of terms on 6 November 2019.

The due diligence process being undertaken by the counterparty in relation to the Partial Sale is ongoing, exclusivity for the period to 14 February 2020 (subject to certain milestones being met) remains in force and Sound Energy would expect to receive a gross initial consideration payment, on completion of the Partial Sale, of approximately US$29.8 million should the Partial Sale be successfully concluded on the terms included in the non-binding head of terms previously announced by the Company (the "HoT"). Full details of the HoT are included in the Company's announcement of 6 November 2019 and further announcements in relation to the Partial Sale will be made, as appropriate, in due course.

The Company cautions that there is currently no binding agreement in place in connection with the Partial Sale, that counterparty due diligence has not yet been completed and therefore that there can be no guarantee that the Partial Sale will be concluded successfully.

The new Ordinary Shares to be issued pursuant to the Proposed Placing will, when issued, rank pari passu in all respects with the Company's existing Ordinary Shares and application will be made for the new Ordinary Shares to be admitted to trading on AIM.

Further announcements in relation to the conclusion of the Proposed Placing will be made, as appropriate, in due course.

Marco Fumagalli, Sound Energy's Interim Chairman, commented:

"On the back of the recent UK election result and following recent inbound interest in our Company, the Board is proposing to take the opportunity to strengthen our capital position via this proposed fundraising, ensuring we maintain strong financial headroom whilst we progress the previously announced prospective transaction. We look forward to updating the market on our progress in due course‎."

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The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

The Placing does not constitute a public offer of securities in accordance with the provisions of Section 85 of the Financial Services and Markets Act 2000 and accordingly a prospectus will not be issued in the United Kingdom.

This announcement does not constitute an offer of securities in the United Kingdom or in any other jurisdiction, including the United States of America.