Sound Energy Regulatory News (SOU)

12 February 2018

Sound Energy plc

("Sound Energy" or the "Company")

Sidi Moktar: Award of New Petroleum Agreement

Sound Energy, the Morocco focussed upstream gas company, is pleased to announce the award of an 8 year petroleum agreement relating to the area currently covered by the Sidi Moktar onshore exploration permits in the Essaouira Basin, central Morocco ("Sidi Moktar").

Sound Energy's CEO James Parsons said:

"Sidi Moktar represents an exciting second leg to our Moroccan portfolio, following on from Sound Energy's success at Tendrara. The Company is actively pursuing and remains committed to the development and expansion of its Moroccan portfolio."

Sidi Moktar Petroleum Agreement

Further to the Company's announcement of 30 November 2017, the Company is pleased to announce that Sound Energy has been granted, subject to Moroccan Energy and Finance Ministry approval, a petroleum agreement covering Sidi Moktar (the "Sidi Moktar Petroleum Agreement"). The Petroleum Agreement, details of which are provided below, has been granted to Sound Energy by L'Office National des Hydrocarbures et des Mines ("ONHYM"), the Moroccan state regulator for petroleum operations, and will come into force on approval of the Moroccan Energy and Finance Ministries.

The Sidi Moktar Petroleum Agreement covers a large area extending across and beyond the permits that were formerly known as the Sidi Moktar Nord, Sud and Ouest Permits. The new Sidi Moktar Petroleum Agreement covers some 4,499 square kilometres and will be named 'Sidi Moktar Onshore' (comprising sub-areas termed 'Sidi Moktar I', 'Sidi Moktar II' and 'Sidi Moktar III').

Upon the Sidi Moktar Petroleum Agreement becoming effective, the Company will hold an operated 75% position in Sidi Moktar Onshore. The remaining 25% will be held by ONHYM.

The Sidi Moktar Petroleum Agreement will have a duration of 8 years from award and, as with all Moroccan licences, will be divided into 3 phases, with each phase having pre-agreed work commitments. The work commitments under the Sidi Moktar Petroleum Agreement will be:

· Initial period of 2 years and 6 months: acquire and process 500 kilometres of 2D seismic, a short well test of the Koba-1 well and abandonment of Koba-1 and Kamar-1, if required. The Koba-1 well was re-entered and tested by Sound Energy in 2017.

· Optional First complimentary period of 3 years: 1 exploration well with a minimum Liassic objective and acquire and process 150 square kilometres of 3D seismic.

· Optional Second complimentary period of 2 years and 6 months: A further single exploration well with minimum Liassic objective.

On 30 November 2017 the Company announced its initial volume estimates of the exploration potential of Sidi Moktar, following an independent preliminary technical evaluation (the "Sidi Moktar Study"). The Sidi Moktar Study mapped a portfolio of 28 Liassic, Triassic and Paleozoic leads in a variety of hydrocarbon trap types across the Sidi Moktar exploration permit areas and highlighted an exploration potential best case of 8.9 Tcf with a high of 11.2 Tcf and a low case of 6.7 Tcf, unrisked gas originally in place (gross). In addition, Sidi Moktar contains an existing gas discovery in the Lower Liassic ("Kechoula").

 This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

For further information please contact:

The information contained in this announcement has been reviewed by Sound Energy's Executive Vice President, Brian Mitchener, a chartered petroleum geologist. The Company's internal estimates are made in accordance with SPE standards.

Tcf means trillion standard cubic feet of gas; Bcf means billion standard cubic feet of gas.