MOROCCO: Sound Energy Announces its Audited Final Results for the year ended 31 December 2022.

HIGHLIGHTS

Development of the Moroccan Tendrara Production Concession

·      Phase 1 Micro LNG project

o  Signing of the Notice to Proceed in February 2022

o  Drawdown of the Loan Note subscription with Afriquia Gaz commenced in February 2022

o  Site preparation activities at the Tendrara TE-5 Horst commenced in March 2022

o  Main civil work (LNG tank foundations) done and checked in early 2023

o  Despite the disruptive events occurred in 2022 which delayed the activities, engineering and manufacturing are both progressing

o  Phase 1 LNG delivery scheduled to commence in 2024

·      Phase 2 Gas (pipeline) development

o  Announced Gazudoc-Mahgreb Europe (”GME”) pipeline interconnection agreement with ONHYM in March 2022

Project financing

·      Appointed Attijariwafa Bank, Morocco’s largest bank, as exclusive lead arranger for the senior debt financing, in June 2022

·      The Company launched a process to seek a funding partner in both the Tendrara Production Concession and in the underexplored but prospective surrounding exploration permits in the Tendrara basin.

·      Indications of interest from several parties were received by year end and the Company is continuing negotiations.

Exploration

·      Extension of Sidi Moktar and Anoual exploration permits by a further year (subject to ministerial approval)

·      Entry into the first complementary period on the Grand Tendrara exploration permits (subject to ministerial approval)

·      Identification and high grading of three potential near term subsalt drilling opportunities where, importantly, any future discoveries have the potential to be commercialised through the planned infrastructure of Phase 2

Corporate

·      Successful equity raise of £4 million (before expenses) in June 2022

·      Post period end, the Company has entered into a full and final settlement of its tax disputes with the Moroccan tax authorities, subject to the Court agreeing that all cases be withdrawn   

Graham Lyon, Executive Chairman said:

“2022 was a year of real tangible progress for Sound Energy, with the micro-LNG development at Tendrara contracted to deliver maiden revenues in early 2024. I am pleased that, as we move further into construction activities, the Company continues to uphold all our ESG values and deliver our work in a manner commensurate with our principles. We are pleased to have settled our outstanding tax matters such that we can optimise our resources on field development. We have enjoyed a supportive working relationship with ONHYM, the Ministry and our various contractors in Morocco, and, most importantly, we continue to benefit from the hard work and dedication of our own staff. We will continue to work diligently to deliver value and progress for all our stakeholders during 2023 and beyond as we target to deliver material developments.”