MOROCCO: Sound Energy Announces Audited final results for the year ended 31 December 2023
HIGHLIGHTS
Substantial 2023 Project execution undertaken – positioned for significant operational and financial progress through development of pivotal Moroccan Tendrara Production Concession, with rig activities from June 2024 and plant commissioning planned by year end
· Phase 1 Micro LNG (mLNG) project (Phase 1):
o Completed mLNG tank foundations and manufacturing of the main components of the outer and inner LNG storage tank in 2023
o Advanced construction of the access road, which is scheduled for completion summer 2024
o Design, planning and procurement of equipment for workover of wells TE-6 and TE-7. Initial well works setting packers in each well successfully completed in Q4 2023 with rig activities scheduled for June 2024
o Processed gas expected at plant by end 2024 with LNG sales thereafter
· Phase 2 Gas (pipeline) development (”Phase 2”) – financing to be concluded in 2024
o Receipt of binding conditioned term sheet in June 2023, for project financing from exclusive lead arranger, Attijariwafa Bank, Morocco’s largest bank
Corporate – strengthening of financial position
· In June 2023 the Company entered into a non-binding term sheet with Calvalley Petroleum (Cyprus) Limited for a partial divestment of a net 40% working interest in the Tendrara Production Concession and the Grand Tendrara exploration permit
· In May 2023 the Company entered into a full and final settlement of its tax disputes with the Moroccan tax authorities and received court papers in June 2023 confirming the withdrawal of the cases between the Company and Moroccan tax authority
· In June 2023 the Company made a drawdown of £2.5 million of up to £4.0 million senior unsecured convertible bond instrument.
· In December 2023, restructured the Eurobond such that it will now not be fully redeemed until December 2027 rather than partially from December 2023
· Phase 2 financing planned to be concluded in 2024 through Project debt and conclusion of partial asset divestment
Graham Lyon, Executive Chairman said:
”Whilst substantial progress had been made in advancing mLNG and the financial foundations for Phase 2, execution and closing of documentation experienced delays. However, timely conclusion of the proposed partnering arrangement and bank debt financing in 2024 will facilitate progress on the pipeline development at Tendrara, as well as funding for further exploration on Grand Tendrara.
The micro-LNG development at Tendrara construction has suffered from supplier delays and is now expected to be ready to receive gas into the plant by the end of 2024 with LNG sales thereafter. The Company continues to uphold strong 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 2024 and beyond, as we focus on delivering material developments in transition energy.”