Page 12 - AfrOil Week 26

AfrOil INVESTMENT AfrOil

The RSSD group found oil at Sangomar in 2014 (Image: Cairn Energy)

That deal calls for Sound Energy to extract, Sound Energy did not comment further
refine, liquefy and sell to its Moroccan partner on the talks with its local partner. It did say,
the equivalent of 100mn cubic metres per year though, that it intended to take a final invest-
of gas over a period of 10 years. ment decision (FID) on Phase 1 Development
The proposed document would also have in the second half of 2020. Additionally, it stated
take-or-pay provisions under which the Moroc- that it was making progress in negotiations with
can firm would have to take delivery of at least potential contractors with respect to the design,
90 mcm per year of gas. It would set the price of procurement, construction and operation of
the gas “within a range of $7 to $9 per mmBTU the micro-LNG plant that will be built during
with an indexed formula using a combination the first stage of the project.
of the European Title Transfer Facility and Mohammad Seghiri, the CEO of Sound
United States Henry Hub benchmark indexes,” Energy, expressed satisfaction with recent
the statement added. developments. “We are delighted to announce
The other agreement slated for discussion the signature of these heads of terms and the
provides for the Moroccan firm to help finance award of exclusivity for the purchase of LNG
the Phase 1 Development project at Tendrara. from the TE-5 Horst,” he said, according to
The proposed terms involve a share sub- the company statement. “In spite of challeng-
scription under which the partner would pay ing current market conditions, we have made
GBP2mn ($2.46mn) for 159,731,651 new shares significant progress, and these heads of terms
in Sound Energy at a price of GBP0.01251 each. mark an important step forward towards the
The Moroccan company would also take out a delivery of the Company’s phase 1 production
secured commercial loan worth $13.5mn, with development plan for the TE-5 Horst at the
a coupon of 11% and a term of 12 years. Tendrara Concession.” ™

FAR defaults on development

cash call from Sangomar JV

SENEGAL AUSTRALIA’S FAR reported last week that it to preserve its cash reserves while it waits for the
had not responded to a request to help cover operator, Woodside Energy, to finish drawing up
operational costs at the Sangomar block offshore new budget plans. It also acknowledged, though,
Senegal. that its actions posed some risk.
In a statement, the company said it “[had] “Under the JOA [joint operating agree-
not paid the most recent development cash call” ment] default provisions, if a defaulting party
from RSSD, the joint venture set up to develop has not fulfilled its financial obligations within
the block. As a result, it noted, the venture’s oper- six months from the date of notification of the
ator has declared FAR’s Senegal-based affiliate to default, it shall forfeit its participating interest
be in default. without compensation,” FAR said. The same
The Australian company indicated that it had provisions call for unpaid cash calls to “accrue
taken this step within the framework of its effort interest at the LIBOR rate plus 2%,” it added.

P12 www. NEWSBASE .com Week 26 01•July•2020