Page 13 - DMEA Week 31

DMEA LNG DMEA

Sound raises funds for

Moroccan gas plans

MOROCCO LONDON-LISTED Sound Energy has raised The Moroccan partner is expected to provide
GBP2.75mn ($3.6mn) from a share issue, as it partial financing for the plant by subscribing
The company wants looks to advance a small-sized gas liquefaction for over 159.7mn shares in Sound for GBP2mn
to produce LNG to project in Morocco. ($2.5mn), the UK company said at the time. It
monetise its gas sooner. The company issued 129.4mn shares, and could also provide a $13.5mn commercial loan.
intends to place a further 82.4mn to generate an According to Sound, the future contract is
extra GBP1.75mn ($2.19mn) in funds. Proceeds expected to cover the supply of 100mn cubic
will be used to shore up Sound’s cash position, it metres per year of gas over a 10-year period, with
said in a statement on July 29. a take-or-pay commitment of 90 mcm per year.
Following the placing, Sound said it now had The price of this gas will range between $7 and
enough cash to meet its working capital require- $9 per mmBtu.
ments up until March 2021. This will allow the In its statement last week, Sound also noted
company to push ahead with development plans that it had ended discussions with a potential
at the Tendrara concession in eastern Morocco, farm-in partner for its operations in eastern
its flagship asset. Morocco. It said it was still engaging with other
Despite the coronavirus (COVID-19) pan- likely farm-in partners, however.
demic and its impact on oil and gas markets, “Today’s placing and the announcement of
Sound said in late June it aimed to take a final an opportunity for existing shareholders to par-
investment decision (FID) on Tendrara’s first ticipate under the same terms and conditions
phase in the second half of 2020. It intends to provides Sound with a stronger financial base to
exploit gas at the concession’s TE-5 Horst field by progress our planned activities,” CEO Graham
construction a 120-km pipeline to markets. But it Lyon commented. “We have confidence in our
also wants to produce LNG on a small scale start- strategy to bring Sound into a cash generating
ing in 2021, in order to generate revenues sooner. position and look forward to updating the mar-
Sound also said last month it had entered ket as future milestones are met.”
exclusive talks with an unidentified Moroccan Sound has a 47.5% stake in Tendrara, while
conglomerate for LNG sales. The pair signed a US oilfield services giant Schlumberger holds
heads of terms (HoT) agreement, giving them 27.5% and Morocco’s state-owned resources
until the end of 2020 to finalise a supply contract. agency ONHYM owns 25%. ™

Week 31 06•August•2020 www. NEWSBASE .com P13