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Statement from Executive Chairman Graham TE-5 discovery, including the approval of the period. As at [June 30, 2020], the Company had
Lyon: “Despite the challenging business envi- EIA mentioned above along with progression total cash balances of GBP4.2mn [$5.41mn]
ronment brought on by the COVID-19 global of discussions to obtain pipeline corridor rights. and, subsequent to the period end, the Com-
pandemic and exacerbated in the oil and gas Despite the difficulties imposed by the COVID- pany placed 163,529,411 new ordinary shares
sector by a dispute between Russia and Saudi 19 pandemic, positive discussions with ONEE at a price of GBP0.02125 [$0.027] per share to
Arabia, which led to an increase in supply just as have continued in order to finalise the fully raise GBP3.2mn [$4.13mn] after costs in August
demand was falling due to the economic impact termed GSA for gas offtake. This will form a key 2020.”
of the pandemic, the first half of 2020 was an building block to support project sanction of the Sound Energy, September 13 2020
active and productive period for the Company as proposed TE-5 Phase 2 development.
it reset its strategy to transition towards becom- “In January 2020, the Company announced
ing a cash generating Company with significant receipt of the EIA approval from the Moroccan INVESTMENT
exploration potential. The period concluded Ministry of Energy, Mines and Environment to
with the announcement of a key milestone, that build and operate a 120km 20-inch gas pipeline British business urged to
the Company had entered into a heads of terms connecting the CPF to the Gazoduc Maghreb
with, and granted exclusivity to, a Moroccan Europe pipeline (GME). This was followed by seek opportunities in Libyan
conglomerate, to provide partial financing for the ministerial approval of the EIA for the CPF
its Phase 1 micro-LNG project and for the pur- in March. Approval of the respective EIAs are oil and gas sector
chase of the LNG produced from the TE-5 Horst important steps in the development process of
under the first phase of development. In addition the TE-5 Horst. The EIA incorporates the Micro Libya’s National Oil Corp. (NOC) Chairman
... the Company also received EIA approval for LNG project activity. Mustafa Sanalla on September 10, 2020, set out
the Tendrara Gas Export Pipeline and Central “The Company continues to manage its cash the enormous opportunities that Libya offers to
Processing Facility (CPF) whilst continuing to resources prudently and, accordingly, having internationally competitive UK companies in its
progress the finalisation of binding terms for paused its operational programme in 2019, the oil and gas sector. Projects worth many billions
the proposed Gas Sales Agreement (GSA) with Company continued a structural cost reduc- of dollars could be issued over the coming years
Office National de l’Electricité et de l’Eau Potable tion programme aimed at materially reducing if the current oil blockade can be lifted and a sta-
(ONEE) for the second phase of development of the Company’s ongoing operating expenditure, ble Libyan government established, he stated.
the TE-5 Horst. including reductions in staff numbers, executive The Chairman was addressing the influential
“The Company announced in July 2020 that remuneration and other business costs. By the Libyan British Business Council in London.
it is no longer in discussions with the previously end of the reporting period, the cost reduction Yet Chairman Sanalla also warned that UK
proposed purchaser in relation to the potential initiatives that have been implemented deliv- companies could only benefit from a stable rule-
partial disposal of its Eastern Morocco portfolio; ered a reduction in general and administrative of-law environment in the Libyan economy if
however, having announced its phased develop- expenses by 57% compared with the first half of the international community helped Libyan
ment strategy for the Tendrara Production Con- 2019. leaders to create it. And in this effort, the UK
cession, the Company continues to engage with “The Company announced in July that it had had a crucial role to play, not just in reaffirming
other parties who have expressed interest in par- successfully concluded a renegotiation of the principles and publicly expressing support, but
ticipating in the Company’s strategy by way of terms of its Anoual Exploration Permit in order in actively pressing for solutions and countering
a potential farm-in. Whilst a partial disposal of to realign the Company’s committed exploration those countries which wanted to control Libya
its Eastern Morocco portfolio is not a strategic work programme in Eastern Morocco so that it for their own ends, he said.
priority of the Company, normal business devel- dovetails more efficiently with the proposed “We know that UK companies will win
opment discussions are ongoing in this regard. phasing of our Phase 1 Development Plan at the highly profitable business in the oil and gas sec-
There is no certainty that any of these discussions Tendrara Production Concession in a manner tor in Libya if there is a level playing field. But
will advance and the Company’s current key pri- that underscores both our confidence in the not all of the countries involved in Libyan affairs
ority is to deliver a final investment decision on potential of the basin as a future significant gas at this point want to see a level playing field. The
its proposed Phase 1 development of the Ten- producing province and our ability to deploy UK Government needs to take an active role
drara Production Concession during 2020. capital judiciously across the portfolio. in ensuring the current oil blockade is lifted. It
“In June, the Company was pleased to “In February, the Company announced the needs to play its part in creating a fair and just
announce that heads of terms had been entered appointment of myself, Graham Lyon, as Exec- Libyan society based on the rule of law if British
into with a Moroccan conglomerate to permit utive Chairman. The Company was pleased to companies are to thrive in the Libyan market.”
exclusive discussions to negotiate definitive subsequently appoint Mohammed Seghiri as NOC, September 10 2020
agreements for both the purchase of LNG to be Chief Operating Officer in April. Mohammed
produced from the TE-5 Horst as well as partial brings extensive technical and commercial
financing for the Phase 1 development by the experience, as well as Moroccan knowledge and
Moroccan conglomerate. An LNG Gas Sales relationships which will be utilised in particular
Agreement is currently being negotiated pursu- to drive forward the Company’s phased devel-
ant to which the joint venture will commit, over opment strategy in Eastern Morocco. In July, the
a 10-year period, to supply an annual contractual Company announced further board strength-
quantity of 100mn cubic metres of (liquefied) gas ening with the appointment of David Blewden
from the Phase 1 development, based upon the as an Independent non-executive director.
key commercial terms set out in the heads of David brings a wealth of experience from the
terms. financial side of oil and gas sector and specific
“The Company continued to make progress experience around debt restructuring which is
in advancing the development of the Tendrara a key priority for the Company in the coming

Week 37 16•September•2020 www. NEWSBASE .com P19