Sound Energy on Thursday announced that it has signed a binding agreement to acquire PetroMaroc’s 50% working interest and operatorship of the Sidi Moktar Licences in Morocco

The Sidi Moktar Licences cover 2,700 km² in the Essaouira basin in central Morocco and holds the Kechoula gas find in the Lower Liassic, where two wells have been spud and a future extended well test is expected before the commencement of commercial production.

Upon completion of the acquisition, Sound Energy will issue 21,258,008 new ordinary shares to PetroMaroc as contemplation and a 10% net profit interest in any near term profits from the Kechoula find as well as a 5% net profit interest in any future cash flows from structures within the Sidi Moktar Licences excluding the Kechoula find.  

After the acquisition, Sound Energy will hold 75% of the Sidi Moktar Licences through its 100% owned subsidiary, Sound Energy Morocco South.

Meanwhile, the company also entered into a Heads of Terms with Culebra Petroleum for the sale of 66.67% of its subsidiary; Sound Energy Morocco South. Through the sale Culebra Petroleum is eligible to 50% working interest in the Sidi Moktar Licences.

As consideration for the acquisition, Culebra Petroleum will pay Sound Energy $6 million in cash and pledge to an investment programme worth about $18 million on the Sidi Moktar Licences and take up 90% of the net profit interests awarded to PetroMaroc as part of the acquisition while Sound Energy will pay the remaining 10%.

However, Sound Energy Morocco South will still be the operator of the Sidi Moktar Licences while both Sound Energy and Culebra Petroleum will cooperatively supervise all operations.

“The combination of these two transactions will position Sound Energy with an effective 25% working interest in Sidi Moktar with a carry to $18 million (100%) from an aligned and well-funded partner and an additional $6 million of cash, with which to continue Sound Energy's counter cyclical growth strategy,” James Parsons (photo), Chief Executive of Sound Energy told Engineering news.

Anita Fatunji