Sound Energy drops after poor exploration results and deepened loss

Shares in Sound Energy dropped on Thursday as the oil and gas explorer said a disappointing period had seen poor results from two exploration wells and a deepened interim loss.

The six months ended 30 June saw Sound Energy safely complete the first two wells of its 2018/19 Eastern Morocco exploration campaign on budget but both wells failed to achieve commercial gas flow rates.

Even so, the company is now exploring monetisation options for the Eastern Moroccan portfolio and said it remained confident in its potential following the drilling of five wells and the interpretation of new seismic data, saying that it contains a number of high impact opportunities and plays.

The group said progress is continuing in the advancement of the Tendrara TE-5 development, where front end engineering design work is ongoing and talks are underway over a possible gas sales agreement.

The AIM-traded company has yet to record revenue and booked a loss before tax of £11.5m compared to a loss of £3.4m in the same period the year before.

After raising £2.4m via an equity sale in June, cash and cash equivalents stood at £11.1m at the end of the period, down from £20.5m at the end of December.

Sound Energy shares were down 7.59% at 8.10p at 1149 BST.