Sound Energy looking to extend Tendrara gas sale negotiations

Sound Energy updated the market on the Tendrara Gas Sales Agreement memorandum of understanding on Wednesday, confirming that it was seeking an extension to negotiations.

The AIM-traded firm had announced on 30 October that it had, in relation to ongoing negotiations over a gas sales agreement for the sale of natural gas production in the Tendrara concession in eastern Morocco, entered into a binding memorandum of understanding with Morocco's Office National de l'Electricité et de l'Eau Potable (ONEE) - the state power company of Morocco.

That was on behalf of its partners, including Morocco's L'office National des Hydrocarbures et des Mines.

Under the memorandum, as amended in January, the parties agreed to use their “reasonable endeavours” to continue negotiations, with a view to entering into a binding gas sales agreement, incorporating the key terms of the memorandum as announced in October and construed under Moroccan law, by 31 March.

The company confirmed on Wednesday that gas sales agreement negotiations were continuing, and announced that it was in the process of agreeing a further amendment to the memorandum of understanding with ONEE in order to extend the period for negotiations of the final gas sales agreement to 30 June.

“Whilst the amendment has been agreed in principle, Covid-19 related travel restrictions have meant that it has not yet been possible for the parties to enter into the amendment and, as a result, the parties intend to enter into the amendment as soon as is practicable,” the Sound Energy board said in its statement.

At 1157 BST, shares in Sound Energy were up 10.63% at 1.15p.