Sound Energy partners with OGIF, expands reach in Morocco

Sound Energy was expanding its reach in Morocco on Monday, signing an agreement with Oil & Gas Investment Fund (OGIF) for an option to acquire a 55% interest on OGIF's onshore Meridja permit.

The AIM-traded upstream gas company said Meridja was adjacent to its existing Tendrara licence, and was a highly prospective 9,000 square kilometre area with the same fundamental geology as its neighbour.

Sound Energy was due to drill its first well at Tendrara in the coming months.

OGIF currently held a 75% interest in a reconnaissance permit over the Meridja area, with the remaining 25% held by Morocco's Office National des Hydrocarbures des Mines.

As consideration for the option, Sound Energy would pay OGIF $100,000 (£68,965) and would conduct and fund early stage commitments under the Reconnaissance Permit, up to a maximum of $200,000.

On exercise of the option, Sound Energy would pay OGIF another $150,000, and would carry OGIF and the Office National des Hydrocarbures des Mines for costs up to the end of a first Meridja exploration well.

"Following our entry into Morocco last year, we have moved quickly to build our regional position further in a highly prospective area", said Sound Energy chief executive James Parsons.

He said the option secured exclusive access to a key permit adjacent to Sound Energy's Tendrara licence, and would enable the company to increase its upside potential significantly should the first well at Tendrara be as successful as hoped.

"The transaction further demonstrates our strong partnership with OGIF, and further consolidates our position as a leading onshore operator in Morocco", Parsons concluded.

The reconnaissance permit carried an expiry date of 1 August 2016. It was recently extended by OGIF, Sound Energy's board confirmed.