Sound Energy raises £24.1m for Tendrara development activity

Upstream gas company Sound Energy confirms fully-underwritten offers to raise £24.1m, gross, by the issue and allotment of 29.8m new shares at 81p each.

It said net proceeds of the offers would be applied to development activity on Sound Energy's Tendrara licence, onshore Morocco.

"The proceeds of this fund-raise will materially fund our forthcoming development at Tendrara and provide us with a commercially advantaged position across multiple negotiations," said chief executive James Parsons in a statement.

Earlier on Thursday, AIM-quoted Sound Energy, which is focused on Europe and Africa, confirmed a successful second well at Tendrara. TE-7 was drilled successfully to a total measured depth of 3459m, corresponding to a vertical depth of 2611m.

TE-7 has a total contact length through the TAGI reservoir of some 837 metres, including a 700 metres sub-horizontal section.

As a result, Sound Energy said it had achieved a gas-flow rate towards the end of the clean up process, post stimulation, of 32 MMscf/d with a flowing tubing head pressure of 230 bar on a choke of 40/64.

This rate was significantly above the company's pre-drill expectations.

"Based on the clean up phase, the well's potential is predicted by the Company to be significantly above 40 MMscf/d with a 50% drawdown," Sound Energy said.

"The Company will now proceed with the planned extended well test of TE-7 to confirm production sustainability and to aid comprehensive field development planning," it added.

"The TE-7 bottom hole reservoir pressure and its correlation with the gas gradient of the other Tendrara wells will be announced after conclusion of the the extended well test."

At about 11:50 GMT, shares in Sound Energy were down 1.23% to 80.5p each.