Sound Energy finalises sale of Morocco East subsidiary
Sound Energy
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16:55 11/12/24
Shares in Sound Energy were surging on Wednesday, after it finalised the sale of its Moroccan subsidiary, Sound Energy Morocco East (SEME), to Managem in a transaction worth up to $45.2m.
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The AIM-traded firm said the strategic divestment, initially announced in June, would allow it to retain significant interests in its Moroccan energy projects while benefiting from funding commitments to advance development and exploration.
Following the sale, Sound Energy retained a 20% interest in the Tendrara production concession and 27.5% working interests in the Grand Tendrara and Anoual exploration permits.
Under the agreement, Managem would provide funding for Sound Energy’s share of the planned phase two development of the Tendrara Concession, as well as financing the drilling of two exploration wells in the Grand Tendrara and Anoual Permit areas.
The arrangements would ensure that development and exploration efforts would proceed without requiring additional capital outlay from Sound Energy.
Sound said the terms of the deal included up to $24.5m to fund Sound Energy’s retained interest in the phase two development of the Tendrara concession.
Managem also committed to covering $3.6m and $2.6m for Sound’s share of drilling costs in the Grand Tendrara and Anoual exploration areas, respectively.
Additionally, Sound Energy would receive a contingent payment of $1.5m within a year of first gas from the Tendrara concession’s phase two development.
As part of the transaction, Managem had already remitted $13.06m to Sound Energy for historical costs related to the concession and permits, effective from 1 January 2022.
To ensure a smooth transition, Sound Energy said it would provide operational support to Managem during the handover.
“We are delighted to have completed the sale of SEME, and we are pleased to welcome Managem as its new owner,” said executive chairman Graham Lyon.
“I would like to thank all those involved from both companies, our advisors, ONHYM and the Ministry of Energy.
“This is a transformative transaction for Sound Energy, unlocking significant value and we look forward to the new chapter of Tendrara development and exploration activity in Morocco.”
At 1350 GMT, shares in Sound Energy were up 53.85% at 1p.
Reporting by Josh White for Sharecast.com.