REG - Sound Energy PLC - Operations Update

Sound EnergyAnnouncement

17/03/2025 07:15

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RNS Number : 8323A  Sound Energy PLC  17 March 2025

17 March 2025

 

 

Sound Energy plc

("Sound" or the "Company")

 

 

Transition progressing seamlessly, Change of contract with Italfluid GeoEnergy

 

Sound Energy plc, (AIM: SOU) the Transition Energy Company is pleased to
provide an update in relation to the operations at Tendrara:

 

Name Change

 

The subsidiary of Sound Energy plc sold to Managem SA, previously named Sound
Energy Morocco East Limited has formally changed its name to Mana Energy ltd
("Mana Energy" or the "Operator").

 

Exploration: Transition progressing well

 

The Operator is continuing to assemble its subsurface and operational team and
is preparing to commence detailed planning alongside finalising the licence
formalities with the relevant Government Authorities. A joint venture workshop
is scheduled in March, with active participation of the Company, to review the
exploration strategy, the planned exploration targets and to commence the
technical, contractual and regulatory work required to initiate drilling
operations.

 

Tendrara Concession: Seamless work progress & change of contractual scheme

 

The transition of Operatorship has not altered the pace of ongoing activities
at Tendrara with construction of Phase 1 development facility for the TE-5
Horst continuing to move forward towards completion. The procurement and
delivery to site of the gas gathering system equipment required to connect the
two existing production wells, TE-6 and TE-7, to the mLNG facility is
progressing.  The subsurface well control barriers in the two production
wells, whose work over operations were successfully completed last year by the
Company, will be removed and the wells will be brought into production. The
Operator has advised that the completion of the installation of the gas
gathering system and connection to the wells is expected to occur by Q3 2025.

 

Italfluid GeoEnergy Srl ("Italfluid"), the main contractor tasked with
designing, constructing, commissioning, operating and maintaining the mLNG
facility and the Operator (on behalf of the Concession JV) have agreed to
amend their contractual arrangement by terminating the vendor financed lease
agreement announced on 23 December 2020 (the "Lease Agreement") and entering
into an industry standard Engineering-Procurement-Construction contract (the
"EPC Contract"). The past capital payments of approximately US$ 9.5 million
made under the Lease Agreement were acknowledged by Italfluid as part payment
received under the new EPC contract.

 

Under this new contractual scheme, Italfluid has committed to commission the
gas processing and liquefaction plant in Q4 2025.

 

Under the EPC Contract, the Operator, the Company and Morocco's L'Office
National des Hydrocarbures et des Mines ("ONHYM") have now agreed to pay, over
a period of time, US$ 25 million in exchange for a substantial reduction in
operating cost and the removal of the daily rental fees:

 

·    US$ 18 million following a payment schedule in line with the actual
work progress, with staged payments through gas processing plant
commissioning,

·    US$ 7 million paid once the plant is fully commissioned.,

·    Removal of the daily rental fees of US$ 38,000 per day

 

In parallel, the parties are currently preparing an Operations and Maintenance
Contract with Italfluid in order to ensure that the plant will continue to
meet the required production targets in terms of plant availability,
performance and LNG delivery.

 

The shift in contracting methodology from a Lease Agreement to an EPC Contract
will result in an increase of the Net Present Value of the project and
provides the Operator with greater control to achieve the goal of delivering
LNG sales in Q4 2025.  The Company will continue to provide support services
to the Operator as required under the existing Technical Services Agreement
between them.

 

Graham Lyon, Executive Chairman of Sound Energy, commented:

 

"Sound Energy is pleased that ManaEnergy has identified and executed
improvements in project delivery and project economics.  The transition is
going well, and we look forward to drilling activities and gas sales later
this year."

 

For further information please visit www.soundenergyplc.com
(https://url.uk.m.mimecastprotect.com/s/OjM_CAPR3t9B3MLF8hjTGU9M9?domain=soundenergyplc.com)
, follow on X @soundenergy[plc, Linkedin or contact :

 

 Sound Energy plc                                                           chairman@soundenergyplc.com

 Graham Lyon (Executive Chairman)
 Flagstaff Strategic and Investor Communications                            sound@flagstaffcomms.com

 Tim Thompson, Mark Edwards, Alison Allfrey                                 +44 (0)20 129 1474
 Zeus - Nominated Adviser and Broker                                        +44 (0)20 3829 5000

 James Joyce, Alex Campbell-Harris, Gabriella Zwarts (Investment Banking)

 Simon Johnson (Corporate Broking)

 

 

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