REG - Sound Energy PLC - Update re Moroccan Tax Administration Notification

Sound EnergyAnnouncement

14/09/2022 14:00

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RNS Number : 4807Z  Sound Energy PLC  14 September 2022

14 September 2022

 

Sound Energy plc

("Sound Energy", the "Company" and together with its subsidiary undertakings
the "Group")

 

Update re Moroccan Tax Administration Notification

 

Sound Energy, the transition energy company, provides an update further to its
announcements of 1 June 2021 and 7 September 2022 with respect to its wholly
owned dormant affiliate Sound Energy Morocco SARL AU ("SEMS") and the Moroccan
Tax Authority's decisions regarding purported historical taxable events
relating to SEMS.

 

The Local Taxation Committee has upheld the previously notified assertions of
the Moroccan Tax Authority in respect of Moroccan taxes purported to be due
pursuant to a tax audit undertaken on SEMS by the Moroccan Tax Administration
during 2021 and related to fiscal years 2016 and 2017.

 

The Local Taxation Committee has, in upholding the Moroccan Tax Authority's
prior decisions, confirmed that certain purported historical intra Group
transactions between SEMS and SEME have taxable base values as per the
original tax administration claim as previously informed.

 

The Local Taxation Committee has not presented a full calculation of the
amounts it purports to be due on the taxable base amounts it has now upheld.
However, Sound Energy estimates taxes on those taxable base amounts, as
previously announced on 7 September 2022, would amount to approximately US$
19.7 million (reduced from the Company's 1 June 2021 assessed amount of US$
22.5 million due solely to exchange rate fluctuations).

 

The Company has 60 days to respond to either accept or challenge the findings
of the Local Tax Committee in the Moroccan courts.

 

The latest decision by the Local Tax Committee in relation to SEMS is in
addition to the Moroccan Tax Authorities claims against SEME, the status of
which was most recently notified by the Company on 13 July 2022.

 

Further announcements will be made, as appropriate, in due course.

 

Commenting, Graham Lyon (Executive Chairman) said:

 

"The Tax Authority continues to frustrate the Company's progress in Morocco,
detracting its efforts away from satisfying the Moroccan need to provide gas
to its power stations. One of the attractive features of Morocco from an
industry perspective is its investment promoting fiscal code as laid out with
the Hydrocarbon Code. This includes a 10-year exemption from corporation tax
for upstream producers, as well as clearly defined import duty and VAT
exemptions. With Sound Energy deep into its micro-LNG project development and
on the cusp of sanctioning a large pipeline development these distractions are
jeopardizing their successful undertaking.

 

 

For further information please contact:

 

 

 Vigo Communications - PR Adviser       Tel: +44 (0)20 7390 0230

 Patrick d'Ancona

 Finlay Thomson

 Sound Energy                           chairman@soundenergyplc.com (mailto:chairman@soundenergyplc.com)

 Graham Lyon, Executive Chairman

 Cenkos Securities - Nominated Adviser  Tel: +44 (0)20 7397 8900

 Ben Jeynes

 Peter Lynch

 SP Angel Corporate Finance LLP         Tel: +44 (0)20 3470 0470

 Richard Hail

 

 

 

The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.

 

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