A flash blog this morning on Sound Energy who have announced the acquisition of the Sidi Moktar licences from Maghreb Petroleum. This deal had been announced on 22nd October 2015 as an option which has since been deemed unnecessary. Sound has acquired a 25% WI in three onshore gas permits which contain a material existing gas discovery in Kechoula and exploration prospects. Sound are also carried until first gas on the licences so will save significant expenditure but should the operator find the going hard it is easy to imagine a change of management.
This is Sound’s second asset in Morocco, they also have -uncorrelated- Tendrara in which they are in partnership with Schlumberger, indeed it is easy to imagine a situation whereby the partnership might work at Sidi Moktar as well.
Sound are paying for this with 21.7m shares plus a 1.6% NPI on future cash flows from Kechoula, which given the robust nature of the stock is good management and a prudent use of cash reserves. Sound management are continuing to broaden the portfolio across the region and despite a difficult market finding opportunities which arise from distressed sellers of assets.
Whilst on the subject of management, the company has strengthened the executive with two new non board appointments. Leonardo Salvadori joins as Business Development Director and Mary Hood as CFO.