Sound Energy, Range Resources
Sound has announced that it has signed an MOU for a GSA at its Tendrara concession in Eastern Morocco with ONEE, the State Power Company. It appears to have been worth waiting for as it covers the first 0.5 bcm per annum (approx48.4 MMscf/d ) of production of natural gas with the arrangements for further production above this level. (Including up to and beyond the mid case production rate of 60MMscf/d used in the concession FDP) intended to be negotiated in the final GSA. Importantly, at $8.25/mcf it is a very good price even for Morocco.
This price, and the deal which will, once implemented, result in first year gross revenues attributable to the Tendrara concession (100%) of $84m and can only help the economics in the area. Also by agreeing a fixed price for the initial take or pay volumes the Company will benefit from a portion of its revenues not being subject to fluctuations in the commodity prices which in turn should provide higher certainty for the funding needed for the construction of the infrastructure to achieve production. A very positive development for Sound and encouraging for other Morocco players in the UK oil and gas sector as well.
Range has announced average production for the third quarter of 563 b/d which is up 12% on the previous quarter due to a combination of upgraded storage facilities and completed work overs.
However the main takeaway from the announcements is the reorganisation and corporate tidy up that the company is undertaking. They are selling Trinidad upstream assets, selling some of the rigs, wiping out debt, de-listing from the ASX, having a 100:1 share consolidation and changing the name to Star Phoenix Group. The AGM on November 29th in London will be crucial as some of these matters need approval. All the same, the market asked for change and the company is obliging.