Commercial gas discovery in Tendrara
An Aim-listed oil and gas explorer will today claim that its prospects could be “transformed” after making a “material” discovery with a well in Morocco.
Sound Energy, which is a member of London’s junior market, will confirm that the gas encountered by its TE-6 onshore well in the Tendrara licence in the north east of the country is a “significant” discovery and is flowing at “a highly commercial rate” of 17.5m standard cubic feet per day.
The company will now press on with its second well in the licence area and is planning a third for later in the year.
LSE’s Alternative Investment Market
Sound Energy is listed on the LSE’s Alternative Investment Market Credit: Phil Toscano/PA Wire
“I am absolutely delighted to confirm a material commercial gas discovery at Tendrara,” said James Parsons, Sound’s chief executive who has previously spent 12 years working for oil major Royal Dutch Shell.
He claimed that Tendrara together with the adjacent Meridja permit area, in which Sound also has a stake, “have the potential to be a material hydrocarbon province on a regional scale and therefore to transform both Sound Energy and the Moroccan gas industry”.
Confirmation of Sound’s find at the Tendrara licence, in which it owns a 27.5pc stake, has been highly-anticipated by investors, with the explorer’s shares almost trebling in the last month to 59¾p, valuing the company at about £315m. The company will say today that the flow rate of TE-6 is “significantly above initial expectations”.
Sound’s partners on Tendrara include the American oilfield services giant Schlumberger and Morocco’s Oil & Gas Investment Fund. The explorer also has assets in Italy.