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Sound Energy strikes savvy deal with Moroccans

Last updated: 20:32 23 Sep 2016 BST, First published: 07:39 23 Sep 2016 BST

BP_north_american_gas_opt
The company is drilling for gas in Morocco.

Sound Energy PLC (LON:SOU) has re-negotiated the headline acquisition terms for a 50% stake in the Sidi Moktar assets in Morocco, sealing a deal that could provide a £3mln boost to its coffers at last night’s share price.

To fulfil the agreement, inked in March, the company said it would hand over around 21.3mln shares to vendor PetroMaroc.

Since then the share price has rattled up from under 17p to 78.75p as of last night’s close.

That would put the headline value of the purchase at £16.7mln.

Under the new terms, PetroMaroc will receive all the proceeds from the ultimate share sale up to 50p. Anything above that will be shared equally.

The date for the completion of the deal has been extended to the end of December.

House broker Cantor Fitzgerald noted: "Sound’s share price has increased substantially following the success of its TE-6 well at Tendrara and therefore the value of the consideration has increased commensurately.

It added: "We believe this is a sensible arrangement given the circumstances and we are encouraged by how amicable the situation has been resolved."

The broker repeated a 'buy' and targets a price of 101p.

Shares today rose 10.48% to stand at 87p each.

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