Sound had already seen material successes in Morocco, most notably at the Tendrara project, and earlier this week, the company announced plans to accelerate new exploration drilling.
Thursday brought the definitive milestone in the company’s focussing on Moroccco, as it unveiled plans to spin-out the entire Italian portfolio.
Chief executive James Parsons is to chair Coro Energy, a reboot of AIM-peer Saffron Energy, which is absorbing the Italian assets from Sound as well as the portfolio of Saffron associate Po Valley Energy.
Such is Sound’s intent to focus on Morocco, the company won’t even keep the new shares it will receive for the Italian assets – instead, the 33.3% stake in the new enlarged will be redistributed to Sound’s shareholder base.
“This transaction will provide an elegant exit from our Italian activities thereby delivering strategic focus for our province opening activities in Morocco and enabling Sound Energy shareholders the opportunity to continue their participation in an early stage consolidated but growth focused Italian E&P company," Parsons said in a statement.
Advancing Morocco assets
On Wednesday, Sound detailed a new three-well drill programme planned in Eastern Morocco, where it intends to follow up recent successes at the Tendrara project.
At Tendrara, the company sees just over 1 trillion cubic feet of gas resources while the broader eastern Morocco acreage is estimated to host some 17 trillion cubic feet and a new accelerated drill programme will target ‘high impact’ locations.
The aim is to unlock more of the areas that contribute to the wider estimate.
It will kick off with a well on the ‘A structure’, located some 25 kilometres north-west of Tendrara’s TE-5 well, where the company is targeting between 0.4 and 1.2 trillion cubic feet of gas.
Sound’s second new well will be positioned 20 kilometres north-east of TE-5, at a location named North East Lakbir. This larger target is an extension of the TAGI play and it is estimated between 1.2 TCF and 5 TCF, with the mid-case estimate set at 2.6 TCF. Less detail is given for the third target which is described as “a Paleozoic test beneath the TE-5 Horst”.
Sound expects each of the three wells in programme will cost around US$10mln.
Parsons, in a statement, said: "Sound Energy is now approaching another exciting period of back to back drilling in Eastern Morocco.”
“The three well exploration programme we are announcing today has the potential to significantly increase the core value of our Moroccan acreage and to establish Eastern Morocco as a prolific but low cost gas province, on the doorstep of large and growing energy markets."