Sound Energy PLC (AIM:SOU) shot up 28% in early trading after saying it has received a conditioned financing offer from its Moroccan lender of 2.365bn dirham (US$237mln) for the next phase of development for its Tendrara production concession.
The maximum financing provided to the newly incorporated Tendrara Production Concession partner special purpose vehicle is proposed to be 100% underwritten by Morocco’s Attijariwafa bank for a 12-year term.
Sound Energy’s executive chairman, Graham Lyon, said: “The majority of the conditions precedent to their offer are to be expected and as a result the company has been advancing a number of these for these for some time.”
He said it will be the first financing of its size for a gas field development in Morocco.
A fixed rate, variable and fully floating interest rate can be chosen with customary margins for hydrocarbon infrastructure development project financing facilities.
The funds will be used for the design, drilling, construction and operation of the wells, a treatment facility and a gas pipeline.
The loan is conditional on governmental and ministerial approvals, tax authority clearance, further due diligence, the amendment of various agreements to lender’s satisfaction, including on governance, gas sales, the pipeline interconnection and the front-end engineering design.
First drawdown from the debt facility is conditioned on a simultaneous capital contribution to ensure maximum gearing of 65%.
The shares, which have topped 2p in recent months but fell to 1.4p yesterday, leapt to 1.85p in early trade before settling at 1.5p.