Sound Energy PLC (AIM:SOU, OTC:SNEGF), the transition energy company, has agreed to sell its remaining 20% interest in the Tendrara gas development in Morocco to Managem, the Casablanca-listed mining group, in a deal that will leave it with $11 million of cash.
Shares in Sound Energy fell 33% to 3.13p following the announcement.
The disposal, which has a headline value of $57 million, is structured through the sale of subsidiary Sound Energy Merijda.
It comprises a nominal $1 for the shares plus repayment of shareholder loans advanced to the subsidiary, subject to working capital adjustments.
Sound Energy will use the proceeds to repurchase its outstanding €28.8 million 5% senior secured notes ahead of their December 2027 redemption date, eliminating all balance sheet debt.
Assuming the deal completes on 31 July, the company expects to be left with a cash balance of $11 million (£8.2 million).
Alongside the disposal, Sound Energy is relinquishing its 27.5% non-operated interest in the Anoual Exploration Permit and waiving any rights in the Grand Tendrara Exploration Permit, marking a full exit from its Moroccan portfolio.
The sale requires approval from Sound Energy shareholders, Moroccan regulatory clearances and Managem board approval, with a three-month longstop date from signing.
Sound said the transaction allows the company to refocus on energy transition opportunities and upstream hydrocarbon production outside Morocco as a debt-free entity with improved access to capital markets.
The Tendrara project had faced delays, with first gas originally expected in October 2025 now pushed to the third quarter of 2026, while the project has also been hit by industry-wide inflationary pressures on capital and operational costs.