Sound Energy (LON:SOU) has confirmed the acquisition of a 25% stake in the Sidi Moktar project, which comprises three onshore gas permits in Morocco.
It has now signed a binding deal with Maghreb Petroleum Exploration for the transaction which was initially agreed in October.
A previously envisaged option structure for the transaction is no longer deemed neceassary, and it is now acquiring the stake directly.
Maghreb will receive shares in Sound Energy as well as 1.6% royalty on profits from the Kechoula discovery, which is part of the acquired asset.
James Parsons, Sound Energy chief executive, said: "Sidi Moktar is the second material asset in our onshore Moroccan portfolio and secures a 25% interest in an already successfully drilled gas discovery with potential near term production, significant deeper exploration potential and in which we are carried to first gas.”
Sidi Moktar spans 2,700 square kilometres and Kechoula is the most advance area. Two wells have already been drilled and an extended well test, expected in the near term, is awaited before the project can be advanced to commercial production.
Kechoula is located close to existing infrastructure. And, it is estimated to host some 293bn cubic feet of gas.
More broadly, the whole Sidi Moktar area is predicted to have significant exploration potential. Sound Energy says it is estimated to contain in excess of 1 trillion cubic feet of gas.
The company also announced the appointment of new non-board executive appointments.
Leonardo Salvadori, who has formerly run a Danagas joint venture in Egypt, and Mary Hood, previously Gulf Keystone deputy financial officer, have joined the company as business development director and chief financial officer respectively.