Sound Energy (LON:SOU) has started drilling its first well at Tendrara, onshore Morocco.
Spudding took place on 20 April with the drill expected to reach a measured depth of 2,640 metres with coring, logging, completion and testing all parts of the programme.
Final results will be announced after the end of drilling and testing operations, approximately 80 days after the spud day.
James Parsons, chief executive, said it was a significant milestone for the company and should unlock Eastern Morocco's regional gas play and significantly broaden Sound Energy's resource base.
Sound has an agreement with Schlumberger to carry out the drilling at Tendrara.
The US oilfield services giant has agreed to fund 80% of the investment in the first hole and 75% of the second and third. After that the partners will bankroll further field development on a 50-50 basis.
Broker Cantor Fitzgerald added that the spud marks the first of a two-well programme at the Tendrara gas field.
The first well is expected to cost approximately £9.2mln gross (£1.84mln net to Sound).
Under the arrangement with Schlumberger Sound’s financial exposure is only £2.3mln for the two wells.
This is a potentially significant play for Sound with current resource estimates suggesting 310.5Bcf (51.8MMboe) recoverable gross contingent resources and 145.8MMboe of prospective resources.
Cantor estimates net asset value is 25p based on the discovered resource base and financial assets.
Shares rose 1% to 16.4p.
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