Early stage logs from Sound Energy’s (LON:SOU) first well at Tendrara, onshore Morocco, have indicated gas bearing levels and it is readying to drill a second well.
The preliminary petrophysical analysis showed a total net pay of 28m in the TAGI reservoir, which Sound said was ahead of its initial expectations.
Further details will be released when the well and testing are completed, Sound said.
The company added that in anticipation of drilling a second well at Tendrara, it has applied for the first complementary period under the licence terms. This period triggers a commitment to a second well.
In addition, Sound has also exercised its option to acquire a 55% participating interest in the Meridja exploration permit, which sits adjacent to the Tendrara licence.
It covers an area of 9,000 sq km with the same fundamental geology as Tendrara.
The drilling at Tendrara is being funded through a partnership with US oil services giant Schlumberger.
The US firm will fund 80% of the investment in the first hole and 75% of the second and third.
Broker Cantor said that the Tendrara well (TE-6) was drilled to total depth of 2,665m and the result being ahead of expectations was material in terms of the company’s chances of unlocking the play.
"We continue to highlight to investors that success at Tendrara could be transformational for Sound, with current resource estimates suggesting 310.5Bcf (51.8MMboe) recoverable gross contingent resources and 145.8MMboe of prospective resources.
"The rig will now de-mobilise from the TE-6 location and move to the already prepared TE-7 site on stand-by."
Shares rose 4% to 17p.
--updates for broker comment --