The technical analyst reckons the share price could rise to re-test the highs of around 100p per share.
Mir, in a Tip TV segment for Proactive Investors, said: “As far as the price action is concerned, you can see that we’ve had the big rally, effectively from the beginning of July through to the middle of September. Since then we’ve been in consolidation mode,” Mir said in a Tip TV segment for Proactive Investors.
He added: “if you are cautious on the shares, if you wait for a break of the September resistance line at 82p before going long again.”
Mir also noted that those that are bullish on the stock ought to keep an eye on a zone of support at around 70p, as below that level he would question whether the best of the rally was over.
Sound Energy’s breakthrough success in Morocco
The AIM quoted group’s breakthrough performance has been triggered by success at the undeveloped Tendrara gas field in Morocco, where two new wells have redefined the project pointing to a significant gas resource.
Results from the most recent Tendrara well, released last week, showed gas flow rates were significantly better than prior estimates.
A total of 8.8mln standard cubic feet a day was produced from just 28% of the gross reservoir interval without the need for stimulation. The plan now is to complete the planned mechanical stimulation and well test of the entire horizontal section.
Flow rates from this process are expected in the middle of the month.
“Thereafter the company will initiate the planned extended well test to confirm production sustainability and to aid comprehensive field development planning,” Sound told investors.
TE-7, as the company’s second well is called, was drilled to just under 3,500 metres. It is contact with the TAGI reservoir which produces the gas for 837 metres, 700 of those run horizontal.
The plan is to establish not just how prolific the well might be, but just how to efficiently drill wells on Tendrara for production.
Tendrara: The story so far
Sound Energy picked up the Tendrara asset last summer and, after adding Schlumberger as a partner later that year, it has never looked back.
A successful drilling programme has been richly rewarded.
Whilst work continues to determine just how big Tendrara is, bringing the field into production remains a key objective too.
Sound Energy recently revealed that it was hoping to produce its first commercial gas from the Tendrara property in Morocco in the first half of 2019.
Tendrara is one of three strategic plays
Aside from Sound Energy’s existing production operations in Italy - which are valuable as cost-covering cash generation - the growth and upside in the Sound Energy portfolio comes from three assets - Tendrara, Sidi Moktar (Morocco), Badile (Italy).
Badile, a potential ‘needle moving’ well in northern Italy, was the main event long before Tendrara and Sidi Moktar were picked up.
Preparations are presently underway for the hotly anticipated drill programme.
A rig is expected on site during the fourth quarter, and according to Sound Energy drilling is slated to start ‘around the end of the year’.
Parsons, in a statement last month, described Badile as one of Sound Energy’s “largest and most strategic assets.”
Badile has a bit of ‘nearology’ to it as it is next to the ENI-run Gaggiano oil field, which is host to around 400mln barrels of crude. In fact ENI originally held the permit and shot some 460 line-kilometres of seismic before surrendering it 12 years ago.
Work in 2013 by the oil and gas reservoir evaluation specialist, ERC Equipoise, confirmed Badile as a potentially high-impact prospect. It reckoned it was worth more than £400mln if hydrocarbons were uncovered in the quantities anticipated.
The figure was based on a gross prospective resource of 178bn standard cubic feet of (bscf) gas and 12mln barrels of gas condensate. That was a “mid-case” estimate. The high and the low cases were respectively 673bscf and 46bscf.
“I look forward to this opportunity to repeat our success at Tendrara," Parsons said last month.