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Sound Energy receives funding offer for Tendrara gas pipeline

The offer, from a Moroccan investment bank, could unlock a critical element of Sound's commercialisation plan for the significant Tendrara gas discovery.

Tendrara, onshore Morocco well
As well as this proposal, Sound could also see funding for gas processing facilities

Sound Energy PLC (LON:SOU) told investors that it has received a funding offer for its eastern Morocco gas project.

The indicative, non-binding proposal comes from Advisory & Finance Group Investment Bank (AFG), a Moroccan financial institution that funds Oil & Gas Investment Fund (OGIF), Sound Energy’s partner and soon-to-be major shareholder.

WATCH: Sound Energy buoyed by funding news while 88 Energy investors wait patiently

READ: Sound Energy advances as route to gas commercialisation starts opening up

It proposes to provide some US$60mln to US$100mln to build the envisaged Tendrara Gas Export Pipeline (TGEP) which will be needed to connect Sound Energy’s significant gas discovery to markets in Morocco and southern Europe.

TGEP will be a critical element in the commercialisation of the Tendrara project, Sound Energy highlighted.

Possible funding for gas processing facilities

The company explained that the AFG proposal was made on behalf of a range of institutions, including shareholders of OGIF, and, that some of these investors may also be prepared to support the funding of gas processing facilities.

OGIF is due to formally become a shareholder in Sound Energy before the end of the third quarter, upon conclusion of previously announced transactions, which will see Sound Energy increase its footprint in the region surrounding Tendrara in exchange for equity.

Quick facts: Sound Energy PLC

Price: 0.9774 GBX

Market: AIM
Market Cap: £11.36 m

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Investor Update: Sound Energy agrees deal to sell stake in East Morocco

Headlines from the Proactive UK newsroom. Sound Energy (LON:SOU) has signed a preliminary agreement to sell just over half its stake in its Tendrara licences in East Morocco for US$113mln. The consideration is US$54mln cash and the rest is a carry for future capital...

on 6/11/19

2 min read