Sound Energy PLC (LON:SOU) told investors it is financially well positioned for the remainder of 2019, as it reported results for last year.
The explorer said that it ended December with £20.5mln of cash.
It invested some £12.4mln during 2018, with most of the funds spent on the TE-9 and TE-10 wells operations. In the year, there was a £12.2mln injection of funds raised by the issue of equity.
Some £4.1mln of exploration costs were reported, mainly related to TE-9 exploration well which did not encounter producible gas. TE-10 drilling did not begin until December.
Admin costs came in at £8.9mln, which was slightly higher than the year before.
Sound reported an £11.7mln loss from continuing operations. During the year it disposed of its Italian assets via two-legged transactions, the portfolio was sold to Coro Energy in a paper deal and subsequently Sound released the equity across its shareholders.
READ: Sound Energy continues ‘positive talks’ over gas sales deal
Attentions are now focussed on Morocco and the Tendara assets, which comprise both the field development in production concession area and upside in the exploration area.
Operational highlights for 2018 include securing the 25-year production concession for the existing Tendrara discoveries, the restart of exploration drilling, and the signing of heads of terms with a Spanish consortium in relation to infrastructure development.
Significantly, the company brought partner Schlumberger directly into Tendrara – with the field services major taking interests at a project level. Schlumberger led and paid for a US$27.2mln seismic programme, which began in August.
The unsuccessful TE-9 was followed by the drilling of TE-10, which got underway in December, which subsequently observed a potential gross reservoir interval across around 100 metres and further operations are expected to see both unstimulated and stimulated well testing during the current financial year.
For the field development project, efforts are currently focussed on securing a gas sales agreement before the project advances.
“Positive discussions have continued to progress the gas sales agreement (GSA) for offtake which forms a key building block to support project sanction,” Sound said in the results statement.
“The company expects to sign binding GSA terms shortly.”
Elsewhere in Morocco, the company continues to work on the Sidi Moktar project. In June it secured a new eight-year licence and the present focus is on the completion of an environmental impact assessment for a proposed seismic exploration programme.
Sound is assessing whether to farm-down its stake in the project, to bring in a part to support future work programmes.