Sound Energy PLC (LON:SOU) has said its TE-10 gas discovery in Eastern Morocco failed to achieve commercial flow rates following a stimulated well test.
The AIM-listed firm said it now intended to deploy a downhole gauge to monitor pressure in the well and demobilise the test equipment and crew from the site.
"Whilst clearly disappointed with the outcome of the recent well test at TE-10, the team and I are encouraged to have delivered gas to surface from another TAGI discovery and remain confident in the potential of our Eastern Morocco basin”, said James Parsons, Sound Energy’s chief executive.
“We have now completed the TAGI element of our current exploration programme and expect to update shortly on our forward looking strategy."
Following the conclusion of two exploration wells of its three well programme, Sound Energy said it had initiated a structural cost reduction programme aimed at materially reducing its ongoing operating expenditure. The firm said actions implemented as part of this programme were expected to result in a reduction in general and administrative expenses by over 50%.
The firm is also planning provide an update shortly on plans for the third well in the exploration programme, TE-11. The group said it had a cash balance of over US$14mln as of 14 May.
In mid-afternoon trading on Tuesday, Sound Energy shares were 43.5% lower at 9.8p.