Sound Energy PLC (LON:SOU) has signed a memorandum of understanding to sell natural gas from its Tendrara licences to Morocco’s state power company.
A detailed gas sales agreement is still under negotiation, but Sound said this is a binding agreement and the ongoing talks will incorporate the MOU.
The aim is to get a final agreement signed by the end of the year.
This agreement covers the first 0.5 billion cubic metres (bcm) per annum - approximately 48.4 million cubic feet per day (cf/d) - from Tendrara with payment for any production above this to be part of the final gas sales agreement.
Sound will also get a fixed price for a minimum annual volume of 0.3 bcm per annum (approximately 29MMscf/d).
That will lead to first-year gross revenues of US$84mln with the fixed price element designed to give more certainty when it comes to arranging the funding needed for the hook-up infrastructure.
Sound put its East Morocco operations up for sale earlier this year after two new wells failed to achieve commercial rates of gas production.
Shares in Sound were 2.8% higher at 7.30p in early afternoon trading.
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