Sound Energy to Sell Interest in Eastern Morocco Assets to Privately-Held U.K. Company

Updated 1 year 7 months ago

Sound Energy has entered into a non-binding agreement with, a privately-owned, U.K. registered company which will result in the sale of a substantial proportion of the company's interest in the Eastern Morocco portfolio while retaining a carried interest, subject to shareholder approval. Sound has granted to the buyer an exclusivity period expiring on February 14, 2020 subject to due diligence and a binding agreement for the sale of 51% (24.2% out of a total of 47.5%) of its share in the portfolio for a total consideration of USD 112.8 million, consisting of a 54.3 million cash consideration payable in tranches and an estimated 58.5 million carry for future capital expenditures for its retained interest in the Tendrara concession in order to achieve first gas.

Sound will retain a 23.3% share of the Eastern Morocco portfolio synthetically through a new joint venture. The company will also provide the buyer with a one-year option to acquire a further 9% of Sound's remaining interest in portfolio on the same terms. Exercising the option will reduce Sound's interest to 14.3%. The cash consideration will be payable in three tranches: 55% on completion of the transaction, 30% at the final investment decision (FID), and 15% within 60 days of the delivery of first gas production from the concession.