Sound Energy said its gas discovery in Tendrara, Eastern Morocco through TE-10 well didn’t yield commercial flow rates but the result does not take away from the company’s overall assessment of the Eastern Morocco acreage.
Following the drilling of five wells and interpretation of new seismic data, Sound Energy said the area contains a number of high impact plays.
Sound Energy's portfolio in Eastern Morocco includes the Tendrara production concession and approximately 24,000 square kilometres of exploration acreage. The company is planning to take the final investment decision (FID) on the TE-5 Horst discovery around the end of 2019.
In the surrounding acreage, the company has been following a strategy of high risk and high reward exploration, targeting high potential prospects in both the TAGI and Palaeozoic plays, which the company has internally estimated to include an aggregate exploration potential of up to 20 trillion cubic feet (mid-case) of unrisked gross gas originally in place.
"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, chief executive officer of Sound Energy. “We have now completed the TAGI element of our current exploration programme and expect to update shortly on our forward looking strategy."
Sound said its board believes it is now the right time to explore the monetisation options available to the company in respect of its Eastern Moroccan portfolio and has decided, with support from Rothschild & Co, to market its Eastern Moroccan portfolio with a view to assessing a sale, prior to FID.
The company intends to pause further operations, including in relation to TE-11, the third well in the current exploration programme, until after the results of the marketing process.
"We are now approaching the final stages of Sound Energy's strategy to drill a bold exploration programme in Morocco and then explore options for early monetisation,” Parsons said. “Should the board receive the right price for the company's East Morocco acreage, our intention would be to return the net proceeds of any divestment to Sound Energy shareholders in the most efficient manner possible."