Sound Energy announces eight-year Sidi Moktar petroleum agreement

2/12/2018

SEVENOAKS, UK -- Sound Energy, the Morocco focused upstream gas company, has announced the award of an eight-year petroleum agreement relating to the area currently covered by the Sidi Moktar onshore exploration permits in the Essaouira basin, central Morocco (Sidi Moktar). 

Further to the Company's announcement of Nov. 30, 2017, the Company is pleased to announce that Sound Energy has been granted, subject to Moroccan Energy and Finance Ministry approval, a petroleum agreement covering Sidi Moktar. The Petroleum Agreement, details of which are provided below, has been granted to Sound Energy by L'Office National des Hydrocarbures et des Mines (ONHYM), the Moroccan state regulator for petroleum operations, and will come into force on approval of the Moroccan Energy and Finance Ministries. 

The Sidi Moktar Petroleum Agreement covers a large area extending across and beyond the permits that were formerly known as the Sidi Moktar Nord, Sud and Ouest Permits. The new Sidi Moktar Petroleum Agreement covers some 4,499 km2 and will be named 'Sidi Moktar Onshore' (comprising sub-areas termed 'Sidi Moktar I', 'Sidi Moktar II' and 'Sidi Moktar III'). 

Upon the Sidi Moktar Petroleum Agreement becoming effective, the Company will hold an operated 75% position in Sidi Moktar Onshore. The remaining 25% will be held by ONHYM. 

The Sidi Moktar Petroleum Agreement will have a duration of eight years from award and, as with all Moroccan licences, will be divided into three phases, with each phase having pre-agreed work commitments. The work commitments under the Sidi Moktar Petroleum Agreement will be:

  • Initial period of two years and six months: acquire and process 500 km of 2D seismic, a short well test of the Koba-1 well and abandonment of Koba-1 and Kamar-1, if required. The Koba-1 well was re-entered and tested by Sound Energy in 2017. 
  • Optional First complimentary period of three years: 1 exploration well with a minimum Liassic objective and acquire and process 150 km2 of 3D seismic. 
  • Optional Second complimentary period of two years and six months: A further single exploration well with minimum Liassic objective. 

On Nov. 30, 2017 the Company announced its initial volume estimates of the exploration potential of Sidi Moktar, following an independent preliminary technical evaluation (the Sidi Moktar Study). The Sidi Moktar Study mapped a portfolio of 28 Liassic, Triassic and Paleozoic leads in a variety of hydrocarbon trap types across the Sidi Moktar exploration permit areas and highlighted an exploration potential best case of 8.9 Tcf with a high of 11.2 Tcf and a low case of 6.7 Tcf, unrisked gas originally in place (gross). In addition, Sidi Moktar contains an existing gas discovery in the Lower Liassic (Kechoula).

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