Sound Energy, a transition energy company listed on the AIM market (AIM: SOU), has entered into a binding sale and purchase agreement (SPA) with Managem SA for the partial divestment of its Moroccan assets. The transaction involves the disposal of the entire issued share capital of Sound Energy Morocco East Limited (SEME) for a total consideration of up to $45.2 million.

Under the terms of the SPA, Sound Energy will retain significant interests in its ongoing Moroccan operations, including a 20% stake in the Tendrara Production Concession and 27.5% working interests in the Grand Tendrara and Anoual Exploration Permits. Managem SA has agreed to take on a substantial portion of the funding for future developments and explorations as stipulated in the agreement:

– $12.0 million will cover back costs for Concession Phase 1 development up to July 2024.

– Additional $1.0 million for back costs associated with Concession Phase 2 and other permits, payable upon completion.

– Up to $24.5 million in net carry will fund Sound Energy’s 20% interest in the Phase 2 development of the Concession.

– Managem will also fund $3.6 million and $2.6 million for Sound Energy’s remaining interests in the Grand Tendrara and Anoual permits, respectively, aimed at drilling exploration wells SBK-1 and M5.

This divestment marks a strategic repositioning for Sound Energy, focusing on core assets while securing funding for future growth. The SPA also includes a contingent production payment of $1.5 million, which will be payable to Sound Energy no later than one year after the first gas production from the Phase 2 development of the Concession.

The agreement remains subject to multiple conditions including approvals from ONHYM and the Moroccan Minister of Energy, antitrust clearances, foreign exchange authorizations, and other regulatory approvals. These conditions ensure compliance and secure the operational continuity of the Concession under the new ownership structure.

For the year ending December 31, 2023, SEME recorded a profit before tax of £1,301,000 with no revenues, reflecting its asset-heavy but pre-revenue stage. The company’s total assets stood at £56,976,000 as of December 31, 2023. The completion of this transaction is anticipated to strengthen Sound Energy’s financial position and accelerate its operational activities.

Graham Lyon, Executive Chairman of Sound Energy, expressed satisfaction with the agreement, stating: “We are very pleased to have entered into this binding share sale to an excellent counterparty, Managem SA. The transaction is structured to ensure a smooth transition while bringing substantial funding for Phase 2 development and past costs, alongside two new exciting exploration drills.”

  energy investment in Morocco, energy sector divestment, exploration and production, gas concession deals, Managem SA, Moroccan energy assets, Sound Energy