Sound Energy inked a non-binding heads of agreement with a UK company to sell 51% of its Eastern Moroccan assets for $112.8 million, according to Pipeline Oil and Gas Magazine.
Under the terms of the agreement, the buyer has an expiry date of February 14, 2020, to complete due diligence on the Eastern Moroccan portfolio and to finalize a binding sale and purchase agreement.
“The proposed transaction being progressed on an exclusive basis funds development of the Tendrara project, provides early monetization of a substantial part of our established gas resources and retains upside for our shareholders through both future gas production and further exploration drilling,” Simon Davies, Sound Energy’s Chairman, said.
The total of $112.8 million comprises around $54.3 million cash payable in tranches and around $58.5 million are related to Sound Energy’s future capital expenditure requirements for its retained interest in the Tendrara production concession to achieve first natural gas production from the concession.
After completing the first natural gas production, Sound Energy anticipates retaining a 23.3% share in the Eastern Moroccan portfolio through a new joint venture (JV).
It is worth noting that Sound Energy will provide the buyer with an optional year to acquire a further 9% of the remaining assets in the Eastern Moroccan portfolio, where the same conditions of the sale of the 51% interests also apply.