Sound Oil PLC Monday said it has been granted a 30-day exclusivity period to potentially acquire a stake on the Tendrara licence onshore Morocco, and said it has made progress on drilling the second Nervesa well in Italy.
Sound Oil said it has been granted the exclusivity period from the current owner of the license, the Moroccan Oil and Gas Investment Fund, which signals the beginning of negotiations between the two companies.
If the negotiations are successful, Sound would acquire a 55% stake in the license, which it also would operate. The Moroccan Fund would retain a 20% interest whilst the National Office of Hydrocarbons and Mines of Morocco would hold a 25% stake.
Sound would initially acquire a 37.5% stake if the deal goes through, with the remaining 17.5% being awarded to Sound once it commits on the second exploration phase at the project.
Under the terms of the proposed farm in, Sound Oil would pay 100% of the cost of three wells, of which only the first well would be a firm commitment. The first well is to appraise the larger of two existing discoveries in the Tendrara licence to try to de-risk the area and to prove up sufficient reserves to define the infrastructure required to commercialize the gas.
Sound Oil’s commitment to fund the second and third wells would depend upon the results of that first well. The first well is set to cost Sound GBP6.0 million and is scheduled to be drilled in the fourth quarter of 2015.
The onshore Tendrara licence includes two stranded gas discoveries with “low risk” appraisal potential and significant “blue sky” exploration upside, Sound said, adding there could be “multiple trillion cubic feet” of gas in the license area.
Source: Alliance News