After a failed gas test in eastern Morocco, Sound Energy PLC considers selling acreage to recover losses.
Rabat – It has been less than a month since Sound Energy PLC first announced successful gas testing in the TE-10 well in eastern Morocco and received a gas deal proposal from the Moroccan power firm the National Office of Electricity and Drinking Water (ONEE). Judging from its latest press release, however, the future for the company may be grim after an unsuccessful gas test on May 21.
After the British company failed to achieve commercial flow rates at the TE-10 well, the price of its stock alarmingly dropped over 32 percent, raising questions as to whether it would be wise to continue the exploration of the area.
Despite the grim situation, Sound Energy maintains its belief that there may be up to 20 trillion cubic feet of gas, the company’s CEO expressing confidence in the profit potential for future exploration.
“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 CEO James Parsons.
However, the London-based company has also admitted that it is considering the sale of its East Morocco acreage and, following the TE-10 failure, announced that it would be suspending plans to drill its TE-11 well.
“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 monetization,” 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.”
For now, the company has stated that it will be making necessary changes to reduce operating expenses, staff, and staff costs.