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Rabat – Sound Energy, a UK-Moroccan oil and natural gas production company, is set to buy out Schlumberger’s exploration permits in Eastern Morocco for $1 (MAD 8.87).
The joint venture is buying out its partner’s stake in the Anoual and Greater Tendrara exploration permits for the symbolic price of a US Dollar, increasing Sound Energy’s share in the area from 27.5% to 75%.
The UK-Moroccan venture will take over Schlumberger Silk Route Services Ltd. from Schlumberger Holdings II Ltd., through a profit-sharing scheme.
Through this scheme, Schlumberger Holdings will keep the rights to some of the future profits. Sound Energy will have to pay between 8% and 11% of all net profits from the purchased exploration permits starting with the first production, for up to 12 years, starting with the first production.
The deal stipulates that if Sound Energy sells off its newly acquired asset before the end of 2021, Schlumberger Holdings would be entitled to 55% of the sale, while if Sound Energy sells it before March 2023, the parent company will receive 27.5% of the earnings.
Read also: British Oil Company Loses Money as Morocco Conducts Tax Audit
“We are delighted to have increased our working interest in our principal assets in Eastern Morocco on highly attractive terms,” said Sound Energy’s executive chairman Graham Lyon, in an official statement.
“This accretive transaction will, when completed, underline Sound Energy’s position as the leading gas developer in Morocco,” Lyon noted, adding that the purchase will “position us to generate enhanced returns, cash flow and value as we move forward the phased development of the TE-5 Horst.”
Sound Energy negotiated a five-year letter of exclusivity with Italfluid Geoenergy, giving the Italian company exclusive rights to design, construct, operate, and maintain the joint-venture’s LNG plants. This also means Italfluid will be building the Anoual and Greater Tendrara LNG plant when the time comes, reports Natural Gas World.
