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Sound Energy PLC (LON:SOU) is hoping to produce its first commercial gas from the Tendrara property in Morocco in the first half of 2019, according to a corporate presentation, uploaded to the company’s website.
The document ‘road-maps’ development, starting with the horizontal well, TE-7, followed by TE-8, which will test the extent of the gas opportunity.
According to the updated literature the near-term potential of the asset could be anywhere up to 3-4 trillion cubic feet of gas.
Flow rates from Te-6, Sound’s first well on the Tendrara acreage, impressed both the management and the wider investment community.
Flow rates better than expected
Finance director Mary Hood in a recent Proactive Investors interview said: “Did the multi-TCF potential surprise us?
“No, it didn’t, but, what we were looking for was a commercial flow rate of say 3 to 3.5 million scuffs [standard cubic feet or ‘scf’] per day, and what we’ve actually got from that first well, the T6 well, is a flow rate of 17mln scuffs per day.”
She added: “It definitely surpassed our expectations.”
Tendara could be a far larger regional play as it also has a 55% interest in the neighbouring Meridja permit.
Both are within 75 miles of a gas pipeline that plugs Algeria and Morocco into the main gas grid of Spain and Portugal, the presentation pointed out.
Sound Energy has been one of the in-form stocks of 2016 and is up 400% since the start of July on the back of its success in Morocco.
Currently changing hands for 91p, brokers suggest it could break above £1 a share in the near-term.
Separately, a tweet from Sound last week provided photographic evidence that work may be about to get underway on another potentially needle-moving well, this time in Italy.
It showed ground-works are underway at Badile, within the Piedmont Lombard Basin, in the north of the country.
Badile has a bit of ‘nearology’ to it as it is next to the ENI-run Gaggiano oil field, which is host to around 400mln barrels of crude.
Italy offers a bonus
In fact ENI originally held the permit and shot some 460 line-kilometres of seismic before surrendering it 12 years ago.
Work in 2013 by the oil and gas reservoir evaluation specialist, ERC Equipoise, confirmed Badile as a potentially high-impact prospect.
It reckoned it was worth more than £400mln if hydrocarbons were uncovered in the quantities anticipated.
The figure was based on a gross prospective resource of 178bn standard cubic feet of (bscf) gas and 12mln barrels of gas condensate. That was a “mid-case” estimate. The high and the low cases were respectively 673bscf and 46bscf.
Source: Sound Energy PLC’s roadmap to production in Morocco
