UK-based Sound Energy has started a formal farm-out campaign covering its gas-rich acreage onshore Morocco after initial marketing prompted some significant interest.
The company has a 75% stake in the Tendrara Production Concession — where a development is under way — and also in the surrounding Greater Tendrara and Anoual exploration permits where three mapped prospects could hold about 1.35 trillion cubic feet of in-place gas resource.
Sound has appointed Gneiss Energy, a corporate finance advisory firm in the energy sector, to manage the farm-out process.
The aim is to find a partner to partially fund phase two of the Tendrara gas project and also to progress an exploration and appraisal drilling programme on the surrounding acreage.
Sound is in talks with Morocco’s Attijariwafa Bank about arranging a long-term project senior debt facility of up to $250 million to help finance the $330 million Tendrara phase two project.
In addition, the company hopes to secure a farm-in partner to help raise the $60 million needed to fund its net share of the remaining capital expenditure for the development.
Sound executive chairman Graham Lyon said: “Our re-evaluation of the potential of the Greater Tendrara and Anoual exploration permits has high-graded three drilling targets, two of which have previously encountered gas shows.”
He noted that discoveries in the area have the potential to be commercialised through the planned infrastructure that will be built at Sound’s TE-5 Horst development, which aims to tap 377 billion cubic feet of gas.
Phase one of the Tendrara project is due on stream in late 2023 and aims to produce 10 million cubic feet per day of gas as part of a small liquefied natural gas scheme, with the gas sold locally.
Phase two calls for a 120-kilometre, 20-inch gas pipeline to be built linking up with the Maghreb-Europe pipeline which has significant spare capacity now Algerian gas is not flowing through it.
Production from six initial wells is forecast to be about 29 MMcfd although a central processing facility (CPF) will be designed to handle 70 MMcfd.
Front-end engineering and design work was carried out by the Enagas Consortium.
Bids are being evaluated for the engineering, procurement and construction of flowlines, the CPF, the export pipeline and a compression station.
A 10-year gas sales agreement was signed in 2021, but it is unclear when production would start.