Proactive Investors UK
Josh Allsopp
Sound Energy received a non-binding expression of interest from Oil & Gas Investment Fund.
The new Tendrara pipeline is tipped to cost about US$50mln.
Shares in Sound Energy PLC (LON:SOU) powered up after its partner on the Tendrara licence in Morocco expressed an interest in helping it build a pipeline.
The stock revved up 1.25p, or 6.2%, to 21.5p as Sound said Oil & Gas Investment Fund (OGIF) was interested in funding, building and running the link between Tendrara and the Gazoduc Maghreb Europe pipeline.
The cost of the new Tendrara pipeline is estimated at around US$50mln.
Sound Energy chief executive James Parsons said: “We are very pleased to have received this first expression of interest which potentially enables us to construct the infrastructure which would be required at Tendrara without equity dilution, whilst also further broadening our strong partnership with OGIF.”
Broker Cantor Fitzgerald said OGIF’s interest was “another encouraging development” for Sound’s acreage in Morocco.
“Whilst at this stage it is too early to determine the full commerciality of the Tendrara field, today’s development underlines OGIF’s support in promoting domestic gas production in Morocco,” Cantor said in a note.
“The company’s shares have rallied in recent weeks as the market continues to recognise the successful execution of Sound’s Mediterranean gas strategy, but we believe its current valuation remains undemanding.
“We therefore reiterate our ‘buy’ recommendation and 40p target price.”
