Sound Energy PLC Final TE-8 Results and Revised Estimates (8977F)

TIDMSOU

RNS Number : 8977F

Sound Energy PLC

23 May 2017

23 May 2017

Sound Energy plc

("Sound Energy" or the "Company")

Eastern Morocco: Final TE-8 Results and Revised Estimates

Sound Energy, the African and European focused upstream gas company, recently completed the drilling of its third well at Tendrara in Eastern Morocco, TE-8, achieving Target Depth at 3,120 metres. The Company is pleased to report the results of the well, which have now been finalised and agreed with the Company's Strategic Partner.

TE-8 was drilled some 359 metres into the Paleozoic and identified the full series of Westphalian sandstones (between 2,762 metres through to 3,120 metres), which are one of the producing horizons in neighbouring Algeria. The sandstones are confirmed to lie in a separate pressure regime to the overlying TAGI play in a large tilted fault block beneath the TE-5 horst and the Lakbir High. Gas shows were encountered over this interval and subsequent petrophysical analysis suggests that these sandstones may be permeable and likely to be producible with mechanical stimulation. Further wells targeting the Paleozoic on the Tendrara permit are being planned, but are not likely to be drilled prior to the completion of reprocessing of existing 3D seismic, which is currently underway.

TE-8 also penetrated 114 metres of TAGI I reservoir (approximately twice the thickness of the TAGI I reservoir encountered in wells on the TE-5 horst) with gas shows. The TAGI sands encountered by TE-8 are also confirmed to be at the same reservoir pressure as the previous wells on the TE-5 horst (TE-5, TE-6 and TE-7).

Sedimentologically, the TAGI at the specific TE-8 location was however found to be much finer grained than any of the previous wells and cemented with carbonate, anhydrite and halite. Following evaluation of the cores and liquid samples, the Company believes that the TAGI reservoir is in a transition zone with a Gas Water Contact circa 1,350 metres sub-sea level, inferred from TE-6 well data.

Based on these final TE-8 results, the Company has now reassessed its internal volumetric estimates within the area of the Tendrara 3D seismic, and is pleased to report an increase of the Company's internal preliminary volume estimates over the Tendrara greater TE-5 horst and Lakbir and TE-4 highs to a total of 1.03 Tcf (gross), consisting of a mid-case 0.63 Tcf of Gas Originally in Place ("GOIP") (gross) on the TE-5 horst and an additional 0.4 Tcf unrisked GOIP (gross) over the Lakbir High and the TE-4 high up-dip of the well. Prior to the drilling of TE-8 the Company had internally estimated GOIP over the TE-5 horst of between 0.3 Tcf and 0.5 Tcf (gross).

Final Investment Decision ("FID") on the initial development of the estimated 0.63 Tcf GOIP over the TE-5 horst is planned for end of 2017. A competent persons report will be conducted pre-FID.

Additional upside is possible, but will be subject to the following work programme which will aim to delineate the distribution of good quality reservoir facies, the timing of cementation versus gas charge and the interpretation of gas versus brine versus tight rock on the reprocessed 3D seismic.

As announced on 17 May 2017, the SAIPEM rig used to drill TE-8 has now arrived on site at Sidi Moktar in Western Morocco. Following completion of operations at Sidi Moktar, the rig will return to Eastern Morocco. Three further operations are under evaluation to further develop the TAGI in Eastern Morocco during Q4 2017:

-- Re-entry of TE-5 to mechanically stimulate and seek to prove additional volumes in the TAGI II reservoir;

   --     A crestal well into the TE-4 horst with the aim of proving additional volume; and 
   --     A down flank well on the TE-5 horst to target a possible deeper gas-water contact 

The Company also continues with its recently initiated Eastern Moroccan seismic programme, which is hoped will ultimately lead to the identification of significant additional volumes in areas not previously surveyed to the north-east and up-dip of the Lakbir High, and to the west on a series of structural highs, predominantly over the Tendrara Licence area.

The Company advises that the pressure recovery at the Company's second well in Eastern Morocco, TE-7, post the recent Extended Well Test continues. Final results of the pressure build up and the interference test at TE-5 and TE-6 are expected during July 2017.

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

James Parsons, the Company's Chief Executive, commented:

"I am delighted to confirm our third well in Eastern Morocco as the definitive Paleozoic play opener with thick Westphalian sands which should be producible across the region.

Despite a relatively tight TAGI reservoir, the confirmation of the Gas Water Contact at 1,350 metres has enabled the Company to double its internal TAGI estimates and materially increase first phase development volumes.

We eagerly look forward to commencing the 2D exploration seismic programme in August and continuing operations in Eastern Morocco once we have finished at Sidi Moktar.

In the meantime, we are focused entirely on the rapidly approaching results at Badile and Sidi Moktar."

For further information please contact:

 
 Vigo Communications - PR Adviser              Tel: [phone] 
  Patrick d'Ancona 
  Chris McMahon 
  Alexandra Roper 
 Sound Energy                              [e-mail] 
  James Parsons, Chief Executive Officer 
 Smith & Williamson - Nominated Adviser        Tel: [phone] 
  Azhic Basirov 
  David Jones 
  Ben Jeynes 
 RBC - Broker                                  Tel: [phone] 
  Matthew Coakes 
  Martin Copeland 
  Laura White 
 

The information contained in this announcement has been reviewed by Sound Energy's Executive Vice President, Brian Mitchener, a chartered petroleum geologist. The Company's internal estimates are made in accordance with SPE standards.

Tcf means trillion cubic feet of gas.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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May 23, 2017 02:01 ET (06:01 GMT)