AIM-quoted transition energy company Sound Energy has announced a transformational exit from its long-standing Moroccan oil and gas interests, entering into a binding Sale and Purchase Agreement to sell its remaining 20 per cent stake in the Tendrara Exploitation Concession — through the disposal of its subsidiary Sound Energy Merijda Limited — to Moroccan mining group Managem SA for aggregate proceeds of $57 million. The company will simultaneously use the proceeds to retire its entire outstanding Eurobond debt of EUR 28.8 million and reposition itself as a debt-free company focused on energy transition and upstream hydrocarbon opportunities outside Morocco.
The sale marks a clean break from the Tendrara gas project in which Sound Energy had been involved for many years. Under a farm-out completed in June 2024, Managem had already acquired a 55 per cent operating interest in the concession through its wholly owned subsidiary Mana Energy Limited. Following completion of the current transaction, Managem and its affiliates will hold a 75 per cent operated interest in the Tendrara concession, with the remaining 25 per cent held by Morocco’s state hydrocarbon agency ONHYM. Sound Energy is also relinquishing its 27.5 per cent non-operated interest in the Anoual Exploration Permit and waiving any subsisting rights in the Grand Tendrara Exploration Permit — a comprehensive and final exit from its Moroccan exploration portfolio.
The Tendrara concession had been developed in two phases: a micro-LNG development targeting 54 billion cubic feet of gross gas with a 10-year take-or-pay agreement with Afriquia Gaz, and a 120-kilometre pipeline development targeting an additional 128 billion cubic feet via a gas sales agreement with ONEE. While material operational progress has been made on Phase 1 — including conversion of the ItalFluid Geoenergy construction contract to a traditional EPC arrangement — the timetable for first gas shifted from October 2025 to the third quarter of 2026, and the Final Investment Decision on the larger Phase 2 pipeline development remains subject to further joint venture evaluation.
Sound Energy Chief Executive Majid Shafiq described the transaction as a transformational milestone that crystallises significant value for shareholders, eliminates the company’s exposure to the substantial future funding requirements of the Phase 2 pipeline development, and repairs a capital structure that he said had materially constrained the company’s strategic flexibility and its ability to engage credibly with financing partners and industry counterparties. He said the proceeds from the Tendrara sale will be used to repurchase the outstanding Eurobonds ahead of their December 2027 redemption date, leaving the company with an anticipated cash balance of approximately $11 million post-completion, should the deal close on 31 July 2026 as planned. The transaction is conditional on Moroccan regulatory approvals, Foreign Exchange Office authorisation, antitrust clearances, and shareholder approval at a general meeting to be convened in the coming days. Sound Energy’s shares will technically become an AIM Rule 15 cash shell upon completion, requiring the company to complete a qualifying acquisition or seek readmission as an investing company within six months.
Source: energy-pedia.com