UK gas company Sound Energy PLC (SOU.L), opens new tab sold its subsidiary, Sound Energy Morocco East Limited, to Morocco’s largest mining company, Managem, the two companies said on Friday.
The transaction amounts to $45.2 million in total, Sound Energy said, adding the sale was key to develop production in the eastern Morocco gas field, known as Tendrara.
The field is expected to start production at 100 million cubic meters annually starting next year, Managem said in a statement.
Managem plans to further increase production there to 280 million cubic meters, when the field will be connected to an existing gas pipeline that connects Morocco to Spain, Managem added.
“The group is actively looking for other gas assets in Africa,” Managem CEO Imad Toumi was quoted in the statement as saying.
Under the deal, Sound Energy will continue to hold a 20% interest in the Tendrara Production concession, and a 27.5% working interest in each of the Grand Tendrara Exploration Concession and the Anoual exploration permit.
In addition to Morocco, Casablanca-listed Managem operates in six African countries and produces cobalt, copper, zinc, gold and silver.
Morocco imports most of its gas needs, estimated at 1 billion cubic meters (bcm) currently, enough to power two small station in its northwest and northeast.
Its gas needs are expected to grow to 8 bcm as the country seeks to reduce its carbon footprint, according to energy ministry estimates.