Sound Energy Plc
Welcome to Sound Energy
Sound Energy is a well-funded Mediterranean upstream company, listed on AIM, with cost covering production, a cornerstone investor, a strategic partnership with Schlumberger (one of the largest companies in our sector) and an active and potentially transformational drill programme.
We are pursuing an onshore gas strategy underpinned by strong European gas fundamentals, which is proving very robust to the current oil price environment and to an increasingly carbon conscious world (where gas is, rightly, seen as a cleaner alternative to coal and oil).
The energy sector is in a period of some transition with oil prices having fallen significantly and many household-names collapsing on the back of an unsustainable debt burden and an inability to fund capital commitments. We observe a “new order” emerging, with the market increasingly rewarding companies with low debt levels, strong management, cash on the balance sheet and a bias for gas. Despite the challenging sector backdrop, Sound Energy is positioned in a sweetspot – analogous to being in the peaceful eye of a violent storm – with an opportunity to grow boldly and counter-cyclically whilst valuations are low and competition is limited.
Our current portfolio includes a well balanced portfolio of onshore gas licences across both Italy and Morocco. This portfolio is a healthy blend of high upside exploration, low risk appraisal / development assets and some solid, cost covering, production.
Our journey began back in 2011/12 with the acquisition of our onshore Italian gas portfolio. Since then we have successfully drilled and are now putting into production the Nervesa gas discovery and secured first gas at the onshore Rapagnano gas field. These two assets provide a solid base of cost covering production which underpins our story. During 2015/16 we broadened the portfolio with the acquisition of an onshore gas portfolio in Morocco, including the Tendrara and Sidi Moktar licences. These licences bring scale and diversification with Temdrara forming the backbone of our 2016 drill programme. The introduction of a cornerstone investor (Continental Investment Partners) and a strategic partner (Schlumberger, a multi billion company specialist in oil and gas) now positions us with a funded 2016 drill programme and an accelerated journey to a mid cap status without material equity dilution.
We are focusing both our financial and human resources on our game-changing assets, including Tendrara where two wells are planned for 2016 and our largest gas prospect, Badile with a gross best estimate NPV10 of Euro 486 million. It is our intention to farm out and then drill Badile in 2016 with a view to capturing the upside NPV, which exceeds US$2 billion.
The final step in the journey involves continued expansion into the greater Mediterranean area, likely focused on gas and probably achieved through acquisition. This will be combined with consolidation within Italy and Morocco, where possible. We have the skills onboard to originate and execute transformational transactions.
So in summary Sound Energy is a small team focused on “shaping moves” and working to deliver a mid cap regional gas company. The journey is now well underway…
Chief Executive Officer
Listed on AIM, ticker: SOU