27 December 2018
Sound Energy plc
("Sound Energy" or the "Company")
Eastern Morocco : TE-10 Drilling Update
Sound Energy, the Moroccan focused upstream gas company, announces the preliminary results of intermediate wireline logs at TE-10, which indicate the presence of gas bearing sands in the TAGI.
James Parsons, Chief Executive Officer of Sound Energy, commented:
"These positive initial results underscore our confidence in the exploration potential across the broader basin. We will now finalise the logging, drill to TD and then test the well to better understand the scale of the discovery and seek to confirm commercial flow rates."
The Company is part way through its three well exploration programme in the Tendrara area designed to explore three geologically-independent plays and to establish the potential of the basin. TE-10, the second well in the programme, was designed to target both a material TAGI stratigraphic trap and a smaller TAGI structural closure in the Company's Greater Tendrara permit. The well is located approximately 25 kilometres to the northeast of the recently awarded Tendrara production concession, which contains the TE-5 Horst discovery unlocked by Sound Energy in 2016-17.
The TE-10 well has, so far, been drilled to 2,098.5m total measured depth, penetrating the top of the TAGI sand sequence at a measured depth ("MD") of approximately 1,892m.
Based on cuttings and the results of preliminary wireline interpretation, there is a potential gross reservoir interval from 1,899m MD to 2,009m MD. Gas shows greater than background levels were observed from 1,908m to approximately 2,030m MD and included a range of C1 to C5 hydrocarbons. Preliminary interpretation of the intermediate wireline log data currently acquired indicates thinly bedded gas bearing intervals within the gross section, with initial estimates of net pay (based on various conservative assumptions) of up to 10.5m and an average porosity of 8% (a similar porosity to previous productive wells in the Company's existing discovery). Wireline logging is ongoing, including the planned acquisition of side wall cores and the use of a modular formation dynamics tester system (MDT) to gather samples (rock and fluid) and pressure data which will assist in potentially increasing the net pay estimate.
After completion of the intermediate logging programme, the Company plans to drill the remaining TAGI section to total depth just beneath the Hercynian Unconformity and then perform a well test, including possible mechanical stimulation. The Company will also initiate seismic analysis to establish the Company's internal estimated gas resources of the structural closure and the upside potential of the North East Lakbir stratigraphic trap.
Ground works for the drilling of TE-11, the third well in the exploration programme, are expected to commence after the TE-10 well test.
The Company remains well funded with unaudited cash balances as at 14 December 2018 of US$27 million.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information please contact:
Vigo Communications - PR Adviser
Tel: +44 (0)20 7390 0230
James Parsons, Chief Executive Officer
JJ Traynor, Chief Financial Officer
Cenkos Securities - Nominated Adviser
Tel: +44 (0)20 7397 8900
RBC Capital Markets - Joint Broker
Tel: +44 (0)20 7653 4000
Macquarie Capital (Europe) Limited - Joint Broker
Tel: +44 (0)20 3031 2000
The North East Lakbir stratigraphic trap had a pre-drill mid case potential on a gross (100%) basis of 2.7 Tcf gas originally in place ("GOIP") (4.5 Tcf GOIP upside case and a 1.5 Tcf GOIP low case) and a pre-drill Sound Energy internally estimated chance of success of 14%. The smaller TAGI structural closure had a mid case potential, on a gross (100%) basis, of 128 Bcf GOIP (210 Bcf GOIP upside case and a 75 Bcf low GOIP case) and a pre-drill Sound Energy internally estimated chance of success of 26%.
The information contained in this announcement has been reviewed by Sound Energy's Exploration Director, Brian Mitchener, a chartered petroleum geologist. The estimated volumes are made in accordance with SPE standards. Tcf means trillion standard cubic feet of gas and Bcf means billion standard cubic feet of gas.
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