Sound Energy Partners with Calvalley Petroleum for Tendrara Exploitation in Morocco
Sound Energy PLC, a leading energy company, has recently announced a significant agreement with Calvalley Petroleum Ltd to secure funding for exploration operations in Morocco’s Tendrara exploration permit area. This partnership marks a crucial step in Sound Energy’s pursuit of developing the Tendrara gas field. Under the agreement, Calvalley Petroleum will provide substantial funding, allowing for the advancement of key projects and the potential for a fruitful collaboration in the energy sector. Let’s delve into the details and implications of this strategic partnership.
Expanding Financial Support
Sound Energy has reached a momentous milestone by securing $48 million in funding from Calvalley Petroleum. This funding will specifically support phase two of the equity-funded development costs, facilitating a partial divestment of a 40% working interest. The influx of capital will enable Sound Energy to advance its exploration activities and accelerate the overall development of the Tendrara gas field.
Moreover, Calvalley Petroleum has committed to fully fund the TE-4 Horst Well, demonstrating their confidence in Sound Energy’s capabilities and the project’s potential. This funding is capped at $7 million and emphasizes the collaborative nature of the partnership.
Positive Outlook and Joint Progress
Graham Lyon, the Executive Chairman of the Board of Sound Energy, expressed his enthusiasm regarding the partnership, highlighting the exclusivity and term sheet signed with Calvalley Petroleum. Lyon acknowledged Calvalley Petroleum’s extensive operations in the Middle East and strong backing from a prominent conglomerate. The parties involved will now focus on finalizing the transaction documentation, which will pave the way for the final investment decision and propel the project forward.
Sound Energy’s Stake and Moroccan Collaboration
Sound Energy holds a significant 75% interest in the Tendrara gas drilling permit, while Morocco’s National Bureau for Hydrocarbons and Minerals (ONHYM) holds the remaining 25% interest. This collaboration between Sound Energy and the Moroccan authorities ensures a balanced partnership, fostering mutual growth and maximizing the potential of the country’s natural resources.
Extended Negotiation Period
In March 2023, Sound Energy extended the negotiation period for financing the gas production associated with the Tendrara license. Initially, an agreement had been reached with Attijariwafa Bank, Morocco’s largest banking group, to fund phase two of the Tendrara production. This long-term project senior debt facility was expected to cover the development cost estimated at $330 million. However, the negotiation period was extended until April 2023 to ensure comprehensive and favorable financial arrangements.
Impacts and Future Prospects
The collaboration between Sound Energy and Calvalley Petroleum signifies a momentous leap forward in developing the Tendrara gas field in Morocco. With significant funding secured, Sound Energy can forge ahead with its exploration activities, enhancing the country’s energy landscape and opening up potential economic opportunities. The development of the Tendrara gas field will contribute to Morocco’s energy security and bolster its position as a key player in the region’s energy market.
The partnership between Sound Energy and Calvalley Petroleum marks a significant milestone in the exploration and exploitation of the Tendrara gas field in Morocco. With substantial funding and ongoing negotiations, Sound Energy is well-positioned to advance its exploration activities and achieve its vision of establishing a thriving energy hub. This collaboration strengthens Sound Energy’s position in the energy sector and reinforces the potential for mutually beneficial partnerships between international companies and Moroccan authorities. As the project progresses, it is expected to contribute to Morocco’s economic growth and energy self-sufficiency, further solidifying its position as a regional energy leader.